Interim report
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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 report and original Japanese Flash Report , the latter shall prevail . Flash Report on the Consolidated Results for the First Quarter Ended June 30 , 2026 [ JGAAP ] Company Name : DAIICHIKOSHO CO . , LTD . Tokyo Stock Exchange August 6 , 2026 Stock Exchange Listing : Code Number : 7458 URL : https://www.dkkaraoke.co.jp/ Representative : Contact : Phone : Tadahiro Hoshi , President Yasuhisa Nishihara , General Manager , Accounting Department + 81-3-3280-2151 Scheduled date of commencing dividend payments : - Preparation of supplementary material on financial results : Yes Holding of financial results briefing : None ( Amounts below one million yen are truncated . ) ( 1 ) Consolidated operating results 1. Consolidated Performance for the Three Months Ended June 30 , 2026 ( From April 1 , 2026 , to June 30 , 2026 ) ( Percentage figures indicate increase / decrease from a year earlier . ) Net sales Millions of yen % Operating profit Millions of yen % Ordinary profit Millions of yen % Three Months Ended June 30 , 2026 41,157 1.5 4,991 17.6 5,129 12.2 Three Months Ended June 30 , 2025 40,553 9.9 4,245 ( 8.6 ) 4,571 9.8 Profit attributable to owners of parent Millions of yen Basic earnings per share Diluted earnings per share % Yen Yen Three Months Ended June 3,137 ( 10.9 ) 30.35 30.25 30 , 2026 Three Months Ended June 3,520 3.3 33.78 33.67 30 , 2025 ( Note ) Comprehensive income : Three Months Ended June 30 , 2026 : 3,492 million yen Three Months Ended June 30 , 2025 : 3,270 million yen [ 6.8 % ] [ ( 12.4 ) % ] ( 2 ) Consolidated financial position Total assets Net assets Equity ratio Millions of yen Millions of yen As of June 30 , 2026 215,961 220,445 124,824 125,349 % 57.0 56.1 As of March 31 , 2026 ( Reference ) Shareholders ' equity : As of June 30 , 2026 : As of March 31 , 2026 : yen 123,091 million 123,640 million yen 1
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D A I I C H I K O S H O C O . , L T D . 2 2. Dividend Annual dividend First Quarter Second Quarter Third Quarter Year-end Annual Yen Yen Yen Yen Yen Y ear ended March 31, 2026 ― 28.00 ― 39.00 67.00 Y ear ending March 31, 2027 ― Y ear ending March 31, 2027 (forecast) 34.00 ― 34.00 68.00 (Note) Changes in dividends forecast from most recently announced figures: None 3. Forecast of Consolidated Performance for FY2026, the Year Ending March 31, 2027 (From April 1, 2026, to March 31, 2027) (Percentage figures indicate increase/decrease from a year earlier.) Net sales Operating profit Ordinary profit Millions of yen % Millions of yen % Millions of yen % Six months ending September 30, 2026 83,100 3.5 9,600 13.9 9,800 13.9 Year ending March 31, 2027 (full year) 169,000 3.7 19,300 7.7 19,700 7.9 Profit attributable to owners of parent Basic earnings per share Millions of yen % Yen Six months ending September 30, 2026 6,200 1.3 59.97 Year ending March 31, 2027 (full year) 12,600 (20.7) 121.88 (Note) Changes in forecast of consolidated performance from most recently announced figures: Yes For details of the changes in forecast of consolidated performance, please see the “Notice Concerning the Amendment of Forecast of Performance” released today, August 6, 2026.
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D A I I C H I K O S H O C O . , L T D . 3 *Notes (1) Significant changes in scope of consolidation during the period: None (2) Adoption of special accounting policies for quarterly financial statements: None (3) Changes in accounting policies, changes in accounting estimates and retrospective restatement 1) Changes in accounting policies due to the revision of accounting standards: None 2) Changes in accounting policies other than 1) above: None 3) Changes in accounting estimates: None 4) Retrospective restatement: None (4) Number of common shares issued * Review of the Japanese-language originals of the attached quarterly financial statements by certified public accountants or an audit firm: None * 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 Forecast of Consolidated Performance and Other Forward-looking Information” on page 7 of the Attachments. 1) Number of shares issued (including treasury shares) As of June 30, 2026 103,968,400 shares As of March 31, 2026 103,968,400 shares 2) Number of treasury shares As of June 30, 2026 591,507 shares As of March 31, 2026 591,507 shares 3) Average number of shares during the period Three months ended June 30, 2026 103,376,893 shares Three months ended June 30, 2025 104,244,797 shares
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D A I I C H I K O S H O C O . , L T D . 4 Table of Contents - Attachments 1. Overview of Operating Results, etc. .......................................................................................................... 5 (1) Overview of Operating Results for the Period under Review ............................................................... 5 (2) Overview of Financial Position for the Period under Review ............................................................... 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 Sheet .................................................................................................. 8 (2) Quarterly Consolidated Statements of Income and Comprehensive Income ...................................... 10 (Quarterly Consolidated Statement of Income) ................................................................................ 10 (Quarterly Consolidated Statement 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 (Statements of Cash Flows) .............................................................................................................. 13
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D A I I C H I K O S H O C O . , L T D . 5 1. Overview of Operating Results, etc. (1) Overview of Operating Results for the Period under Review In the three months ended June 30, 2026 (the “three months under review”), Japan’s economy was on a moderate recovery trend, against the backdrop of the improving employment and wages environment and solid capital investment. Its outlook, however, still remains unclear, as there is concern about the impact that such factors as the continued rise in commodity prices, the volatile international situation, and developments in trade policy could have on the economy. In the karaoke industry, where DAIICHIKOSHO CO., LTD. (the “Company,” together with its subsidiaries, the “Group”) operates, as demand remains solid mainly in the night b usiness and the karaoke cabin markets, the Company’s mainstay markets, competition among businesses continues to be intense in central areas of each trading area. 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 41,157 million yen (up 1.5% year on year) , a record first-quarter high, and operating profit was 4,991 million yen (up 17.6% year on year) and ordinary profit was 5,129 million yen (up 12.2% year on year). Profit attributable to owners of parent was 3,137 million yen (down 10.9% year on year), mainly due to the impact of the drop-off of gain on sale of non-current assets recorded in the corresponding period of the previous fiscal year. (Millions of yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Year-on-year change % change Net sales 40,553 41,157 604 1.5% Operating profit 4,245 4,991 745 17.6% Ordinary profit 4,571 5,129 558 12.2% Profit attributable to owners of parent 3,520 3,137 (383) (10.9)% Operating results by segment are as follows. (Commercial karaoke business) In the commercial karaoke business, the market remained solid overall, and the number of DAM units in operation increased slightly year on year. For “LIVE DAM WAO!,” the most advanced model of DAM that we launched in April 2025, we further enhanced the videos of original artists, including live and animation videos, to strengthen the product attractiveness of DAM, while we also actively advanced collaborations with TV programs and other media as well as a variety of events to stimulate demand for karaoke and promote new functions and content of the model. In the night business and the karaoke cabin markets, the Company’s mainstay markets, we worked to effectively replace previous models , mainly with LIVE DAM WAO! , to increase per-unit DAM revenue. In the seniors’ market, which includes nursing facilities, we expanded sales of FREE DAM LIFE, a model developed exclusively for the senior’s market, through door -to-door sales activities, holding online concerts, and others , while also promoting the features that lessen the burden on nursing facility staff. In addition, we worked to further spread the awareness that “Singing is good for one’s health” through joint research with universities and others. As a result, net sales decreased by 7.4% year on year because revenue from product sales, mainly in wholesale, decreased as the impact of the new product seen in the corresponding period of the previous fiscal year disappeared . In terms of profit, operating profit increased by 14.3% year on year, mainly due to increased gross profit from stock revenue, such as karaoke equipment rental fees and data provision fees, as well as a decrease in selling, general and administrative expenses including promotion expenses. (Millions of yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Year-on-year change % change Net sales 17,714 16,401 (1,312) (7.4)% Operating profit 3,259 3,726 467 14.3%
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D A I I C H I K O S H O C O . , L T D . 6 (Karaoke cabin and restaurant business) In the karaoke cabin and restaurant business, we opened three karaoke cabins and six restaurants and closed three karaoke cabins and two restaurants, and we operated 521 karaoke cabins and 171 restaurants as of the end of the three months under review. The flow of customers remained solid, and sales increased by 2% at existing karaoke cabins and by 3% at existing restaurants year on year during the three months under review. Under such circumstances, for BIG ECHO karaoke cabins, under the slogan “BIG SMILE, BIG ECHO. Let’s sing, laugh, and do more with everyone,” we worked to improve our quality in terms of karaoke equipment, acoustic facilities, and aesthetics and thereby enh ance the level of customer satisfaction as a chain directly operated by a karaoke system manufacturer. We also strived to create a variety of joy and fun through karaoke by actively pursuing collaborations with diverse artists and animation works. In addition, we implemented initiatives to strengthen the profitability of our stores by leveraging the ir location advantage, such as opening “B-GARAGE” darts bars alongside the karaoke cabins and collaborating with cloakroom service providers. For restau rants, reservations and orders remained strong, and we worked to improve the quality of the restaurants’ environment, customer service, and food. We also open ed two darts bars including “REGALO,” and “MARUNOUCHI BASE” and “SHINAGAWA PIVOT,” complex stores that offer food and amusement, contributed to earnings. As a result, net sales increased by 6.8% year on year mainly due to an increase in the number of stores resulting from the opening of new stores and M&A, as well as an increase in revenue from existing stores. Operating profit decreased by 2.5% year on year mainly due to higher expenses attributable to an increase in the number of newly opened stores and the impact of a rise in running costs, including foodstuff costs. (Millions of yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Year-on-year change % change Net sales 16,474 17,588 1,113 6.8% Operating profit 1,292 1,260 (32) (2.5)% (Music software business) In the music software business, in addition to our efforts to discover new artists and create hit songs, we strived to build a steady earnings model by concentrating our efforts on the music publishing business leveraging our own media, mainly karaoke. In the three months under review, “Honmayade*Nandeyanen*Shirankedo,” the debut single of MONAKI, the group that made their debut on a major label in April 2026 as a brother group to JUNRETSU, contributed to earnings. As a result, net sales increased by 9.8% year on year, and operating profit increased by 39.7% year on year. (Millions of yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Year-on-year change % change Net sales 1,326 1,456 130 9.8% Operating profit 89 124 35 39.7% (Other businesses) In the other businesses, progress was made in the expansion of the parking business operating “The Park” brand as its new pillar of revenue, and the business scale expanded to approximately 4,500 parking facilities and 52,000 parking spots as of the end of the three months under review. The BGM business, which operates “Stardigio Air,” and the home -use karaoke service, “Karaoke@DAM,” also performed strongly. As a result, net sales increased by 13.4% year on year owing to factors such as an increase in revenue from the parking business, and operating profit increased by 27.9% year on year. (Millions of yen) Three Months Ended June 30, 2025 Three Months Ended June 30, 2026 Year-on-year change % change Net sales 5,038 5,711 673 13.4% Operating profit 721 922 201 27.9%
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D A I I C H I K O S H O C O . , L T D . 7 (2) Overview of Financial Position for the Period under Review Total assets at the end of the three months under review decreased by 4,484 million yen from the end of the previous fiscal year to 215,961 million yen. Major changes from the previous fiscal year were, in current assets, a decrease of 7,505 million yen in cash and deposits, a decrease of 727 million yen in inventories, and an increase of 1,109 million yen in pre-paid expenses included in other. In non-current assets, karaoke equipment for rental , net increased by 528 million yen, karaoke cabin and restaurant facilities, net increased by 511 million yen, and investment securities increased by 780 million yen. Liabilities decreased by 3,960 million yen from the end of the previous fiscal year to 91,136 million yen. This was mainly due to a decrease of 2,986 million yen in income taxes payable and a decrease of 506 million yen in provision for bonuses in current liabilities. Net assets decreased by 524 million yen from the end of the previous fiscal year to 124,824 million yen. This is primarily attributable to an increase in retained earnings of 3,137 million yen due to profit attributable to owners of parent and a decrease in retained earnings of 4,031 million yen due to the dividends of surplus. (3) Explanation of Forecast of Consolidated Performance and Other Forward-looking Information For details of the forecast of performance for the six months ending September 30, 202 6 and the fiscal year ending March 31, 2027, please see the “Notice Concerning the Amendment of Forecast of Performance” released today, August 6, 2026. The forecast was prepared based on information available on the date this report was released, and actual results may vary from forecast values due to various factors in the future.
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D A I I C H I K O S H O C O . , L T D . 8 2. Quarterly Consolidated Financial Statements and Primary Notes (1) Quarterly Consolidated Balance Sheet (Millions of yen) FY2025 (As of March 31, 2026) Current First Quarter (As of June 30, 2026) Assets Current assets Cash and deposits 48,841 41,335 Notes and accounts receivable - trade 6,990 6,866 Inventories 14,023 13,296 Other 7,540 9,536 Allowance for doubtful accounts (185) (173) Total current assets 77,209 70,861 Non-current assets Property, plant and equipment Karaoke equipment for rental, net 10,386 10,915 Karaoke cabin and restaurant facilities, net 16,499 17,011 Land 53,282 53,282 Construction in progress 114 279 Other, net 18,076 18,014 Total property, plant and equipment 98,361 99,502 Intangible assets Goodwill 7,435 7,230 Other 6,137 6,106 Total intangible assets 13,572 13,336 Investments and other assets Investment securities 6,429 7,210 Leasehold and guarantee deposits 14,772 15,026 Other 10,193 10,113 Allowance for doubtful accounts (94) (89) Total investments and other assets 31,301 32,260 Total non-current assets 143,235 145,099 Total assets 220,445 215,961
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D A I I C H I K O S H O C O . , L T D . 9 (Millions of yen) FY2025 (As of March 31, 2026) Current First Quarter (As of June 30, 2026) Liabilities Current liabilities Notes and accounts payable - trade 2,375 2,689 Short-term borrowings 3,196 3,195 Income taxes payable 5,097 2,111 Provision for bonuses 1,073 566 Other 15,609 14,835 Total current liabilities 27,351 23,398 Non-current liabilities Long-term borrowings 51,682 51,533 Provision for retirement benefits for directors (and other officers) 623 598 Retirement benefit liability 9,291 9,461 Asset retirement obligations 2,078 2,039 Other 4,068 4,105 Total non-current liabilities 67,744 67,737 Total liabilities 95,096 91,136 Net assets Shareholders’ equity Share capital 12,350 12,350 Capital surplus 4,211 4,211 Retained earnings 106,897 106,003 Treasury shares (1,195) (1,195) Total shareholders’ equity 122,263 121,369 Accumulated other comprehensive income Valuation difference on available-for-sale securities 1,492 1,815 Revaluation reserve for land (158) (158) Foreign currency translation adjustment 191 210 Remeasurements of defined benefit plans (148) (144) Total accumulated other comprehensive income 1,376 1,722 Share acquisition rights 462 488 Non-controlling interests 1,246 1,244 Total net assets 125,349 124,824 Total liabilities and net assets 220,445 215,961
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D A I I C H I K O S H O C O . , L T D . 10 (2) Quarterly Consolidated Statements of Income and Comprehensive Income (Quarterly Consolidated Statement of Income) (Millions of yen) Three Months Ended June 30, 2025 (From April 1, 2025, to June 30, 2025) Three Months Ended June 30, 2026 (From April 1, 2026, to June 30, 2026) Net sales 40,553 41,157 Cost of sales 26,393 26,407 Gross profit 14,160 14,750 Selling, general and administrative expenses 9,914 9,759 Operating profit 4,245 4,991 Non-operating income Interest income 6 6 Dividend income 110 113 Insurance claim income 16 40 Cooperative monetary aid received 189 61 Other 170 178 Total non-operating income 493 400 Non-operating expenses Interest expenses 104 158 Foreign exchange losses 17 29 Cancellation penalty 15 9 Other 31 65 Total non-operating expenses 168 262 Ordinary profit 4,571 5,129 Extraordinary income Gain on sale of non-current assets 866 0 Gain on sale of investment securities 0 - Total extraordinary income 866 0 Extraordinary losses Loss on disposal of non-current assets 37 64 Impairment losses 13 5 Total extraordinary losses 50 69 Profit before income taxes 5,387 5,060 Income taxes - current 2,099 1,910 Income taxes - deferred (244) 2 Total income taxes 1,854 1,913 Profit 3,532 3,147 Profit attributable to non-controlling interests 11 9 Profit attributable to owners of parent 3,520 3,137
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D A I I C H I K O S H O C O . , L T D . 11 (Quarterly Consolidated Statement of Comprehensive Income) (Millions of yen) Three Months Ended June 30, 2025 (From April 1, 2025, to June 30, 2025) Three Months Ended June 30, 2026 (From April 1, 2026, to June 30, 2026) Profit 3,532 3,147 Other comprehensive income Valuation difference on available-for-sale securities (266) 323 Foreign currency translation adjustment 12 18 Remeasurements of defined benefit plans, net of tax (8) 3 Total other comprehensive income (262) 345 Comprehensive income 3,270 3,492 Comprehensive income attributable to Comprehensive income attributable to owners of parent 3,258 3,482 Comprehensive income attributable to non-controlling interests 11 9
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D A I I C H I K O S H O C O . , L T D . 12 (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, 2025 (From April 1, 2025, to June 30, 2025) 1. Information on the amounts of net sales and profit or loss by reportable segment (Millions of yen) Reportable segments Other (Note 1) Total Adjusted amount (Note 2) Posted amount to the consolidated quarterly statement of income Commercial karaoke Karaoke cabin and restaurant Music software Subtotal Net sales 17,714 16,474 1,326 35,515 5,038 40,553 - 40,553 Segment profit (Operating profit) 3,259 1,292 89 4,641 721 5,362 (1,116) 4,245 Notes: 1. The category “Other” comprises a business segment not attributable to reportable segments, including parking, real estate leasing and BGM broadcasting businesses. 2. The ( 1,116) million yen adjustment posted to segment profit 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. 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, 2026 (From April 1, 2026, to June 30, 2026) 1. Information on the amounts of net sales and profit or loss by reportable segment (Millions of yen) Reportable segments Other (Note 1) Total Adjusted amount (Note 2) Posted amount to the consolidated quarterly statement of income Commercial karaoke Karaoke cabin and restaurant Music software Subtotal Net sales 16,401 17,588 1,456 35,446 5,711 41,157 - 41,157 Segment profit (Operating profit) 3,726 1,260 124 5,111 922 6,033 (1,042) 4,991 Notes: 1. The category “Other” comprises a business segment not attributable to reportable segments, including parking, real estate leasing and BGM broadcasting businesses. 2. The ( 1,042) million yen adjustment posted to segment profit 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. 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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D A I I C H I K O S H O C O . , L T D . 13 (Statements of Cash Flows) The Company has not prepared quarterly consolidated statements of cash flows for the three months ended June 30, 2026. Depreciation (including amortization of intangible assets excluding goodwill), and amortization of goodwill for the three months ended June 30, 2026 are as follows. (Millions of yen) Three months ended June 30, 2025 (From April 1, 2025 to June 30, 2025) Three months ended June 30, 2026 (From April 1, 2026 to June 30, 2026) Depreciation 3,718 3,990 Amortization of goodwill 133 204