Consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (Based on J-GAAP)May 12, 2015
Company name:
Stock Code:
Representative:
Contact:

Marvelous Inc.
Listing: First Section of Tokyo Stock Exchange
7844
URL:
http://www.marv.jp/
Haruki Nakayama, Chairman, CEO
Seiichiro Kato, Director, Executive Officer, CFO, Chief Senior Director of Administration
Tel: +81-3-5769-7447
Scheduled date of Annual General Meeting of Shareholders:June 23, 2015
Scheduled Commencement Date of Dividend Payout:
June 8, 2015
Scheduled date of filing Annual Securities Report:
June 23, 2015
Explanatory Documents Supplemental to the Abridged Financial Statements: Yes
Result Briefing: Yes (For Institutional Investors and Analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (April 1, 2014 – March 31, 2015)(1) Consolidated Results of Operations (full-year)(Percentages represent year-over-year changes)
FY 2015
FY 2014Note:

Net sales
Million yen
26,441
20,330

%
30.1
15.6

Operating income
Million yen%
4,412
46.8
3,006
29.0

Comprehensive income (million yen):

FY 2015: 2,212 (16.7%)

Net income
per share

Diluted net income
per share
Yen
40.74
35.21

FY 2015
FY 2014

Ordinary income
Million yen%
4,583
50.7
3,041
30.8%
15.7(1.9)

FY 2014: 1,894 (−1.1%)

Returnon equity

Yen
40.74
—

Reference: Equity in earnings of affiliates (million yen):

Net income
Million yen
2,178
1,882

FY 2015: —Ratio of ordinary
Ratio of operating
income to total assets income to net sales
%%%
17.2
23.6
16.7
16.6
18.9
14.8
FY 2014: —On October 1, 2013, the Company executed a stock split of its common shares at the ratio of 100 shares to 1. In conjunction with this action, the Company has calculated net
income per share and diluted net income per share as if the stock split had taken place at the start of the previous fiscal year.

(2) Consolidated financial position
Total assets
Million yen
22,03916,816

FY 2015
FY 2014

Net assets
Million yen
13,45011,921

Reference: Shareholders' equity (million yen):

Equity ratio

Net assets per share%
61.0
70.9

FY 2015: 13,450

FY 2014: 11,921

Cash flows frominvesting activities
Million yen(2,218)(634)

Cash flows fromfinancing activities
Million yen(1,146)(873)

Yen
251.55223.02(3) Consolidated cash flow position

FY 2015
FY 2014

Cash flows fromoperating activities
Million yen
4,031
3,852

Cash and cash equivalents
at end of period
Million yen
8,937
8,120

2. Dividends

—
—

Yen
0.00
0.00

Yen
—
—

Yen
13.00
20.00

Yen
13.00
20.00

Dividend payout
ratio(consolidated)
Million yen%
694
36.9
1,069
49.1

—

0.00

—

30.00

30.00

39.1

1Q-endYen
FY 2014
FY 2015
FY 2016(forecasts)

Dividends per share
Interim3Q-end Year-end

AnnualTotal dividends(annual)Dividend onequity(consolidated)
%
6.1
8.4

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2016 (April 1, 2015 – March 31, 2016)(Percentages represent year-over-year changes)

Net sales

Full year
Note:

Million yen
35,000%32.4

Net income
attributable toOperating income
Ordinary income
shareholders of theparent company
Million yen% Million yen% Million yen
%
6,000
36.0
6,000
30.9
4,100
88.2

Net income
per share

The Company manages financial results based on the full fiscal year. Interim (2nd quarter) results projections are therefore omitted.

Yen76.68

*Notes(1) Changes in significant subsidiaries during the fiscal year under review(changes in subsidiaries accompanying change in the scope of consolidation): None
New:None (Company name:)
Excluded: None (Company name:)(2) Changes in accounting principles, estimates and restatement
1) Changes in accounting principles caused by revision of accounting standards: None
2) Changes in accounting principles other than those mentioned above: None
3) Changes in accounting estimates: None
4) Restatement: None(3) Number of shares issued and outstanding (shares of common stock)1) Number of shares outstanding (includingtreasury stock) at end of period
2) Number of treasury stock at end of period
3) Average number of shares outstanding
during the period

FY 2015

53,593,100 shares

FY 201453,593,100 shares

FY 2015

122,400 shares

FY 2014138,000 shares

FY 2015

53,467,751 shares

FY 201453,455,100 shares

On October 1, 2013, the Company executed a stock split of its common shares at the ratio of 100 shares to 1. In conjunction with this action,
the Company has calculated the number of shares issued and outstanding (shares of common stock) as if the stock split had taken place at thestart of the previous fiscal year.

Reference: Non-Consolidated Financial Results
Non-consolidated Financial Results for the Fiscal Year Ended March 31, 2015 (April 1, 2014 – March 31, 2015)(1) Non-consolidated results of operations (full-year)
Net sales
Operating income
Million yen% Million yen%
FY 2015
24,433
32.1
4,049
38.7
FY 2014
18,499
11.4
2,918
29.2
Net income
per shareNet income
Million yen
1,808
1,995%(9.4)
7.7

Diluted net income
per share
Yen
33.82
37.33

FY 2015
FY 2014(Percentages represent year-over-year changes)

Ordinary income
Million yen%
4,198
36.3
3,079
31.9

Yen
33.81
—On October 1, 2013, the Company executed a stock split of its common shares at the ratio of 100 shares to 1. In conjunction with this action, theCompany has calculated net income per share and diluted net income per share as if the stock split had taken place at the start of the previous fiscalyear.

(2) Non-consolidated financial position
Total assets
Million yenFY 2015
21,354
FY 2014
16,337
Reference:

Shareholders' equity (million yen):

Net assets
Million yen
13,098
11,973Equity ratio

Net assets per share%
61.3
73.3

Yen
244.97224.00FY 2015: 13,098 FY 2014: 11,973* Implementation of audit proceduresThis summary of financial statements is not subject to audit procedures pursuant to the Financial Instruments and Exchange Act (FIEA),
and at the time of disclosure of this summary of financial statements, the audit procedures of financial statements pursuant to the FIEA
were not completed.

* Cautionary statement with respect to forward-looking statements
This document contains forward-looking statements including forecasts of the Company's business performance, which are based oninformation currently available to the Company as well as on certain assumptions that the Company deems reasonable. Therefore,
results including actual business performance could differ materially from those described in these forward-looking statements as aresult of numerous factors.

Marvelous Inc. (7844) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2015
(Based on J-GAAP)

1. Analysis of Results of Operations and Financial Position(1) Analysis of results of operations(1) Operating results for the current term

In the period under review, the entertainment industry saw continued growth in the applications market driven by thewidespread adoption of smartphones, combined with increased user numbers along with a diversity of titles. Moreover,
the Japanese market, the world's largest, has been attracting much interest from foreign companies and prompted astring of market entries of foreign-made content, associated with intensifying competition. In the domestic market for
home-use games, high-performance dedicated game machines remain highly popular centered on core users. However,market scale has been losing out to the smartphone market and remains under intense pressure. In the market forarcade games, amid a diversity of games for young children, a number of strong contents offerings continued tomonopolize the market. In the audio & visual sectors, sales of package products remain under the impact of an
unfavorable environment, contrasted by steadily growing demand in the live entertainment business.

Under these circumstances, the Group has been operating as a comprehensive entertainment provider deploying a"multi-content, multi-use, and multi-device" strategy to deliver diverse entertainment content in all business segments
and on a variety of devices. In order to establish robust IPs, the Group has been driving its strategy in the three key
areas of branding, alliances, and global business, and is working to offer content that generates "buzz" among today's
users while endeavoring to enhance its services.
As a result, he Group's consolidated operating results for the current term (April 1, 2014 to March 31, 2015) came to
net sales of 26,441 million yen (up 30.1% from the previous fiscal year), operating income of 4,412 million yen (up46.8% from the previous fiscal year), and ordinary income of 4,583 million yen (up 50.7% from the previous fiscalyear). Net income for the term was 2,178 million yen (up 15.7% from the previous fiscal year).
Results by business segment are described below.

(Online Game Business)
In the online game business, existing major titles continued to perform well. Although the PC browser games
market itself has been contracting, performance has been robust centered on "Browser Sangokushi," a long-selling
hit title. Likewise, existing titles performed well also in mobile browser games, exemplified by rising sales of"Ikki-Tousen Burst Fight." In native apps, sales have continued expanding for "Logres of Swords and Sorcery:
Goddess of Ancient" released in December 2013, with significant contributions to income for the period. As newtitles of app games, we launched "NBA CLUTCH TIME" in November 2014 in Japan, and in January 2015 started
dissemination of a Chinese language version of that title in Taiwan, Hong Kong, and Macau. Subsequently inFebruary 2015 we launched "Disney Magic Castle Dream Island" under a license agreement with The Walt DisneyCompany (Japan) Ltd. Additionally, we released two new app games titles.
As a result, segment net sales totaled 15,379 million yen (up 73.2% from the previous fiscal year) with segment
operating income at 3,815 million yen (up 413.7% from the previous fiscal year).

(Consumer Game Business)
At the Company's sales sector of the Consumer Game Business segment, sales launches of "SENRAN KAGURA 2(Nintendo 3DS)" in August 2014, "Samurai Jam -Bakumatsu Rock-: Ultra Soul (PS Vita/PSP)" in September, and"KINKI NO MAGNA (Nintendo 3DS)" in October of the same year have been in an uphill struggle. Likewise,sales targets were missed for both the package version of "DEKAMORI SENRAN KAGURA (PS Vita)," whichused to be on sale as a download version only, launched in November 2014 and the new title "SENRAN KAGURAESTIVAL VERSUS (PS4/PS Vita)," which was launched in March 2015. Furthermore, regarding "KAIO", adevelopment started with a view to creating a powerful original IP of the Company, the development effort wasterminated and a development termination extraordinary loss recognized to account for the written-off work inprogress. This move was due to a drastic change in market environments and unfavorable conditions rendering theformation of the initially projected media mix initiative impracticable.
At the amusement division, a significant delay occurred in the originally projected contributions to earnings fromthe "PUZZLE & DRAGONS Z Tamer Battle" kids' amusement console launched in June 2014. As the result of acareful assessment of the recoverability of the stated asset value based on estimates of future cash flow, an asset
impairment extraordinary loss was recognized in the amount of the remaining asset balance.
As a result, segment net sales totaled 6,376 million yen (down 16.4% from the previous fiscal year), with segment
operating income of 502 million yen (down 77.9% from the previous fiscal year).

-1-Marvelous Inc. (7844) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2015
(Based on J-GAAP)(Audio & Visual Business)
The audio & visual production sector of the Audio & Visual business segment implemented the audio-visual
product commercialization of the TV animation products "Samurai Jam -Bakumatsu Rock-" and "Tokyo Ghoul,"both lead-managed by the Company. However, under the impact of a deteriorated market environment, sales ofpackage products fell short of target.
On the other hand, the stage production division reported significant growth for the standard "MUSICAL THE
PRINCE OF TENNIS" as well as for "Stage Yowamushi Pedal," which solidified its position as a major title of theCompany. Moreover, "Musical HAKUOKI" and "ULTRA MUSICAL Samurai Jam -Bakumatsu Rock-" haveremained highly popular and performances of all titles have turned out hits. In addition to ticket sales, related
goods and DVDs have been selling extremely well.
As a result, segment net sales totaled 4,699 million yen (up 22.9% from the previous fiscal year), with segment
operating income of 1,089 million yen (up 18.3% from the previous fiscal year).

(2) Outlook for the next term
In its business initiatives for the next fiscal year, the Group will focus on achieving further growth in app games,
which have been sustaining strong performance in the Online Game Business, accompanied by continuing effortsto maintain the popularity of existing titles. In the Consumer Game Business and the Audio & Visual Business,where operating environments remain adverse, the Group will use its special strength in planning abilities to best
effect with the aim of achieving sales and earnings growth compared with the fiscal year under review.
As a result of the aforementioned efforts, consolidated results for the next term are forecast to achieve net sales of
35,000 million yen, operating income of 6,000 million yen, ordinary income of 6,000 million yen, and net incomeof 4,100 million yen.

(2) Analysis of financial position
1. Assets, liabilities, and net assets
The financial position of the Group at the end of the current consolidated accounting period is as follows.
Consolidated assets at the end of the fiscal year under review totaled 22,039 million yen, which was 5,222 million
yen more than at the end of the previous fiscal year. Main factors included an increase in cash and cash equivalents,and notes and accounts receivable, in line with increased sales.
Consolidated liabilities at the end of the fiscal year under review totaled 8,588 million yen, which was 3,693
million yen more than at the end of the previous fiscal year. Main factors were decreases resulting from repaymentof short-term and long-term borrowings which were offset by higher accounts payable and income taxes payable,etc.
Consolidated net assets at the end of the fiscal year totaled 13,450 million yen, which was 1,529 million yen morethan at the end of the previous fiscal year. Main factors were dividend payments, causing a drop in retained
earnings, and other factors such as earnings recognized for the period.

2. Cash flows
Consolidated net cash and cash equivalents ("Cash") at the end of the consolidated fiscal year under review totaled
8,937 million yen, which was 816 million yen more than at the end of the previous fiscal year.
Cash flows and relevant factors in the period under review are as follows:[Cash flows from operating activities]
Net cash provided by operating activities totaled 4,031 million yen (up 4.7% from the previous fiscal year). Main
factors included a 2,773 million yen increase in trade accounts receivable, 3,701 million yen in income before
income taxes, 1,119 million yen in depreciation charges, and a 2,318 million yen increase in accounts payable.

[Cash flows from investing activities]
Net cash used in investing activities totaled 2,218 million yen (up 249.9% from the previous fiscal year). Main
factors included expenditures of 646 million yen for the acquisition of property, plant, and equipment, 1,364
million yen for acquisition of intangible non-current assets, and 1,500 million yen for time deposits together withincome of 1,800 million yen from return of time deposits.

[Cash flows from financing activities]
Net cash used in financing activities totaled 1,146 million yen (up 31.2% from the previous fiscal year). Main
factors included a 463 million yen net decrease in short-term and long-term borrowings and 694 million yen in
expenditures for dividend payments.

-2-

Marvelous Inc. (7844) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2015
(Based on J-GAAP)

Reference: Trends in cash flow indicators
FY 2011
FY 2012 FY 2013
FY 2014
FY 2015
Shareholders' equity ratio (%)
7.9
66.6
69.7
70.9
61.0
Shareholders' equity ratio based on market
47.1
63.6
203.5
267.0
407.4
prices (%)
Interest-bearing debt to cash flow ratio
155.5
99.0
30.1
16.9
5.0
(annual)Interest coverage ratio (times)
21.7
54.7
280.3
490.0
704.6
Shareholders' equity ratio: Shareholders' equity / Total assets
Shareholders' equity ratio based on market prices: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Cash flow
Interest coverage ratio: Cash flow / Interest paid
Notes: 1. Indicators are calculated using consolidated financial figures.
2. Market capitalization is calculated using the total number of issued shares minus treasury shares.
3. Cash flow refers to cash flow from operating activities.
4. Interest-bearing debt refers to all liabilities appearing on the consolidated balance sheet thatinterest is paid on. Interest payments are based on the interest payment amount of the consolidated
cash flow statement.
(3) Basic profit allocation policy, and dividends in the current and next fiscal years
The Company regards the redistribution of profits to our shareholders as one of the most importantmanagement priorities. It is our fundamental policy to provide continuing and stable distributions while
securing the internal reserves necessary for future business expansion and reinforcement of the Company's
financial position.
The Company's institution which determines the distribution of any retained earnings is stipulated inaccordance with the Articles of Association as being the Board of Directors. After comprehensively
considering expansion of the Group in the next term and after and so as to reward our shareholders for theirsupport, the Board of Directors decided that the dividend per share would be 20 yen. In addition, the annual
dividend for the next term is expected to be 30 yen per share.

-3-