Summary of Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending February 29, 2016
(Three Months Ended May 31, 2015)[Japanese GAAP]
June 30, 2015

Company name:
Stock code:
Representative:
Contact:

Adastria Co., Ltd.
Listing: TSE 1st section
2685
URL: http://www.adastria.co.jp
Michio Fukuda, Representative Director, Chairman & CEO
Masatake Hayashi, Senior Executive Officer, General Manager of Administration Division
Tel: +81-3-6895-6000
Scheduled date of filing of Quarterly Report:
July 15, 2015
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results: Yes
Holding of quarterly financial results meeting:
None
Note: The original disclosure in Japanese was released on June 30, 2015 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending February 29, 2016
(March 1, 2015 – May 31, 2015)(1) Consolidated results of operations (cumulative)(Percentages represent year-on-year changes)

Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%

Net income%

Million yen

Three months ended May 31, 2015
47,394
8.7
4,759
231.6
4,928 233.4
Three months ended May 31, 2014
43,59141.5
1,435 (52.5)
1,478 (53.4)
Note: Comprehensive income
Three months ended May 31, 2015: 4,021 million yen (up 577.9%)
Three months ended May 31, 2014:
593 million yen (down 75.2%)
Net income per share

Diluted net income per share

Yen

Yen

Three months ended May 31, 2015
Three months ended May 31, 2014
Reference: EBITDA

%

2,337
256

811.5
(86.0)

96.26
10.56
10.56
Three months ended May 31, 2015:
6,778 million yen (up 89.0%)
Three months ended May 31, 2014:
3,585 million yen

EPS before goodwill amortization

Three months ended May 31, 2015:
Three months ended May 31, 2014:

119.46 yen (up 238.8%)
35.26 yen(*) For more details regarding definition, computational method and other matters of these indices, please refer to the section“Explanation of Results of Operations” on page 2.
(2) Consolidated financial position

As of May 31, 2015
As of Feb. 28, 2015
Reference: Shareholders’ equity

Total assets

Net assets

Equity ratio

Million yen

Million yen%

85,40583,742As of May 31, 2015: 49,161 million yen

49,161
57.6
46,233
55.2
As of Feb. 28, 2015: 46,233 million yen

2. Dividends
1Q-end2Q-endDividend per share
3Q-endYear-end

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Feb. 28, 2015
30.00
Fiscal year ending Feb. 29, 2016
Fiscal year ending Feb. 29, 2016 (forecast)
30.00
Note: Revision to the most recently announced dividend forecast: None

-

45.00

75.00

-

45.00

75.00

3. Consolidated Forecast for the Fiscal Year Ending February 29, 2016 (March 1, 2015 – February 29, 2016)
Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%%(Percentages represent year-on-year changes)
Net income
Net income per share
Million yen%

First half
92,400
4.9
4,000
96.2
4,300
97.8
1,200 996.7
Full year
189,800
2.8
7,000
17.0
7,000
8.5
2,400 376.4
Note: Revision to the most recently announced consolidated forecast: Yes
Reference: EBITDA
Fiscal year ending Feb. 29, 2016 (forecast): 16,300 million yen
EPS before goodwill amortization
Fiscal year ending Feb. 29, 2016 (forecast):
189.44 yen

Yen

49.42
98.84
(up 3.6%)(up 33.7%)

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Note: For more details regarding changes in subsidiaries that do not subject to specified subsidiaries, please refer to “2.
Matters Related to Summary Information (Notes), (1) Changes in Significant Subsidiaries during the Period” on page3.

(2) Application of special accounting methods for presenting quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of May 31, 2015:

24,400,000 shares

As of Feb. 28, 2015:

24,400,000 shares

As of Feb. 28, 2015:

117,988 shares

2) Number of treasury shares at the end of the period
As of May 31, 2015:

118,368 shares

3) Average number of shares outstanding during the period (cumulative)
Three months ended May 31, 2015:

24,281,812 shares

Three months ended May 31, 2014: 24,282,187 shares

Note 1: Indication of quarterly review procedure implementation status
The current quarterly financial statements are exempted from quarterly review procedures based on the Financial
Instruments and Exchange Act. At the time of disclosure, the review procedures for these quarterly financial statements
have not been completed.
Note 2: Cautionary statement with respect to forward-looking statements
Forward-looking statements in this report are based on currently available information and certain assumptions judged to bereasonable. Actual results may differ significantly from these forecasts for a number of factors. Please refer to the section“Explanation of Consolidated Forecast and Other Forward-looking Statements” on page 3 regarding preconditions or otherrelated matters for the forecast shown above.

Reference: Summary of Non-consolidated Forecast
Non-consolidated Forecast for the Fiscal Year Ending February 29, 2016 (March 1, 2015 – February 29, 2016)
Net sales
Million yen%

Operating income

Ordinary income(Percentages represent year-on-year changes)
Net income
Net income per share

Million yen

Million yen

Million yen

%

%

%

Yen

First half
86,300
4,200
4,500
4,000
164.73Full year
177,800
7,700
7,900
6,000
247.10Note: Revision to the most recently announced non-consolidated forecast: Yes
The Company is no longer a holding company following the absorption-type merger between consolidated subsidiaries on
March 1, 2015.
Therefore no comparisons with the previous fiscal year are shown.

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance2(1) Explanation of Results of Operations

2(2) Explanation of Financial Position

3(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

3

2. Matters Related to Summary Information (Notes)

3(1) Changes in Significant Subsidiaries during the Period

3(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements

3(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements

3

3. Quarterly Consolidated Financial Statements

4(1) Quarterly Consolidated Balance Sheet

4(2) Quarterly Consolidated Statements of Income and Comprehensive Income

6(3) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders’ Equity

8

4. Supplementary Information

9(1) Number of Stores

9(2) Sales for Brands and Regions

10(3) Sales for Merchandise Categories

10

- 1 -

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of the current fiscal year (March 1, 2015 to May 31, 2015), the Japanese economy, partly
backed by the government’s economic stimulus and monetary measures, sustained its slow recovery. Corporate
earnings, along with jobs and personal income, improved and signs of a rebound in consumer spending were
seen.
Sales in the casual wear market, where Adastria Co., Ltd. (hereafter “the Company”) operates its main brands,
were generally strong because of favorable weather along with the recovery in consumer sentiment.
First quarter sales were 8.7% higher than one year earlier because of strong sales of spring and summer apparel,
benefiting from record-setting hot weather as well as our efforts to improve quality and upgrade sales activities.
Among our core brands, GLOBAL WORK and JEANASIS posted strong sales.
Regarding the store network, we opened 40 stores (including 9 overseas), and closed 21 (including 13 overseas),
resulting in a total network of 1,375 stores (including 102 overseas) at the end of the first quarter of the current
fiscal year.
As for earnings, the gross profit margin improved by 1.2 percentage point from one year earlier to 60.7%. The
impact of the depreciation of the Japanese yen was mitigated by strong sales.
Selling, general and administrative (SG&A) expenses, including expenses for TV commercials and otheradvertising activities, were largely as planned. The SG&A-to-sales ratio decreased 5.5 percentage points fromone year earlier to 50.7% and the operating margin increased 6.7 percentage points to 10.0% accordingly.
134 million yen for impairment losses on store assets was posted as an extraordinary loss.
As a result, consolidated net sales in the first quarter of the current fiscal year increased 8.7% year-on-year to47,394 million yen, operating income increased 231.6% to 4,759 million yen, ordinary income increased 233.4%
to 4,928 million yen, and net income increased 811.5% to 2,337 million yen.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 89.0% to 6,778 million yen
and earnings per share (EPS), before goodwill amortization, rose 238.8% to 119.46 yen. (*)
An absorption-type merger was conducted on March 1, 2015 between the Company (then Adastria Holdings Co.,
Ltd.) as the surviving company, and its subsidiaries POINT INC. and TRINITY ARTS INC as the absorbed
companies. The Company changed its name to Adastria Co., Ltd. effective June 1, 2015.
The original plan was for the holding-company structure to achieve integrated strengths as a corporate groupwhile respecting the corporate culture of each group company. However, we reached the conclusion that we needto respond quickly and accurately to the dynamic changes taking place in our business climate, such as Japan’s
falling and aging population, shifts in consumption patterns, and rapid progress involving information technology.
Consequently, we decided to merge the Company with these two subsidiaries to aim for more efficient operations
and faster decision making. Our goal is further growth in corporate value by strengthening corporate governanceand taking full advantage of the benefits of our new organizational structure.

(*) Amortization of goodwill that mainly resulted from the consolidation of TRINITY ARTS INC. (subsequently
absorbed by the Company) causes large declines in operating income and all subsequent categories of profits
from the fiscal year ended on February 28, 2014. Since goodwill amortization is not a cash expense, thisamortization created a large gap between changes in cash flows and changes at all levels of profits startingwith operating income. Furthermore, comparisons with foreign companies are difficult because of differencesin accounting standards of individual countries for recording goodwill amortization. As a result, we are newly
announcing EBITDA and EPS before goodwill amortization as reference financial indicators.

- 2 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

EBITDA
Operating income + Depreciation + Amortization of goodwill (SG&A expenses)
EPS before goodwill amortization(Net income + Amortization of goodwill (SG&A expenses, and extraordinary loss)+ Impairment losses (goodwill)) / Average number of shares outstanding during the period(2) Explanation of Financial Position
Total assets increased 1,663 million yen from as of February 28, 2015 to 85,405 million yen as of May 31, 2015.
This was mainly due to increases in notes and accounts receivable-trade of 4,280 million yen and investment
securities of 2,295 million yen, while there were decreases in cash and deposits of 1,150 million yen, goodwill of
563 million yen and other under investments and other assets (deferred tax assets, etc.) of 2,563 million yen.
Liabilities decreased 1,264 million yen to 36,244 million yen. This was mainly due to decrease in electronicallyrecorded obligations – operating of 1,880 million yen, other under non-current liabilities (deferred tax liabilities,etc.) of 1,772 million yen, and income taxes payable of 1,286 million yen, while there was an increase in
short-term loans payable of 3,884 million yen.
Net assets increased 2,927 million yen to 49,161 million yen.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
The Company has reviewed the current performance trends, and has revised consolidated and non-consolidated
forecasts for the first half of the fiscal year ending February 29, 2016 that were announced on April 6, 2015. For
details, please refer to the announcement regarding revision of consolidated forecast (Japanese version only)
announced on June 30, 2015.
2. Matters Related to Summary Information (Notes)(1) Changes in Significant Subsidiaries during the Period
Not applicable.
Although this is not a change in a specified subsidiary, the Company’s consolidated subsidiaries POINT INC. and
TRINITY ARTS INC. were dissolved and excluded from the scope of consolidation as an absorption-type merger
was conducted on March 1, 2015 between the Company, which is the surviving company, and POINT INC. and
TRINITY ARTS INC.
(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements
Not applicable.
(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements
Not applicable.

- 3 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Million yen)First quarter of FY2/16(As of May 31, 2015)

FY2/15(As of Feb. 28, 2015)
AssetsCurrent assets
Cash and deposits

7,677

6,526

Notes and accounts receivable-trade

7,593

11,873Inventories

14,48815,019

Other

4,777

3,727

Allowance for doubtful accounts

(48)

(133)

34,48837,013

Store interior equipment, net

8,420

8,274

Other, net

4,487

4,514

Total property, plant and equipment

12,90812,789Goodwill

7,921

7,357

Other

1,372

1,445

Total intangible assets

9,293

8,803

Investment securities

7,604

9,900

Lease and guarantee deposits

16,924

16,954

Other

2,754

191

Allowance for doubtful accounts

(232)

(247)

Total current assets
Non-current assets
Property, plant and equipment

Intangible assets

Investments and other assets

Total investments and other assets
Total non-current assets
Total assets

27,051

26,79949,253

48,391

83,74285,405

Liabilities
Current liabilities
Notes and accounts payable-trade

6,246

6,711

Electronically recorded obligations - operating

8,855

6,974

Short-term loans payable

3,753

7,637

Accounts payable-other

9,687

10,263

Income taxes payable

3,293

2,007

Provision for bonuses

2,036

1,050

358

273

Other provision
Other

1,008

831

Total current liabilities

35,24035,749Non-current liabilities
Provision
Other
Total non-current liabilities
Total liabilities

- 4 -

95

94

2,173

400

2,268

495

37,50836,244

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

(Million yen)First quarter of FY2/16(As of May 31, 2015)

FY2/15(As of Feb. 28, 2015)
Net assets
Shareholders' equity
Capital stock

2,660

2,660

Capital surplus

6,987

6,987

Retained earnings

32,65133,895

Treasury shares

(406)

(408)

Total shareholders' equity

41,892

43,135

Accumulated other comprehensive income
Valuation difference on available-for-sale securities

3,631

5,358

Deferred gains or losses on hedges

357

385

Foreign currency translation adjustment

352

281

Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

- 5 -

4,341

6,025

46,23349,161

83,74285,405

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)First three months of FY2/15(Mar. 1, 2014 – May 31, 2014)(Million yen)First three months of FY2/16(Mar. 1, 2015 – May 31, 2015)

Net sales

43,59147,394

Cost of sales

17,637

18,607Gross profit

25,95428,787

Selling, general and administrative expenses

24,51924,027

Operating income

1,435

4,759

33

44

Non-operating income
Dividend income
Foreign exchange gains

-

57

Other

63

162

Total non-operating income

96

264

Interest expenses

13

15

Loss on valuation of derivatives

32

67

Other

7

11

Total non-operating expenses

53

95

1,478

4,928

Gain on sales of investment securities

9-

Total extraordinary income

9

-

180

134

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses
Impairment loss

180

134

Income before income taxes and minority interests

Total extraordinary losses

1,306

4,794

Income taxes-current

1,572

1,879

Income taxes-deferred

(522)

577

Total income taxes

1,050

2,456

Income before minority interests

256

2,337

Net income

256

2,337

- 6 -

Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY2/15(Mar. 1, 2014 – May 31, 2014)(Million yen)First three months of FY2/16(Mar. 1, 2015 – May 31, 2015)

Income before minority interests

256

2,337

Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges

496

1,726

(77)

28

Foreign currency translation adjustment

(82)

(71)

Total other comprehensive income

336

1,683

593

4,021

593

4,021

-

-

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to minority
interests- 7 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.

- 8 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

4. Supplementary Information(1) Number of Stores
Number of stores
Store format / region

As of Feb. 28,
2015 (Note 3)

First three months of FY2/16
OpenedRebranded

Increase/decrease

ClosedAs of May 31,
2015

GLOBAL WORK

178

3

-

-

3

181

LOWRYS FARM

158

2

10

(2)

10

168

niko and...

116

3

-

-

3

119

STUDIO CLIP

162

4

-

-

4

166

LEPSIM LOWRYS FARM

125

4

-

(1)

3

128

JEANASIS

84

1

5

(1)

5

89

RAGEBLUE

64

2

7

(1)

8

72

HEATHER

75

1

-

-

1

76

Others

285

11

(22)

(3)

(14)

271

1,247

31

-

(8)

23

1,270

3

-

-

-

-

3

1,250

31

-

(8)

23

1,273

Total (Adastria)
OthersTotal (Japan)
Hong Kong

24

-

1

-

1

25

China

34

3

-

(4)

(1)

33

Taiwan

26

1

-

-

1

27

South Korea

12

5

-

-

5

17

Singapore

10

0

(1)

(9)

(10)

-

Total (Overseas)

106

9

-

(13)

(4)

102

Total (Group)

1,356

40

-

(21)

19

1,375

Notes: 1. The number of stores is categorized by using brand operating divisions and geographic regions.
2. The number of stores includes e-commerce websites of other companies and e-commerce websites of the Company.
3. On March 1, 2015, an absorption-type merger was conducted between the Company, which is the surviving
company, and its subsidiaries POINT INC. and TRINITY ARTS INC., which were dissolved. Consequently, thenumber of stores at Adastria as of February 28, 2015 is the number of stores at these two subsidiaries.

- 9 -Adastria Co., Ltd. (2685) Summary of 1Q Financial Results for February 2016 Fiscal Year

(2) Sales for Brands and Regions
Brand / region

First three months of FY2/16
Sales (million yen)
Composition (%)

YoY change (%)(Note 2)

GLOBAL WORK

8,125

17.1

15.4

LOWRYS FARM

6,112

12.9

0.3

niko and...

5,006

10.6

7.1

STUDIO CLIP

4,664

9.8

10.4

LEPSIM LOWRYS FARM

3,724

7.9

5.9

JEANASIS

2,849

6.0

18.9

RAGEBLUE

2,222

4.7

9.7

HEATHER

1,908

4.0

(1.6)

Others

9,411

19.9

4.6

44,025

92.9

7.6

176

0.4

45.5

44,201

93.3

7.7

1,872

4.0

14.7

China

493

1.0

64.4

Taiwan

406

0.8

9.4

South Korea

230

0.5

-

Singapore

189

0.4

(26.0)

Total (Adastria)
OthersTotal (Japan)
Hong Kong

Total (Overseas)

3,192

6.7

24.7

Total (Group)

47,394100.0

8.7

Notes: 1. The number of stores is categorized by using brand operating divisions and geographic regions.
2. On March 1, 2015, an absorption-type merger was conducted between the Company, which is the surviving
company, and its subsidiaries POINT INC. and TRINITY ARTS INC., which were dissolved. Consequently, YoYchange on Adastria sales is based on sales of these two subsidiaries in the same period of the previous fiscal year.

(3) Sales for Merchandise Categories
Category

First three months of FY2/16
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

6,323

13.3

4.9

Lady’s apparel (bottoms, tops)

32,066

67.7

9.6

Others

9,003

19.0

8.5

47,394

100.0

8.7

Total

Note: The others category includes additions to the provision for point card certificates and other items.

This financial report is solely a translation of the Company’s Kessan Tanshin (including attachments) in Japanese, which
has been prepared in accordance with accounting principles and practices generally accepted in Japan, for theconvenience of readers who prefer an English translation.

- 10 -