BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 1st QUARTER OF THE FISCAL YEAR ENDING MARCH 2014
[Japanese Standards]

August 9, 2013
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)(URL http://www.faith.co.jp/)
Representative: Hajime Hirasawa, CEO/President
Contact: Jiro Saeki, CFO/Director Tel: +81-3-5464-7633
Date of Submission of Securities Report: August 12, 2013
Starting Date of the Dividend Payment: Preparation of Supplementary Materials for Quarterly Financial Results: Applicable
Information Meeting for Quarterly Financial Results to be Held: None
Amounts are rounded down to the nearest JPY 1 million.

1. Results for the 1st Quarter of the Fiscal Year Ending March 2014
(From April 1, 2013 to June 30, 2013)(1) Consolidated Operating Results(Percentages indicate changes compared with the 1st quarter of the previous fiscal year.)

Net Sales

Q1 of the year ending
March 2014
March 2013
Note:

Operating Profit%

Millionsof yen

1,639
1,669

179
278

△1.8
△94.0

Recurring Profit%

Millionsof yen

179
229

△35.5
△62.7

Net Profit%

Millionsof yen

△21.6
△71.0

%

Millionsof yen

181
184

△1.8
△57.8

Comprehensive income: 1st quarter of the fiscal year ending March 2014: ¥194 million (35.3%); 1st quarter of the fiscal year ending
March 2013: ¥143 million (△73.4%)

Net Profit
per Share

Q1 of the year ending
March 2014
March 2013

Diluted Net Profit
per Share

Yen
158.89160.61

Yen
158,89—(2) Consolidated Financial Position
Total Assets

Ratio of Equity Capital

Net Profit Per Share

Millions of yen

Millions of yen%

yen

22,586

20,69091.6

18,159.94

22,611

20,552

90.9

18,038.91

Q1 of the year ending
March 2014
Year ending March 2013

Net Assets

Reference: Equity Capital: 1st quarter of fiscal year ending March 2014: ¥20,690 million; fiscal year ending March 2013: ¥20,552 million

2. Dividends
Dividends per share(Record dates)

Year ending March 2013
Year ending March 2014
Year ending March 2014
(Forecast)

1st Quarter

yen
―
―

3rd Quarter

InterimYear-end

Total

yen
50.00

yen
―

yen
50.00

yen
100.00

50.00

―

5.00

―

Notes: Forecasts for dividends have not been modified since the time of the most recently announced business forecast.
At the Board of Directors meeting held on May 28, 2013, it was resolved to implement a stock split of the Company’s commonshares at a ratio of 10 shares per share with effect from October 1, 2013. The size of the dividend for the year ending March 2014
(Forecast) is being considered in view of the implementation of this stock split.

13. Forecasts for the Consolidated Business Results for the Year Ending March 2014
(from April 1, 2013 to March 31, 2014)
The figures in “%” show increased/decreased ratio compared with the previous fiscal year and the previous interim result.

Net Sales

First
half
(cumulative)
Full year

Operating Profit

Recurring Profit

Net Income

Millionsof yen%Millionsof yen%Millionsof yen%Millions of yen%

Net Income
per Share
Yen

3,100

△9.2

10

△98.2

△100

—

△150

—

△131.65

7,000

4.0

300

△70.4

250

△77.7

200

△82.0

17.55

Notes: Forecasts for dividends have not been modified since the time of the most recently announced business forecast.
At the Board of Directors meeting held on May 28, 2013, it was resolved to implement a stock split of the Company’s commonshares at a ratio of 10 shares per share with effect from October 1, 2013. The size of the net profit per share in the consolidated
business forecast (full year) is being considered in view of the implementation of this stock split.

※ Notes(1) Changes in significant subsidiaries (accompanying changes in scope of consolidation): None
Newly added subsidiaries: 0 companies (subsidiary’s name:)Removed subsidiaries: 0 companies (subsidiary’s name:)(2) Adoption of simplified accounting practices or specific procedures in preparation of the quarterly
consolidated financial reports: Applicable* For details, please refer to “2. Summary Information, (2) Adoption of Simplified Accounting Methods in the

Preparation of Quarterly Financial Statements” on page 3 of the accompanying material.

(3) Changes in accounting policy, changes in accounting estimates, and restatements(2)-1. Changes accompanying revisions of accounting standards, etc.: None(2)-2. Changes other than the above: None(2)-3. Changes in accounting estimates: None(2)-4. Restatements: None
(4) Outstanding shares (common shares)(4)-1. Outstanding shares at the end of the fiscal years (including treasury shares):
The 1st quarter of the fiscal year ending March 2014: 1,196,000 shares
The fiscal year ending March 2013: 1,196,000 shares(4)-2. Treasury shares at the end of the fiscal years:
The 1st quarter of the fiscal year ending March 2014: 56,657 shares
The fiscal year ending March 2013: 56,657 shares(4)-3. Average number of shares at the interim accounting period
The 1st quarter of the fiscal year ending March 2014: 1,139,343 shares
The 1st quarter of the fiscal year ending March 2013: 1,148,050 shares* Indication of auditing procedures implementation status
This financial results report is exempt from quarterly review procedures under Japan’s Financial Instruments and Exchange
Law. As of the time of disclosure of this report, the auditing procedure based on the Financial Instruments and Exchange Law
has not been completed.
* Statement regarding the proper use of financial forecasts and other special remarks(Notice regarding statements concerning the future)
Statements concerning the future, such as performance forecasts, etc., described in the present material are based on
information currently available to the Company and on certain assumptions judged as reasonable by the Company. The
Company’s actual performance may differ substantially from these forecasts as a result of various factors beyond theCompany’s control. For details of cautions, etc., employed in making performance forecasts and the assumptions underlying
performance forecasts, please refer to “Qualitative Information Concerning the Quarterly Performance and Financial
Position” on page 3 of the accompanying material.
(To obtain supplemental documents relating to financial results)
Supplemental documents related to the Company’s quarterly and other financial results are posted on the company website.
(URL: http://www.faith-inc.com/ir/library.html )2

Contents
1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter ·····················(1) Explanation Concerning the Operating Results ····························································(2) Explanation Concerning the Financial Position ····························································(3) Explanation Concerning Future Forecast Information on the Consolidated Financial Results, etc.

2
2
3
3

2. Summary Information ······························································································(1) Changes in Major Subsidiaries During the 1st Quarter ·····················································(2) Adoption of Simplified Methods in the Preparation of the Quarterly Financial Statements ·········(3) Changes in Accounting Principles, Procedures, and Disclosure Methods ······························

3
3
3
3

3. Consolidated Financial Statements ··············································································· 4(1) Consolidated Balance Sheet for the 1st Quarter ···························································· 4(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ········ 6Consolidated Statement of Income for the 1st Quarter ·················································· 6Consolidated Statement of Comprehensive Income for the 1st Quarter······························· 7(3) Notes Concerning the Consolidated Financial Statements ･･････････････････････････････････ 8
Note Concerning the Premise of a Going Concern ····················································· 8Note in the Case of Significant Changes in the Amount of Shareholders’ Equity ·················· 8
Segment Information ························································································ 8

1. Qualitative Information Concerning the Settlement of Accounts for the 1st Quarter(1) Explanation Concerning the Operating Results
In Japan, the number of individual mobile phone and smartphone subscriptions reached 138,490,000 at
the end June 2013 (*1) and the market is continuing to expand. In particular, the demand for smartphones
continues to increase favorably. During the 12 months from March 2012, smartphone shipments totaled
29,720,000 units (*2), accounting for over 70% of total mobile phone/smartphone shipments of
41,810,000 units (*2) over that period. In line with the spread of high-performance and highly functional
smartphones and tablet devices, the market centered on services such as social networking services(SNS), mobile social games, video-sharing sites, etc, is expanding, which is in turn fueling the demand
for the creation of new services and contents distribution to satisfy user needs.
(*1) Research by the Telecommunications Carriers Association, (*2) Research by MM Research InstituteIn this market environment, in order to be able to distribute guaranteed-quality contents, the FaithGroup is developing its Multi-Content and Multi-Platform Strategy of creating an environment thatallows people to enjoy a wide diversity of contents whenever and wherever they choose. Also, in order
to be able to bring excellent high-value-added contents to the market promptly, we are moving ahead
with the production of new contents including music and video. At the same time, we are proceedingwith the provision of highly convenient services including new services for users of smartphones, forwhich popularization is accelerating.
The Group’s net sales for the first quarter of the fiscal year ending March 2014 decreased by 1.8%
compared with the same term of the previous fiscal year to ¥1,639 million, operating profit decreased by
35.5% year on year to ¥179 million, recurring profit decreased by 21.6% year on year to ¥179 million,
and net profit decreased by 1.8% year on year to ¥181 million.
Information on each business segment is as follows.
<Content Business>
In the ringtone melody field, which is a part of the Content Business, sales are declining in line with theongoing shift from conventional mobile phones to smartphones, but we are currently implementing
measures to obtain smartphone users as customers, such as reinforcing the distribution of applications
aimed at the continually expanding mobile market. From February 2013, we unveiled the
KidzapplanetTM service worldwide as an intellectual training application brand for pre-school children.
So far the series consists of seven titles including Suku Suku Rhythmic! Sawatte Asobo! Wonder Rhythm,
Tanoshiku Ugoku! Rhythm Stamp, and Kirei-ni Seiton! Okatazuke Shiyo”. So far, aggregate sales ofthese titles have reached over 400,000 downloads, and the series has proved extremely popular overseas
with the Southeast Asian nations of Thailand, Malaysia and Singapore accounting for over half of all
downloads. Also, FaRaoTM, Japan’s first internet-based radio service equipped with a recommendation
function, which entered into service in January 2013, became standard equipped with HIKARI BOX+ in
June. Provided by NTT West Corporation, this function makes it possible for listeners to gain easy
access to a wide range of music information via a home TV set. In addition, in June 2013, in the Pic
Mix Letter service (an original video letter production service), we began newly offering a set menu of
Kitty Chan no Nuigurumi limited-edition gift card and book services.
In line with of the above developments, and mainly due to a decrease in income in the ringtone melody
business, the Content Business recorded net sales of ¥1,287 million, a decline of 6.2% year on year.
However, factoring in a decrease in the amortization of goodwill, this business recorded an operating
profit of ¥153 million, a decline of 39.6% year on year.
<Point Service Business>
In the Point Service Business, the issuing of points remained strong due to sales promotions by existing
member stores and to a rising demand for Reconstruction Assistance Housing Eco-Points, with theresult that this business recorded net sales of ¥352 million, an increase of 18.5% year on year, and an
operating profit of ¥26 million, an increase of 5.0% year on year.

2(2) Explanation Concerning the Financial Position
Total assets as of June 30, 2013 decreased by ¥24 million compared to March 31, 2013 to ¥22,586
million. This result was mainly the result of decreases in marketable securities and investment
securities.
Total liabilities decreased by ¥162 million compared to the end of the previous consolidated fiscal yearto ¥1,896 million. This result was mainly due to decreases in income taxes payable and trade notes andaccounts payable.
Total net assets increased by ¥137 million compared to the end of the previous consolidated fiscal yearto ¥20,690 million. This was mainly due to the recording of a quarterly net profit, etc., despite payment
of dividends. As a result, the equity ratio increased by 0.7 percentage points to 91.6%.

(3) Explanation Concerning Future Forecast Information on the Consolidated Financial
Results, etc.
Performance forecasts are made based on information currently available to the Company, but there is apossibility that the actual performance figures will differ significantly from the forecast figures due to avariety of factors. In addition, the current performance forecast for the full financial year is unchanged
from the forecast issued on May 14, 2013.

2. Summary Information(1) Changes in Major Subsidiaries during the 1st Quarter
Not applicable
In addition, although this does not correspond with any change of specified subsidiaries, because theFaith Group acquired a 100% shareholding in ENTERMEDIA INC., this company is included within
the Group’s scope of consolidation from the current consolidated cumulative 1st quarter.

(2) Adoption of Simplified Methods in the Preparation of the Quarterly Financial Statements
Tax expenses are calculated by making a reasonable estimate of the effective tax rate after applying tax
effect accounting to the amount of quarterly net profit before tax deduction for the consolidated
financial year including the current 1st quarter accounting period, and then multiplying the amount ofquarterly net profit before tax deduction by the current estimated effective tax rate.

(3) Changes in Accounting Principles, Procedures, and Disclosure Methods
Not applicable33. Consolidated Financial Statements(1) Consolidated Balance Sheet for the 1st Quarter
FY2012(As of March 31, 2013)(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
Corporation tax refund receivable, etc.
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets
Investment and other assets
Investment securities
OthersAllowance for doubtful receivable
Total investments and other assets
Total fixed assets
Total assets(Liabilities)
Current liabilities
Trade notes and Accounts payable
Short-term loans
Income taxes payable
Allowance for points
Allowance for bonus payments
OthersTotal current liabilities
Fixed liabilities
Long-term liabilities
Lease obligations
Deferred tax liabilities
Allowance for retirement benefits
OthersTotal fixed liabilities
Total liabilities

4(Unit: thousands of yen)
The 1st Quarter of FY2013(As of June 30, 2013)12,076,535
930,681
540,780
4,464
5,633
7,004
696,298
224,075
117,874△21,627
14,581,719

12,342,373
962,682
341,226
10,20915,0337,286
699,069
220,808
155,159△21,237
14,732,612

2,870,397

2,866,377

16,269317,804
334,074

40,312
323,578
363,890

4,761,282
63,890△225
4,824,948
8,029,420
22,611,140

4,549,288
74,517△215
4,623,590
7,853,859
22,586,471

203,006
409,884
4,453
145,492
175,091
73,914
411,137
1,422,978

171,594
409,884
5,273
23,942
176,394
54,373506,736
1,348,198

333,400
13,030156,077
127,394
5,755
635,657
2,058,636

233,404
19,613
162,805
126,1455,907
547,875
1,896,074

FY2012(As of March 31, 2013)(Net assets)
Shareholder's equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholder's equity
Other accumulated comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Total other accumulated comprehensive income
Total net assets
Total liabilities and net assets

5(Unit: thousands of yen)
The 1st Quarter of FY2013(As of June 30, 2013)

3,218,000
3,708,355
14,103,509△751,372
20,278,491

3,218,000
3,708,355
14,227,571△751,372
20,402,553

283,308△9,296
274,012
20,552,504
22,611,140

295,160△7,316
287,843
20,690,396
22,586,471

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Consolidated Statement of Income for the 1st Quarter)(Unit: thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Interest on securities
Investment gain on equity method
Miscellaneous receipts
Total non-operating profit
Non-operating expenses
Interest paid
Investment loss on equity method
Exchange losses
Miscellaneous expenses
Total non-operating expenses
Recurring profit
Extraordinary profit
Gain on disposal of investment securities
Total extraordinary profit
Extraordinary losses
Loss on disposal of fixed assets
Loss on valuation of investment securities
Total extraordinary losses
Net income before income taxes
Corporate, local, and business taxes
Net income before minority interests
Minority interests in income
Net profit for the quarter

6

The 1st Quarter of FY
2012

The 1st Quarter of FY
2013(April 1-June 30, 2012)
1,669,316
809,958
859,358
581,083
278,274(April 1-June 30, 2013)
1,639,776
898,188741,588562,081
179,506

9,820
3,767
965
—
1,348
15,902

5,957
4,407
642
1,795
1,709
14,511

2,015
56,994
5,568
103
64,681
229,494

1,815
12,024—222
14,062
179,956——

28,32028,320

3,460
2,573
—
6,034
223,460
44,048179,412△4,973
184,386

41
—
2,253
2,295
205,981
24,952
181,028—
181,028

(Consolidated Statement of Comprehensive Income for the 1st Quarter)(Unit: thousands of yen)

Net income before minority interests
Other comprehensive income
Valuation difference on other available-for-salesecurities
Share in comprehensive income of equity method
affiliates
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to shareholders of
the parent company
Comprehensive income attributable to minority
interests

7

The 1st Quarter of FY
2012

The 1st Quarter of FY
2013(April 1-June 30, 2012)
179,412(April 1-June 30, 2013)
181,028△31,028

12,032△4,394

1,798△35,422
143,989

13,831
194,859

148,963

194,859△4,973—

(3) Notes Concerning the Consolidated Financial Statements(Notes Concerning the Premise of a Going Concern)
Not applicable(Notes in the Case of Significant Changes in the Amount of Shareholders’ Equity)
Not applicable(Segment Information)
Ⅰ 1st quarter of the previous consolidated fiscal year (FY 2012, April 1, 2012 - June 30, 2012)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)

Reportable segment
Content
Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount
Total
Segment profit

Point

Total

Adjustment
amount (Note 1)

Amount recorded in
Consolidated
Financial
Statements (Note2)

1,371,654

297,661

1,669,316—

1,669,316

5,248

—

5,248

△5,248—1,376,903

297,661

1,674,565△5,248

1,669,316

253,571

24,780278,352△78

278,274

Notes: 1. Adjustment of segment profit of ¥78 thousand refers to elimination of intersegment transactions.
2. Segment profit is adjusted with the operating profit in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported
This information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.
Ⅱ 1st quarter of the current consolidated fiscal year (FY 2013, April 1, 2013 - June 30, 2013)

1. Information on sales and profit or loss by reportable segment(Unit: thousands of yen)

Reportable segment
Content
Net sales
Sales to externalcustomers
Intersegment sales
or transfer amount
Total
Segment profit

Point

Total

Adjustment
amount (Note 1)

Amount recorded in
Consolidated
Financial
Statements (Note2)

1,287,044

352,731

1,639,776—

1,639,776

3,376

50

3,427

△3,427—1,290,421

352,782

1,643,203△3,427

1,639,776

153,244

26,010179,254

252

179,506

Notes: 1. Adjustment of segment profit of ¥252 thousand refers to elimination of intersegment transactions.
2. Segment profit is adjusted with the operating profit in the quarterly consolidated profit and loss statement.

2. Information regarding impairment loss on fixed assets or goodwill by segment reported

8That information is omitted since there is no critical impairment loss on fixed assets or significant
change in amount of goodwill.

9