BRIEF STATEMENT OF CONSOLIDATED FINANCIAL RESULTS
FOR THE 3rd QUARTER OF THE FISCAL YEAR ENDING MARCH 2013
[Japanese Standards]

February 12, 2013
Company name:
Faith, Inc. (Stock code 4295, Listed on TSE 1st section)
URL:
http://www.faith-inc.com/
Representative:
Hajime Hirasawa, CEO/President
Contact:
Jiro Saeki, CFO/Director Tel: +81-03-5464-7633
Date of Submission of Securities Report: February 14, 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 ¥1 million.

1. Consolidated Results for the 3rd Quarter of the Fiscal Year Ending March 2013
（From April 1，2012 to December 31，2012）(1) Consolidated Operating Results
Percentages indicate increased/decreased ratio compared with the same quarter of the previous fiscal year

Net Sales
Millionsof yenQ3 of the year ending
March 2013
Q3 of the year ending
March 2012
Note:

Operating Profit
Millionsof yen%Recurring Profit
Millionsof yen%Net Profit
Millionsof yen

%

%

5,115

△83.8

813

△39.7

918

△35.7

808

△87.4

31,600

△48.2

1,349

△16.4

1,429

△11.2

6,435

692.2

Comprehensive income: 3rd quarter of the fiscal year ending March 2013: ¥785 million (△88.3%); 3rd quarter of the fiscal year
ending March 2012: ¥6,732 million (498.8%)

Net Profit per ShareQ3 of the year ending
March 2013
Q3 of the year ending
March 2012

Diluted Net Profit per Share

Yen

Yen

703.82—

5,605.74

5,603.07(2) Consolidated Financial Position
Ratio of Equity Capital

Net Assets per Share

Millions of yen

Millions of yen%

Yen

22,381

20,28990.6

23,518

19,618

83.3

Total Assets

Q3 of the year
ending March 2013
Year ending March
2012

Net Assets

17,670.07
17,066.74(Reference) Equity capital: 3rd quarter of the fiscal year ending March 2013: ¥20,286 million; the fiscal year ending March 2012: ¥19,593
million

2. Dividends
Dividends per Share
(Record dates)

1st Quarter

InterimYear ending March 2012

yen
―

yen
50.00

Year ending March 2013

―

50.00

Year ending March 2013
(Forecast)
Note: Revisions of recently announced dividend forecasts: none

3rd Quarteryen―

Year-end

Total

yen
50.00

yen
100.0050.00

100.003. Forecast for the Consolidated Results for the Year Ending March 2013
（from April 1，2012 to March 31，2013）(Percentages indicate changes compared with the previous fiscal year.)

Net Sales

Full year
ending March2013

Operating Profit

Recurring Profit

Net Profit

Millionsof yen%Millionsof yen%Millionsof yen%Millionsof yen

%

6,800

△79.7

900

△42.9

970

△44.8

800

△88.0

Net Profit
per ShareYen

696.83

Note: Revisions of recently announced dividend forecasts: none

※ 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(3)-1. Changes accompanying revisions of accounting standards, etc.: Applicable(3)-2. Changes other than the above: None(3)-3. Changes in accounting estimates: Applicable(3)-4. Restatements: None
* Changes are subject to Article 10, Clause 5 of “Ordinance on Terminology, Forms and Preparation Methods ofQuarterly Consolidated Financial Statements”. For details, please refer to “2. Summary Information, (3) Changes in
Accounting Policy, Changes in Accounting Estimates, and Restatements” on page 3 of the accompanying material.

(4) Outstanding shares (common shares)(4)-1. Outstanding shares at the end of the fiscal years (including treasury shares):
The 3rd quarter of the fiscal year ending March 2013: 1,196,000 shares
The fiscal year ending March 2012: 1,196,000 shares(4)-2. Treasury shares at the end of the fiscal year:
The 3rd quarter of the fiscal year ending March 2013: 47,950 shares
The fiscal year ending March 2012: 47,950 shares(4)- 3. Average number of shares at the interim accounting period
The 3rd quarter of the fiscal year ending March 2013: 1,148,050 shares
The 3rd quarter of the fiscal year ending March 2012: 1,148,050 shares* Indication of quarterly review 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. Suchstatements do not represent promises by the Company with respect to their attainment. The Company’s actual performance
may differ substantially from these forecasts as a result of various factors beyond the Company’s control. For details of
cautions, etc., employed in making performance forecasts and the assumptions underlying performance forecasts, please referto page 3 of the accompanying material, “Qualitative Information Regarding Forecast of Consolidated Financial Results”.
(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 )Contents
1. Qualitative Information Regarding Quarterly Performance and Financial Position ···························· 2(1) Qualitative Information Regarding the Consolidated Operating Results ······································ 2(2) Qualitative Information Regarding the Consolidated Financial Position ····································· 3(3) Qualitative Information Regarding the Forecast of Consolidated Financial Results ····················· 3
2. Summary Information ······················································································································ 3(1) Changes in Major Subsidiaries During the 3rd Quarter ································································ 3(2) Adoption of Simplified Methods in the Preparation of the Quarterly Financial Reports ·············· 3(3) Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements ················ 3
3. Consolidated Financial Statements for the 3rd Quarter······································································ 4(1) Consolidated Balance Sheet for the 3rd Quarter··········································································· 4(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income·········· 6(Statement of Income for the Consolidated Cumulative 3rd Quarter) ··········································· 6(Statement of Comprehensive Income for the Consolidated Cumulative 3rd Quarter)··················· 7(3) Explanatory Note Regarding Premise of a Going Concern ························································· 8(4) Note for Significant Changes in Amount of Shareholders’ Equity ··············································· 8(5) Segment Information ················································································································· 8(6) Significant Subsequent Event ·································································································· 9

11. Qualitative Information Regarding Quarterly Performance and Financial Position(1) Qualitative Information Regarding the Consolidated Operating Results
The mobile phone and smartphone market in Japan has now reached maturity with the number of individual
subscriptions exceeding 128,300,000 (*1) as of the end of November 2012. Moreover, the shipment volume oftablet devices up to the end of September 2012 totaled over 1,930,000 units, an increase of 82.1% compared withthe same period of the previous year (*2). The growth of the smartphone and tablet device markets is expected tocontinue in future, with forecasts of 91,000,000 smartphone subscriptions and 32,000,000 tablet devices inoperation by the end of 2017. (*3) In the background of the ongoing popularization of smartphones and tablet
devices is the diversification and complexity of social networking services (SNS), mobile social games,
video-sharing sites, etc, and the demand for the creation of new services and contents distribution systems to meetuser needs.
(*1) Research by the Telecommunications Carriers Association,(*2) Research by MM Research Institute, Ltd., (*3) Research by Impress R&D

In this environment, based on 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, the Faith Group has beenpouring its energies into consolidating high quality contents and creating new distribution systems for delivering
them to users.
Following the disposal of its consolidated subsidiary WebMoney Corporation in July 2011, the Faith Group’s net
sales for end of the 3rd quarter of the fiscal year ending March 2013 decreased by 83.8% compared with the same
period of the previous fiscal year to ¥5,115 million, operating profit decreased by 39.7% year on year to ¥813
million, recurring profit decreased by 35.7% year on year to ¥918 million, and the Group recorded a net profit of¥808 million, an decrease of 87.4% year on year.
Information on each business segment is as follows. In addition, from the current first quarter consolidated
accounting period, changes have been made to the composition of the reported segments. Accordingly, regarding
year-on-year comparisons, figures for the same period of the previous fiscal year have been changed to reflect the
new reported segments and allow comparisons with figures for the present fiscal year.
<Content Business>
During the period under review, the Faith Group continued its efforts to establish a new framework for content
distribution and expand and strengthen its new business operations base.
Concerning the Content Business, sales of ringtone melodies are declining in line with the shift of mobile users tosmartphones, but we have been improving the profitability of this business through cost cutting. Undercircumstances in which the diversification and segmentation of information communication media and user needs
have been accelerating through the continuing appearance of new services utilizing mobile terminal devices, theFaith Group is attempting to “create new content distribution” and “build a new business base”. In November
2012, the Group’s PicMix Letter service, which can be used to create original video letters, began to employ
Kumamoto’s popular local mascot character Kumamon for congratulatory letters, following the earlier use of theHello Kitty character. Moreover, the companies of the Faith Group are actively cooperating with other companies
in the entertainment-related business field. For example, we have taken a financial stake in LYNC
ENTERTAINMENTS, which is engaged in the discovery, nurturing and management of voice actors, actors andartists, and we have entered into a partnership with CreoFUGA Inc., which operates the world’s largest music
contest community website.
In line with of the above developments and due to a decrease in income in the ringtone melody business, theGroup recorded net sales in the Content Business for the 3rd quarter of the fiscal year ending March 2013 of¥4,056 million, a decrease of 15.9% compared with the same period of the previous fiscal year, and an operating
profit of ¥687 million, a decrease of 13.1% year on year.
<Point Service Business>
In the Point Service Business, although the supply of goods associated with the approaching deadline forapplications for exchanges of home appliance eco-points continued to decline, sales of point-card systems
remained strong, with the result that this business recorded net sales of ¥1,058 million, an increase of 0.0% year
on year, and an operating profit of ¥125 million, an increase of 0.4% year on year.

2(2) Qualitative Information Regarding the Consolidated Financial Position
Total assets as of the end of the 3rd quarter of the fiscal year ending March 2013 decreased by ¥1,137 million
compared to the end of the previous consolidated fiscal year to ¥22,318 million. This result was due mainly todecreases in cash and deposits.
Total liabilities decreased by ¥1,808 million compared to the end of the previous consolidated fiscal year to¥2,091 million. This result was due mainly to decreases in income taxes payable following the payment of income
taxes and to the repayment of long-term debt.
Total net assets increased by ¥670 million compared to the end of the previous consolidated fiscal year to ¥20,289
million. This result was due mainly to the recording of a net profit for the 3rd quarter under review despite thepayment of a dividend. In line with this result, the equity capital ratio increased by 7.3 percentage points to 90.6%.

(3) Qualitative Information Regarding the Forecast of Consolidated Financial Results
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 a variety offactors. In addition, the current performance forecast for the full financial year is unchanged from the revised
forecast issued on February 8, 2013.

2. Summary Information(1) Changes in Major Subsidiaries During the 3rd Quarter
None(2) Adoption of Simplified Methods in the Preparation of Quarterly Financial Statements
Tax expenses are calculated by making a reasonable estimate of the effective tax rate after applying tax effectaccounting to the amount of quarterly net profit before tax deduction for the consolidated financial year including
the 3rd quarter under review, and then multiplying the amount of quarterly net profit before tax deduction by thecurrent estimated effective tax rate.

(3) Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements(Changes in Accounting Policy that are Difficult to Distinguish from Changes in Accounting Estimates)
In accordance with the revision of the Corporation Tax Act, from the current fiscal year’s 1st quarter consolidated
accounting period the Company and its consolidated subsidiaries have changed the method of depreciation basedon the revised law and applied the new method to tangible fixed assets obtained on or after April 1, 2012.
The effects of this change on the Company’s operating profit, recurring profit and net profit before taxes and otheradjustment for the current 3rd quarter consolidated accounting period are minimal.

33. Consolidated Financial Statements for the 3rd Quarter(1) Consolidated Balance Sheet for the 3rd QuarterEnd of FY2011(As of March 31, 2012)(Assets)
Current assets
Cash and deposits
Accounts and notes receivable
Marketable securities
Commercial products
Products in progress
Primary materials and inventory goods
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
Deferred tax liabilities
Allowance for retirement benefits
OthersTotal fixed liabilities
Total liabilities

4(Unit: thousands of yen)
3rd Quarter of FY2012(As of December 31, 2012)

13,712,005
1,106,836
239,790
2,580
8,199
7,817
28,269260,218△29,816
15,335,901

12,129,389
1,038,706
539,502
6,079
4,385
6,371
28,269760,198△26,432
14,486,471

3,007,786

2,902,365

40,599382,135
422,734

22,351
398,301
420,653

4,644,916
121,294△13,734
4,752,477
8,182,998
23,518,900

4,500,415
72,202△538
4,572,079
7,895,098
22,381,570

187,933
399,984
1,424,393
208,142
73,566614,625
2,908,644

173,078
399,984
77,668
184,900
78,337477,450
1,391,419

733,384
125,729
109,389
22,846
991,350
3,899,995

433,396
123,974
123,237
19,911
700,519
2,091,938

End of FY2011(As of March 31, 2012)(Net assets)
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

5(Unit: thousands of yen)
3rd Quarter of FY2012(As of December 31, 2012)

3,218,000
3,708,355
13,106,638△651,377
19,381,616

3,218,000
3,708,355
13,799,854△651,377
20,074,832

227,124△15,270
211,853
25,435
19,618,905
23,518,900

223,997△12,706
211,290
3,508
20,289,631
22,381,570

(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income(Statement of Income for the Consolidated Cumulative 3rd Quarter)

3rd Quarter of FY 2011

(Unit: thousands of yen)
3rd Quarter of FY 2012

(April 1-Dec. 31, 2011)(April 1-Dec. 31, 2012)

Net sales

31,600,210

5,115,433

Cost of sales

26,448,442

2,551,719

Gross profit

5,151,767

2,563,713

Selling, general and administrative expenses

3,802,482

1,749,976

Operating profit

1,349,285

813,737

Interest income

16,91823,507

Dividend income

5,560

6,395

Interest securities

12,2362,575

Non-operating profit

Exchange gain

-

7,306

Equity method investment gain

63,60571,283

Miscellaneous receipts

5,601

3,870

Total non-operating profit

103,923

114,939

12,439

5,588

-

4,165

Exchange loss

10,208-

Miscellaneous expense

1,472

103

Total non-operating expenses

24,1199,857

1,429,088

918,819-316

28,79551,4006,899,538-

Non-operating expenses
Interest expense
Loss on investment partnership

Recurring profit
Extraordinary profit
Gain on sale of fixed assets
Gain on sale of investment securities
Gain on sale of shares of affiliated company
OthersTotal extraordinary profit

76,665-

7,004,999

51,716

14,734

9,140

-

2,573

Extraordinary loss
Loss on disposal of fixed assets
Loss on investment securities valuation
Loss on sale of shares of affiliated company

79,565--

11,892

94,29923,606

Quarterly net profit before income taxes

8,339,788

946,928

Corporate, local, and business taxes

1,762,736

160,834

Income before minority interests

6,577,051

786,093

141,379△21,927

6,435,672

808,021

Overseas taxation-related losses
Total extraordinary loss

Income or loss on minority shareholders (△)
Quarterly net profit

6

(Statement of Comprehensive Income for the Consolidated Cumulative 3rd Quarter)(Unit: thousands of yen)
3rd Quarter of FY 2011

3rd Quarter of FY 2012

(April 1-Dec. 31, 2011)(April 1-Dec. 31, 2012)

Income before minority interests

6,577,051

786,093△24,197△3,406179,237

2,844

155,040△562

6,732,092

785,5316,590,712

807,458

141,379△21,927

Other comprehensive income
Valuation difference on available-for-salesecurities
Share of other comprehensive income ofassociates accounted for using the equity method
Total other comprehensive income
Total comprehensive income
Total comprehensive income attributable toEquity shareholders of the parent company
Minority interests7(3) Explanatory Note Regarding Premise of a Going Concern
Not applicable(4) Note for Significant Changes in Amount of Shareholders’ Equity
Not applicable(5) Segment Information
I. Previous 3rd Quarter Accumulated Period (April 1, 2011 through December 31, 2011)
1. Information Concerning Sales and Profit/Loss by Reportable Segment(Unit: thousands of yen)

Net sales
Sales to outside customers
Intersegment
transfers

sales

and

Total
Segment profit
Notes:

Adjustment(Note 1)

Consolidated
statement
amount(Note 2)

31,600,210—

31,600,210—

58,019△58,019—

25,717,625

1,058,282

31,658,229△58,019

31,600,210

430,774

125,349

1,346,887

2,398

1,349,285

Electronic
Money
Business

Point
ServiceBusiness

Total

4,824,701

25,717,225

1,058,282

57,619400

4,882,321
790,763

Content
Business

1. The segment profit adjustment of ¥2,398 thousand refers to the elimination of intersegment transactions.
2. Segment profit is adjusted with the operating profit in the quarterly consolidated profit and loss statement.

2. Information Concerning Assets by Reportable Segment
Since the sale in July 2011 of the Company’s entire shareholding in WebMoney Corporation, which isengaged in the electronic money business, the company in question is no longer a consolidated subsidiaryof the Faith Group.
As a result of this, in comparison with the end of the previous consolidated fiscal year, there has been a
reduction in the amount of assets recorded in the reportable segments for the current consolidated 3rdquarter period for “the Electronic Money Business” of ¥18,161,901.

3. Information Concerning Impairment Loss on Fixed Assets or Goodwill by Reportable Segment
This information is omitted since there is no critical impairment loss on fixed assets or significant change in
the amount of goodwill.

8II. Current 3rd Quarter Accumulated Period (April 1, 2012 through December 31, 2012)
1. Information Concerning Sales and Profit/Loss by Reportable Segment(Unit: thousands of yen)Content
Business
Net sales
Sales to outside customers
Intersegment
transfers

sales

and

Total
Segment profit
Notes:

Point Service
Business

Total

Adjustment(Note 1)

Consolidated
statement amount(Note 2)

4,056,775

1,058,658

5,115,433—

5,115,433

12,409—12,409△12,409—

4,069,185

1,058,658

5,127,843△12,409

5,115,433

687,562

125,869

813,431306

813,737

1. The segment profit adjustment of ¥306 thousand refers to the elimination of intersegment transactions.
2. Segment profit is adjusted with the operating profit in the quarterly consolidated profit and loss statement.

2. Information Concerning Changes in Reportable Segment

From the current 1st quarter consolidated accounting period, the reportable segments have been changed
from the previous two segments of the “Content Business “and “Electronic Money Business” to the twosegments of the “Content Business” and the “Point Service Business”. This change was made because theCompany’s involvement in the Electronic Money Business ceased following the sale of the Company’s
shareholding in its consolidated subsidiary WebMoney Corporation on July 19, 2011, and also in view ofthe growing importance of the Point Service Business, which was previously included in the “Others”
segment.
In addition, segment information relating to the previous year’s 3rd quarter consolidated accounting period
has been produced based on the reportable segments for the current year’s 3rd quarter consolidated
accounting period.

3. Information Regarding Impairment Losses on Fixed Assets or Goodwill by Reportable Segment

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

(6) Significant Subsequent Event
Acquisition of All Shares in Entermedia Inc.
After making the decision to purchase a 100% equity stake in Entermedia Inc., Faith Inc. included a sharetransfer agreement with Entermedia’s parent company J-Stream Inc. On February 12, 2013.

(1) Purpose of equity stake acquisition
Entermedia Inc. is engaged in the production and operation of official fan club websites for a large
number of major artists and in the e-commerce business, which includes the selling of these artists’goods, CDs, DVDs etc. Working in partnership with the artists and agencies who are its clients,
Entermedia has built up the fan club business to the point where it has attracted a total of approximately
9190,000 members, and this company is anticipated to continue exhibiting strong growth. As a memberof the Faith Group, Entermedia will work together with Faith including on the development of new
customer layers, and this cooperation is expected to generate wide-ranging business synergies for bothcompanies.

(2) Outline of acquired company
Name:

Entermedia Inc.

Business contents: Fan club website operation for mobile phone users and product sales
Capital:¥1 million(3) Date of share acquisition: April 1, 2013
(4) No. of shares acquired, cost of acquisition and ownership ratio after acquisition:
No. of acquired shares: 21,650; cost of acquisition: ¥45 million; ownership
ratio after acquisition: 100%(5) Acquired voting rights ratio: 100%(6) Method of procuring funds for payment: Lump sum payment from own funds

10