Summary of Consolidated Financial Results for the Fiscal Year Ended February 28, 2015

[Japanese GAAP]
April 6, 2015

Listing: TSE 1st section
Company name: Adastria Holdings Co., Ltd.
Stock code:
2685
URL: http://www.adastria.co.jp
Representative: Yoichi Endo, Representative Director, President
Contact:
Masatake Hayashi, General Manager of Administration Division Tel: +81-3-6895-6000
Scheduled date of Annual General Meeting of Shareholders:
May 28, 2015
Scheduled date of payment of dividend:
May 13, 2015
Scheduled date of filing of Annual Securities Report:
May 29, 2015
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:Yes (for investors)
Note: The original disclosure in Japanese was released on April 6, 2015 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Fiscal Year Ended February 28, 2015 (March 1, 2014 – February 28, 2015)(1) Consolidated results of operations
Net sales
Million yen

Fiscal year ended Feb. 28, 2015
Fiscal year ended Feb. 28, 2014
Note: Comprehensive income(Percentages shown for net sales and incomes represent year-on-year changes)
Operating income
Ordinary income
Net income%

Million yen%

Million yen%

Million yen

184,588
20.4
5,981
3.8
6,452
7.0
153,27326.0
5,762 (40.7)
6,027 (39.4)
Fiscal year ended Feb. 28, 2015:
2,787 million yen (- %)Fiscal year ended Feb. 28, 2014:(3,455) million yen (- %)Net income per
Diluted net
share
income per share
Yen

%

503
(4,731)-

ROE

Ratio of ordinary
income to total assets

Ratio of operating
income to net sales

%

%

%

Yen

Fiscal year ended Feb. 28, 2015
Fiscal year ended Feb. 28, 2014
Reference: Equity in earnings of affiliates
EBITDA

20.75
20.75
1.1
7.9
3.2
(206.42)(11.3)
8.5
3.8
Fiscal year ended Feb. 28, 2015:
Fiscal year ended Feb. 28, 2014:
Fiscal year ended Feb. 28, 2015:
15,732 million yen (up 13.5%)
Fiscal year ended Feb. 28, 2014:
13,861 million yen (down 4.3%)
EPS before goodwill amortization
Fiscal year ended Feb. 28, 2015:141.71 yen (down 9.6%)
Fiscal year ended Feb. 28, 2014:156.84 yen (down 35.8%)(*) For more details regarding definition, computational method and other matters of these indices, please refer to thesection “Analysis of Results of Operations” on page 2.
(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Net assets per share
Million yen

As of Feb. 28, 2015
As of Feb. 28, 2014
Reference: Shareholders’ equity

Million yen%

Yen

83,742
46,23355.2
1,904.03
78,84144,78656.8
1,844.17
As of Feb. 28, 2015:
46,233 million yen As of Feb. 28, 2014:
44,780 million yen(3) Consolidated cash flow position
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at end of the period

Million yen

Million yen

Million yen

Million yen

Fiscal year ended Feb. 28, 2015
Fiscal year ended Feb. 28, 201412,112
4,606(10,421)(6,831)(2,524)(9,503)

7,667
8,529

2. Dividends
Dividend per share
Total

Total
dividends

Yen

Yen

Million yen

25.00
45.00
45.00

75.00
75.00
75.00

1,697
1,821

1Q-end 2Q-end 3Q-end Year-end
Yen

Fiscal year ended Feb. 28, 2014
Fiscal year ended Feb. 28, 2015
Fiscal year ending Feb. 28, 2016 (forecast)

Yen

-

50.00
30.00
30.00

Yen

-

Dividend
Dividend on
payout ratio
equity(consolidated) (consolidated)
%

%

361.5
75.9

4.1
4.0

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%

Yen

First half
90,700
3.0
2,500
22.6
2,500
15.0
600 448.4
24.71
Full year
189,800
2.8
7,000
17.0
7,000
8.5
2,400 376.4
98.84
Reference: EBITDA
Fiscal year ending Feb. 29, 2016 (forecast): 16,300 million yen (up 3.6%)
EPS before goodwill amortization
Fiscal year ending Feb. 29, 2016 (forecast):
189.44 yen (up 33.7%)

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) 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

(3) Number of outstanding shares (common stock)1) Number of shares outstanding at end of period (including treasury shares)
As of Feb. 28, 2015:

24,400,000 shares

As of Feb. 28, 2014:

24,400,000 shares

As of Feb. 28, 2014:

117,588 shares

2) Number of treasury shares at end of period
As of Feb. 28, 2015:

117,988 shares

3) Average number of shares outstanding during the period
Fiscal year ended Feb. 28, 2015:

24,282,078 sharesFiscal year ended Feb. 28, 2014:

22,922,788 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2015
(March 1, 2014 – February 28, 2015)(1) Non-consolidated results of operations
Net sales
Million yen

Fiscal year ended Feb. 28, 2015
Fiscal year ended Feb. 28, 2014

%

3,811
57,727(93.4)(49.8)

Operating income(Percentages represent year-on-year changes)
Ordinary income
Net income

Million yen

Million yen

%

923
5,246

(82.4)(43.3)

1,308
5,473

Net income per share

Diluted net income per share

Yen

Yen

Fiscal year ended Feb. 28, 2015
Fiscal year ended Feb. 28, 2014

(32.02)(148.77)%

Million yen(76.1)(43.2)%(777)(3,410)--(2) Non-consolidated financial position

As of Feb. 28, 2015
As of Feb. 28, 2014
Reference: Shareholders’ equity

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen%

Yen

46,712
44,314
48,59644,511
As of Feb. 28, 2015: 44,314 million yen

94.9
91.6
As of Feb. 28, 2014:

1,824.99
1,832.86
44,506 million yen

Note: The Company shifted to a holding company structure through a company split on September 1, 2013.

2. 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

Million yen

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

Yen

First half
85,300
2,900
3,000
3,800
156.49Full year
177,800
7,700
7,900
6,000
247.10Note: The Company conducted an absorption-type merger between consolidated subsidiaries on March 1, 2015.
Please refer to the section “Subsequent Events” on page 24 for further information.
No comparisons with the previous fiscal year are shown because the Company is no longer a holding company following thismerger.
Note 1: Indication of audit procedure implementation status
The current financial report is exempted from audit procedures based on the Financial Instruments and Exchange Act. At the timeof disclosure, the audit procedures for the 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. These statements are not promises by the Company regarding future performance. Actual results may differ
significantly from these forecasts for a number of factors. Please refer to the section “Analysis of Results of Operations” onpage 2 regarding preconditions or other related matters for the forecast shown above.

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

Contents of Attachments
1. Analysis of Results of Operations and Financial Condition

2(1) Analysis of Results of Operations

2(2) Analysis of Financial Condition

6(3) Basic Policy on Profit Distribution, and Dividend Plans for the Current and Next Fiscal Years7

2. Corporate Group7

3. Management Policies(1) Basic Management Policy

10(2) Performance Targets

10(3) Medium- to Long-term Business Strategy

10(4) Challenges

12

4. Consolidated Financial Statements

13(1) Consolidated Balance Sheet

13(2) Consolidated Statements of Income and Comprehensive Income15(3) Consolidated Statement of Changes in Equity

18(4) Consolidated Statement of Cash Flows

20(5) Notes to Consolidated Financial Statements

21

Going Concern Assumption

21

Segment and Other Information

21

Per Share Information

23

Subsequent Events24

5. Other Information

25(1) Changes in Directors- 1 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

1. Analysis of Results of Operations and Financial Condition(1) Analysis of Results of Operations
1) Results of operations for the current fiscal year
In the current fiscal year (March 1, 2014 to February 28, 2015), the Japanese economy continued to recover at amoderate pace as corporate earnings and the number of jobs improved backed by the Japanese government’s
economic measures. However, prolonged negative consumer sentiment caused by the April 2014 consumption tax
hike is pushing back a rebound in consumer spending.
Core brands of Adastria Holdings Co., Ltd. (hereafter “the Company”) and the Company’s Group (hereafter “theGroup”) are in the casual wear category. In this market sector, consumers in Japan have been seeking lower priced
items following the consumption tax hike. In addition, consumers are looking at products much more carefully
before making purchases. This shift in consumer behavior has caused sales to decline across the entire casual wear
category.
Consolidated sales increased sharply by 20.4% year-on-year, benefiting from the consolidation of TRINITY ARTS
INC. in September 2013. Sales of the GLOBAL WORK, niko and... and STUDIO CLIP brands all posted strong
sales.
Regarding store network, we reorganized our store network by aggressively implementing a scrap-and build strategy
during the fiscal year. We opened 224 new stores (including 44 overseas), and closed 81 (including 19 overseas),
resulting in a total network of 1,356 stores (including 106 overseas) at the end of the current fiscal year.
Losses on the disposal of inventories resulting from a review of outlet functions and the suspension of some brands
negatively affected earnings. But there was a decline in sales of discounted products by controlling selling prices
more accurately. The result was a 0.1 percentage point improvement in the gross profit margin to 55.5%. But the
SG&A-to-sales ratio increased 0.7 percentage point to 52.3% because of TV commercials and other extensive
advertising activities. As a result, the operating margin was down 0.6 percentage point to 3.2%.
There was an extraordinary loss of 988 million yen for impairment losses at store assets, a 543 million yen loss for
impairment of goodwill, and a 352 million yen loss for the sales of owned assets.
As a result, consolidated net sales in the current fiscal year increased 20.4% year-on-year to 184,588 million yen,operating income increased 3.8% to 5,981 million yen, ordinary income increased 7.0% to 6,452 million yen, andnet income was 503 million yen (net loss of 4,731 million yen in the previous fiscal year).
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 13.5% to 15,732 million yen andearnings per share (EPS), before goodwill amortization, fell 9.6% to 141.71 yen. (*)(*) Amortization of goodwill that mainly resulted from the consolidation of TRINITY ARTS INC. caused large
declines in operating income and all subsequent categories of profits from the previous fiscal year. Since
goodwill amortization is not a cash expense, this amortization created a large gap between changes in cash flows
and changes at all levels of profits starting with operating income. Furthermore, comparisons with foreigncompanies are difficult because of differences in accounting standards of individual countries for recording
goodwill amortization. In consideration of these matters, EBITDA and EPS before goodwill amortization arestated as reference financial indicators.
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 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(Number of stores)
Number of stores
FY2/15

As ofFeb. 28,2014

Merged(Note 4)

Increase/decrease

As ofFeb. 28,2015

Opened,etc.

Rebranded

GLOBAL WORK

173

9

-

(4)

-

5

178

LOWRYS FARM

159

7

LEPSIM LOWRYS FARM

110

15

(1)

(7)

-

(1)

158

-

-

-

15

125

JEANASIS

82

3

1

(2)

-

2

84

RAGEBLUE
HEATHER

62

3

-

(1)

-

2

64

76

7

-

(8)

-

(1)

75

Others

145

33

-

(13)

-

20

165

Total (POINT INC.)

807

77

-

(35)

-

42

849

niko and...

100

18

-

(2)

-

16

116

STUDIO CLIP

129

33

-

-

-

33

162

Brand / region

OthersClosed

54

45

-

(25)

49

69

123

Total (TRINITY ARTS INC.)

283

96

-

(27)

49

118

401

BABYLONE INC.

42

7

-

-

(49)

(42)

-

Total (Japan)

1,132

180

-

(62)

-

118

1,250

Hong Kong

30

2

-

(8)

-

(6)

24

China

21

22

-

(9)

-

13

34

Taiwan

21

7

-

(2)

-

5

26

Singapore

9

1

-

-

-

1

10

South Korea

-

12

-

-

-

12

12

Total (Overseas)

81

44

-

(19)

-

25

106

Total (Group)

1,213

224

-

(81)

-

143

1,356

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. TRINITY ARTS INC. includes figures for its subsidiaries.
4. This table shows the change in the number of stores resulting from the absorption-type merger conducted on April 1,2014 between TRINITY ARTS INC., which is the surviving company, and BABYLONE INC., which was dissolved.

- 3 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(Sales for brands and regions)
Brand / region

FY2/15
Sales (million yen)

YoY change (%)

Composition (%)

GLOBAL WORK

30,20816.4

9.2

LOWRYS FARM

24,553

13.3

(0.2)

LEPSIM LOWRYS FARM

14,0047.6

4.5

JEANASIS

10,356

5.6(0.2)

RAGEBLUE

8,786

4.8

(12.6)

HEATHER

7,451

4.0

(10.4)

Others

24,166

13.1

2.3

Total (POINT INC.)

119,528

64.8

1.3

niko and...

20,506

11.1

114.2

STUDIO CLIP

19,688

10.7

153.8

Others13,2967.2

322.6

53,491

29.0

161.2

764

0.4

(85.0)

4

0.0-

Total (TRINITY ARTS INC.)BABYLONE INC.
OthersTotal (Japan)

173,788

94.2

19.8

Hong Kong

6,698

3.6

33.9

China

1,359

0.8

35.4

Taiwan

1,493

0.8

1.9

Singapore

983

0.5

27.7

264

0.1

-

South Korea
Total (Overseas)

10,7995.8

31.0

Total (Group)

184,588

100.0

20.4

Notes: 1. The number of stores is categorized by using brand operating divisions and geographic regions.
2. TRINITY ARTS INC. includes figures for its subsidiaries.
3. TRINITY ARTS INC. became a consolidated subsidiary in the third quarter of the previous fiscal year.
4. An absorption-type merger was conducted on April 1, 2014 between TRINITY ARTS INC., which is the surviving
company, and BABYLONE INC., which was dissolved.

(Sales for merchandise categories)
Category

FY2/15
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

25,90614.0

1.2

Lady’s apparel (bottoms, tops)

121,540

65.9

27.0

Others37,141

20.1

16.2

184,588

100.0

20.4

Total

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

2) Outlook for the fiscal year ending on February 29, 2016
Although the slow recovery in corporate earnings in Japan is expected to continue, there are still numerous factorsthat pose challenges. Examples include Japan’s declining population as the population ages and the number ofchildren falls, the diversification of consumer lifestyles, and the rapid advance of globalization. In addition, the costof raw materials is rising because of the yen’s depreciation and consumers are reluctant to make purchases after the
consumption tax hike in April 2014. As a result, we expect the operating environment to remain difficult.
To deal with these issues, we have conducted a management integration with TRINITY ARTS INC. and NATURALNINE CO., LTD. (currently N9&PG Co., Ltd.) and shifted to a holding company structure in September 2013.
Subsequently, we reached the decision that another reorganization was needed to benefit fully from this integration. For- 4 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

this reorganization, we absorbed POINT INC. and TRINITY ARTS INC. in March 2015. We believe that this merger
will improve efficiency and enable us to make decisions faster, which will allow us to achieve more growth in corporate
value.
The fiscal year ending on February 29, 2016 is the first year of our new medium-term management plan called
ACE18. All group companies are working on the plan’s strategic objectives. Developing our core brands such as
GLOBAL WORK and niko and… into major global brands is one goal. Group companies will also clearly position
each brand and implement investment strategies that reflect the characteristics of each brand. Furthermore, we plan
to establish a retail SPA (specialty store retailer of private label apparel) framework with an integrated value chain
encompassing planning, production and sales that all originate from information derived from stores.
For the fiscal year ending on February 29, 2016, we forecast a 2.8% increase in consolidated net sales to 189.8
billion yen, a 2.5% increase in gross profit to 105.1 billion yen, a 17.0% increase in operating income to 7 billion
yen, an 8.5% increase in ordinary income to 7 billion yen and net income of 2.4 billion yen.
This forecast assumes: existing-store sales will decrease 1.2%, 80 stores will be opened, and 69 stores will beclosed.
The planned number of stores for major brands and regions of the Group is as follows.
Brand / region

Number of storesat end of period

Brand / region

FY2/15

Number of stores at
end of period
FY2/16 (Plan)

GLOBAL WORK178

GLOBAL WORK180

LOWRYS FARM

158

LOWRYS FARM

158

LEPSIM LOWRYS FARM

125

niko and...

127

JEANASIS84

LEPSIM LOWRYS FARM

131

RAGEBLUE64

STUDIO CLIP

173

HEATHER75

JEANASIS

90

Others165

RAGEBLUE

68849

HEATHER

68

Total (POINT INC.)
niko and...

116

STUDIO CLIP

162

Total (The Company)

Others123

OthersTotal (TRINITY ARTS INC.)
Total (Japan)

Others264
3
Total (Japan)

401
1,250

1,259
1,262

Hong Kong

26

Hong Kong

24

China

38

China

34

Taiwan27

Taiwan26

South Korea

14

Singapore10

Total (Overseas)

105

12

Total (Group)

1,367South Korea
Total (Overseas)

106

Total (Group)

1,356

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. TRINITY ARTS INC. includes figures for its subsidiaries.
4. 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., which were dissolved.
5. No figures for Singapore are shown for the FY2/16 (Plan) because the Company has decided to withdraw frombusiness in Singapore.

- 5 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(2) Analysis of Financial Condition
1) Balance sheet position
AssetsCurrent assets increased 2,963 million yen from as of February 28, 2014 to 34,488 million yen as of February 28,
2015. This was mainly due to increases in notes and accounts receivable-trade of 1,577 million yen and inventoriesof 574 million yen.
Non-current assets increased 1,937 million yen to 49,253 million yen. This was mainly due to increases ininvestment securities of 2,762 million yen and lease and guarantee deposits of 2,191 million yen, while there was adecrease of 2,685 million yen in goodwill.
Liabilities
Current liabilities increased 2,766 million yen to 35,240 million yen. This was mainly due to increases in accounts
payable-other of 1,630 million yen and income taxes payable of 834 million yen.
Non-current liabilities increased 687 million yen to 2,268 million yen. This was mainly due to an increase indeferred tax liabilities of 984 million yen.
Net assets
Net assets increased 1,447 million yen to 46,233 million yen, mainly due to an increase in valuation difference on
available-for-sale securities of 1,910 million yen.
2) Cash flow position
Cash and cash equivalents (hereinafter “net cash”) as of February 28, 2015 amounted to 7,667 million yen, or 862
million yen less than as of February 28, 2014.
A summary of cash flows from each activity during the current fiscal year is as follows:
Cash flows from operating activities
Net cash provided by operating activities totaled 12,112 million yen (an increase of 7,505 million yen, comparedwith the previous fiscal year). The main factors include income before income taxes and minority interests of 4,514
million yen and depreciation of 7,641 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 10,421 million yen (an increase of 3,590 million yen). This was mainly
due to the payments of 7,602 million yen for the purchase of property, plant and equipment involving new store
openings and 3,339 million yen for lease and guarantee deposits.
Cash flows from financing activities
Net cash used in financing activities totaled 2,524 million yen (a decrease of 6,979 million yen). This was mainly
due to a decrease in short-term loans payable of 1,183 million yen and cash dividends paid of 1,336 million yen.

- 6 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

Reference: Cash flow indicators
FY2/13

FY2/14

FY2/15

Shareholders’ equity ratio (%)

60.9

56.8

55.2

Shareholders’ equity ratio based on market prices (%)

117.2

72.4

85.3

0.1

1.2

0.3

1,663.2

50.1

216.3

Interest-bearing debt to cash flow ratio (%)
Interest coverage ratio (times)

Notes: 1. Shareholders’ equity ratio: Shareholders’ equity / Total assets
2. Shareholders’ equity ratio based on market prices: Market capitalization / Total assets
3. Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
4. Interest coverage ratio: Operating cash flows / Interest payments* Market capitalization is calculated by multiplying the closing share price at the end of the period by the number ofshares outstanding at the end of the period, excluding treasury shares.
* Operating cash flows are calculated using the figures for operating cash flows in the consolidated statement of cash
flows. Interest-bearing debt includes all liabilities on the consolidated balance sheet that incur interest. Interest
payments are calculated using the figures for interest expenses paid in the consolidated statement of cash flows.

(3) Basic Policy on Profit Distribution, and Dividend Plans for the Current and Next Fiscal Years
With regard to the distribution of profits, we will make investments in the necessary businesses to develop highly
appealing brands and supply merchandise that can further increase corporate value (shareholder value), which willlead to the satisfaction of both customers and shareholders. For profit distributions to shareholders, we use aconsolidated payout ratio before goodwill amortization of 30% as the basic policy. In addition, we position the
repurchase of treasury shares as one way to return earnings to shareholders. Repurchases will be determined in an
appropriate and timely manner while taking into account changes in our stock price, our financial position and otherfactors.
The year-end dividend for the current fiscal year that ended on February 28, 2015 will be 45 yen per share as
initially planned. Combined with the 30 yen interim dividend, the annual dividend for the current fiscal year is 75
yen per share, which results in a consolidated payout ratio before goodwill amortization of 53%.
For the next fiscal year ending on February 29, 2016, we plan to pay 75 yen for an annual dividend, the same as thedividend for the current fiscal year.
2. Corporate GroupThe Group (the Company and its subsidiary companies) consists of Adastria Holdings Co., Ltd. and 13 consolidated
subsidiaries: POINT INC., TRINITY ARTS INC., N9&PG Co., Ltd., Adastria Asia Co., Ltd. (Hong Kong), POINT(Shanghai) Co., Ltd. (China), POINT TW INC. (Taiwan), ADASTRIA SINGAPORE PTE. LTD. (Singapore),
Adastria Korea Co., Ltd. (South Korea) and five other companies. The sale of merchandise is the primary businessactivity of the Group.
In Japan, the sale of merchandise is conducted by POINT INC. and TRINITY ARTS INC. POINT INC. operates
casual clothing brands nationwide mainly with using SPA format. These brands include GLOBAL WORK, LOWRYS
FARM, LEPSIM LOWRYS FARM, JEANASIS, RAGEBLUE, HEATHER. TRINITY ARTS INC. sells products
nationwide mainly using lifestyle-proposing brands, primarily the niko and… and STUDIO CLIP brands.
The overseas merchandise sales business is conducted mainly by Adastria Asia Co., Ltd., as well as POINT(Shanghai) Co., Ltd., POINT TW INC., ADASTRIA SINGAPORE PTE. LTD. and Adastria Korea Co., Ltd. These
companies use GLOBAL WORK, LOWRYS FARM, niko and…, and other brands.
N9&PG Co., Ltd. performs a comprehensive range of operations starting with the development of original materials
and including patterns, product planning, production management, distribution and quality assurance. This company
has business partners that have manufacturing operations in many locations in Asia.

- 7 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal YearThe following table lists the major brands of the Group.
Company

Brand

Concept

POINT INC.
GLOBAL WORK

Mixing new basic tastes and seasonal trends,
GLOBAL WORK offers fresh and comfortablefashion at reasonable prices to people all over theworld.

LOWRYS FARM

Themeing on quality and relaxation, LOWRYSFARM proposes refreshing styling consisting oftimeless basic items and seasonal trendy items
for women in ordinary lifestyle.

LEPSIM LOWRYS
FARM

Styled on simplicity yet with a sense of
freshness, LEPSIM LOWRYS FARM proposes acasual and unassuming style that blends naturally
into daily life.

JEANASISRAGEBLUEJEANASIS is a fashion brand that makes culture
more fun. The sharp black and refined white
create an image that is for you not bound towhims about it. A strong-willed femininity
emerges in masculine and cool fashion.
Blending American casual taste and European
traditional taste, RAGEBLUE focuses onmaterials and details, and proposes a daily
standard style incorporating elements of popular
trends.

HEATHER

Designed for positive girls who have an everlasting
playful mind, HEATHER proposes perfect stylingwith girlish and edgy items in trend.

niko and…

By nature, something is missing. The niko and…
brand brightens people’s lives by creating
originality through an infusion of its own style.

STUDIO CLIP

Let’s make this day unforgettable. Even though it’s
not a special day. I’d like to catch important things
properly. I’d like to be able to come face with evensmall things. STUDIO CLIP proposes life styles
that match individuals and is based on the concept
of “my house.”

TRINITYARTS INC.

- 8 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal YearAn organizational chart of the Group is as follows.

<The Company> Adastria Holdings Co., Ltd. [Holding company]
Shareholding[Consolidated subsidiary]
N9&PG Co., Ltd.
(Product planning / production
management / logistics)

Order

Deliveryoperations

Delivery / acceptance / storage

Suppliers(Trading companies, etc.)

Order

Customers

logistics[Consolidated subsidiaries(Outside Japan)]
Adastria Asia Co., Ltd.
(Hong Kong)
POINT (Shanghai) Co., Ltd.
(China)POINT TW INC. (Taiwan)
ADASTRIA SINGAPORE PTE.
LTD. (Singapore)
Adastria Korea Co., Ltd.
(South Korea)

Merchandise saleOutsourced[Consolidated subsidiaries]
POINT INC.
TRINITY ARTS INC.

DeliveryAn absorption-type merger was conducted on March 1, 2015 between the Company, which is the surviving company,
and POINT INC. and TRINITY ARTS INC., which were dissolved. An organizational chart of the Group after themerger is as follows.

[Consolidated subsidiary]
N9&PG Co., Ltd.
(Product planning / production
management / logistics)

Order

Deliveryoperations

Delivery / acceptance / storage

Suppliers(Trading companies, etc.)

Customers

logistics[Consolidated subsidiaries(Outside Japan)]
Adastria Asia Co., Ltd.
(Hong Kong)
POINT (Shanghai) Co., Ltd.
(China)POINT TW INC. (Taiwan)
Adastria Korea Co., Ltd.
(South Korea)

Merchandise saleOutsourced<The Company>
Adastria Holdings Co., Ltd.

Order

Delivery
Note: ADASTRIA SINGAPORE PTE. LTD is not shown because the Company has decided to withdraw from business in
Singapore.
- 9 -Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

3. Management Policies(1) Basic Management Policy
The Group established a new corporate philosophy at the beginning of the fiscal year ending on February 29, 2016.
Our Belief
Become a person that is essential to others and a company that is essential to others
The business activities of the Group are distinguished by the following characteristics.
1) Multi Brands
From all the options available, customers choose those items that best reflect their unique individuality. The Group
maintains a portfolio of diverse brands to suit each customer’s preferences and lifestyle.
2) Multi Categories
In addition to apparel, we offer a broad range of fashion categories and items – from bags, shoes and kitchen goods
to furniture and much more.
3) Value Chain
We quickly make use of trends and store information in our product development. Our streamlined value chain
covers everything from planning, to manufacturing, distribution, and sales, enabling us to provide new fashion tocustomers around the world.
(2) Performance Targets
The Group places priority on performance indicators associated with earnings and efficiency. The goal is to increase
operating income, EBITDA, which is an indicator of the ability to generate cash, and other indicators. To
accomplish this, the Group will differentiate its products by strengthening internal planning and production
operations and conduct various strategies in a manner that reflects the characteristics of each brand. For ROE, thegoal is to increase this return by increasing earnings.
(3) Medium- to Long-term Business Strategy
In Japan, the apparel market is shrinking and changing as the population declines and the number of seniors
increases. Furthermore, progress with information technology is making activities of all types borderless. Bigchanges are taking place in the behavior and values of consumers as a result. No longer is it possible to earn the
support of customers by using conventional business formats and sales methods.
To succeed amid these mega-trends, we established a new medium-term management plan called ACE18 that willend in the fiscal year ending on February 28, 2018. We want to become the leader in the growing markets of the
future. Accomplishing this will require targeting more market sectors in order to propose lifestyles to an evenbroader range of customer segments. The Group will aggressively take actions aimed at meeting the expectations ofshareholders and achieving long-term growth in corporate value.
■ Our vision“Change”

Make market sectors with growth potential the primary focus of operations“Challenge”

Increase originality by building a retail SPA centered on stores“Collaboration” Aim for activities that make customers happy by fostering a corporate culture of sharing, working
together and empathy- 10 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

■ Core strategies
1. Develop our core brands
Make GLOBAL WORK and niko and… major brands that are successful around the world.
2. Aggressively target the middle-age and senior markets
Expand the targeted customer segments of STUDIO CLIP and LEPSIM LOWRYS FARM to reflect the ongoingchange in the composition of Japan’s population.
3. Reinforce the multi-brand strategy
Clearly position brands in each market sector while differentiating internal and external brands to prevent brands
from looking alike.
4. Use the Internet to attract more customers
Build a framework in which Internet and store operations work together seamlessly. Use customer relationshipmanagement “big data” for brand communication activities and the development of new products.
5. Add more lifestyle categories
Expand operations to cover more categories in order to meet customers’ demands involving different lifestyles.
■ Build a retail SPA framework centered on stores
Our goal is to sell seasonal merchandise with outstanding quality and affordable prices. To accomplish this, we will
incorporate trends and sales information derived from stores into our product planning and build a retail SPA
framework based on an integrated value chain encompassing planning, production and sales.
■ Numerical targets
Our targets for the fiscal year ending on February 28, 2018 are consolidated net sales of 210 billion yen andoperating income of 14.8 billion yen.
FY2/15(billion yen)
Net sales
Operating income

184.5
5.9

- 11 -

FY2/18 (Targets)(billion yen)
210.0
14.8

Growth rate
13.8%
150.8%

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(4) Challenges
Significant changes are taking place in Japan’s apparel retailing industry. Major sources of change are the country’s
aging population and falling number of children, the increasing diversity of lifestyles, and competition from foreign
retailers that are entering Japan. Furthermore, strengthening value chains in order to support growth in Japan as wellas in overseas markets has become an important management issue because of globalization.
To be a winner in this environment, we believe that actions are needed to deal with the following issues.
1) The Company absorbed POINT INC. and TRINITY ARTS INC. in March 2015. Following this merger, we aremoving quickly to establish a business foundation for future growth. One of our highest priorities is building an
infrastructure capable of targeting an even broader spectrum of markets in Japan and other countries.
2) The workforce and organization of the Group have been growing along with the management integration and theincreasing scale of operations at group companies. Moreover, we expect that our network of offices andsubsidiaries will increase along with the expansion of our overseas operations. As we grow, we will need toensure that the entire group aims for the same goals and adheres to the same code of conduct. At the same time,
we must accumulate and share information, know-how and knowledge. All of these actions will be needed to
conduct business activities that can satisfy our customers. In addition, aiming for growth as a company isequivalent to aiming for the growth of the employees who perform the company’s activities. This is why we must
work on ways to continue providing employees an environment that enables them to upgrade their skills
continuously.
3) Japan is undergoing an unprecedented social change as its population ages and the number of children falls. We
must respond appropriately to the resulting changes in markets and lifestyles. Redefining the positioning ofexisting brands and creating a growth strategy that reflects brand characteristics will be two important actions.
Our success will also require becoming a source of new forms of added value for our customers, such as bydeveloping new brands and utilizing the Internet and social networking services.
4) For operations in Japan and growth overseas, the Group will have to create and manufacture merchandise with
substantial added value and then maintain a reliable supply of those products at all business locations.
Maximizing the added value that we offer our customers by performing the centralized oversight of every step,from product planning to manufacturing, distribution and sales, and then using this infrastructure to build aunique “value chain” will be vital to achieving sustained growth.

- 12 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

4. Consolidated Financial Statements(1) Consolidated Balance Sheet(Million yen)
FY2/15(As of Feb. 28, 2015)

FY2/14(As of Feb. 28, 2014)
AssetsCurrent assets
Cash and deposits

8,540

7,677

Notes and accounts receivable-trade

6,016

7,593

Inventories

13,914

14,488Deferred tax assets

1,392

1,883

Other

1,695

2,893

Allowance for doubtful accounts

(33)

(48)

31,52534,488

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

3,438

3,405

Accumulated depreciation(1,217)(1,418)

Buildings and structures, net

2,221

1,987

Store interior equipment

21,774

26,055

Accumulated depreciation(13,082)(17,634)

Store interior equipment, net

8,692

8,420

2,321

1,732

168

167

Land
Construction in progress
Other

1,594

1,208

Accumulated depreciation

(902)

(608)

Other, net

691

600

14,095

12,908Goodwill

10,606

7,921

Other

1,182

1,372

Total intangible assets

11,7899,293

Investment securities

4,842

7,604

Lease and guarantee deposits

14,732

16,924

Deferred tax assets

1,840

2,578

Total property, plant and equipment
Intangible assets

Investments and other assets

Other

225

176

Allowance for doubtful accounts

(210)

(232)

Total investments and other assets

21,43027,05147,31549,25378,841

83,742

Total non-current assets
Total assets- 13 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(Million yen)
FY2/15(As of Feb. 28, 2015)

FY2/14(As of Feb. 28, 2014)
Liabilities
Current liabilities
Notes and accounts payable-trade
Electronically recorded obligations - operating

14,626

6,246

-

8,855

Short-term loans payable

4,734

3,753

Accounts payable-other

8,056

9,687

Income taxes payable

2,458

3,293

Deferred tax liabilities

28

210

Provision for bonuses

1,594

2,036

290

358

Other provision
Other

685

797

32,47435,240

Deferred tax liabilities

925

1,909

Provision for directors’ retirement benefits

101

95

Total current liabilities
Non-current liabilities

Other

554

263

1,580

2,268

34,05437,508

Capital stock

2,660

2,660

Capital surplus

6,986

6,987

Retained earnings

33,48232,651

Treasury shares

(407)

(406)

Total shareholders’ equity

42,722

41,892

1,720

3,631

Deferred gains or losses on hedges

28

357

Foreign currency translation adjustment

308

352

2,058

4,341

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

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

Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets- 14 -

5-

44,786

46,23378,841

83,742

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income(Million yen)
FY2/15(Mar. 1, 2014 – Feb. 28, 2015)

FY2/14(Mar. 1, 2013 – Feb. 28, 2014)
Net sales

153,273

184,588

Cost of sales

68,40482,064Gross profit

84,869102,524

Advertising expenses

4,770

6,424

Provision of allowance for doubtful accounts

(15)

37

Selling, general and administrative expenses

Directors’ compensations

553

391

Salaries and bonuses

20,45625,740

Provision for bonuses

1,521

1,882

Welfare expenses

3,525

4,161

Rents

26,341

31,710

Lease payments

656

485

Depreciation

5,968

7,356

Amortization of goodwill

2,130

2,394

Other

13,19815,958

Total selling, general and administrative expenses

79,10696,542

5,762

5,981

Operating income
Non-operating income
Interest income

66Dividend income

69

82

House rent income

85

67

Insurance premiums refunded cancellation

73-

Revenue from electric power sales

37

44

System lease income

24-

Foreign exchange gains

-

262

Other

201

233

Total non-operating income

499

697

91

56

Commitment fee

8-Foreign exchange losses

16-

Commission for purchase of treasury shares

20-

Payments for employment of disabilities

51-

Loss on valuation of derivatives-

154

Non-operating expenses
Interest expenses

Other

46

16

Total non-operating expenses

234

226

6,027

6,452

Ordinary income- 15 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(Million yen)
FY2/15(Mar. 1, 2014 – Feb. 28, 2015)

FY2/14(Mar. 1, 2013 – Feb. 28, 2014)
Extraordinary income
Gain on step acquisitions
Gain on sales of investment securities
Total extraordinary income

202

-

-

9

202

9

1

352

Extraordinary losses
Loss on sales of non-current assets
Impairment loss
Amortization of goodwill
Loss on valuation of investment securities
Total extraordinary losses

452

1,531

6,196

-

-

63

6,650

1,947

Income (loss) before income taxes and minority
interests

(420)

4,514

Income taxes-current

4,523

5,037

Income taxes-deferred(212)(1,026)

Total income taxes

4,311

4,010

Income (loss) before minority interests(4,731)503

Net income (loss)(4,731)503- 16 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

Consolidated Statement of Comprehensive Income(Million yen)
FY2/15(Mar. 1, 2014 – Feb. 28, 2015)

FY2/14(Mar. 1, 2013 – Feb. 28, 2014)
Income (loss) before minority interests(4,731)

503

Valuation difference on available-for-sale securities

928

1,910

Deferred gains or losses on hedges

21

328

Foreign currency translation adjustment

326

43

Other comprehensive income

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to minority
interests- 17 -

1,276

2,283

(3,455)2,787(3,455)

2,787

-

-

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(3) Consolidated Statement of Changes in Equity
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodTotal shareholders’equityCapital surplus Retained earnings Treasury shares

2,660

2,517

40,826(8,188)37,816

Changes of items during period
Dividends of surplus(2,612)(2,612)

Net income (loss)(4,731)(4,731)

Purchase of treasury shares(4,014)

Disposal of treasury shares
Increase by share exchanges
Issuance of new shares-exerciseof subscription rights to shares
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period(4,014)

0

0

4,460

11,75916,219

8

36

45
-

-

4,468

(7,344)

7,781

4,906

2,660

6,986

33,482(407)

42,722(Million yen)

Accumulated other comprehensive income
Valuationdifference on
available-for-sale
securities
Balance at beginning of current
period792

Total
Foreignaccumulated Subscription
Total net assets
currency
rights to shares
othertranslation
comprehensive
adjustment
incomeDeferred
gains orlosses onhedges
7

(17)

781

-

38,598Changes of items during period
Dividends of surplus-(2,612)

Net income (loss)-(4,731)

Purchase of treasury shares-(4,014)

Disposal of treasury shares-

0

Increase by share exchanges-

16,219-45

Issuance of new shares-exerciseof subscription rights to shares
Net changes of items other thanshareholders’ equity
Total changes of items during
period

928

21

326

1,276

5

1,281

928

21

326

1,276

5

6,187

Balance at end of current period

1,720

28

308

2,058

5

44,786- 18 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

FY2/15 (Mar. 1, 2014 – Feb. 28, 2015)(Million yen)
Shareholders’ equity
Capital stock
Balance at beginning of current
periodCapital surplus Retained earnings Treasury shares

2,660

6,986

33,482

Total shareholders’equity(407)

42,722

Changes of items during period
Dividends of surplus(1,335)

Net income(1,335)503

503

Purchase of treasury shares

(4)

(4)

Disposal of treasury shares

00Increase by share exchanges-

Issuance of new shares-exerciseof subscription rights to shares
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

0

4

5
-

-

0

(831)

0

(830)

2,660

6,987

32,651(406)

41,892(Million yen)

Accumulated other comprehensive income
Valuationdifference on
available-for-sale
securities
Balance at beginning of current
period1,720

Deferred
gains orlosses onhedges28

Total
Foreign
Subscription
accumulated
Total net assets
currency
rights to shares
othertranslation
comprehensive
adjustment
income
308

2,058

5

44,786

Changes of items during period
Dividends of surplus-(1,335)

Net income-

503

Purchase of treasury shares-(4)

Disposal of treasury shares-

0

Increase by share exchanges

-

-

-

5

Issuance of new shares-exerciseof subscription rights to shares
Net changes of items other thanshareholders’ equity
Total changes of items during
period

1,910

328

43

2,283

(5)

2,278

1,910

328

43

2,283

(5)

1,447

Balance at end of current period

3,631

357

352

4,341

-

46,233- 19 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(4) Consolidated Statement of Cash Flows(Million yen)
FY2/14
FY2/15(Mar. 1, 2013 – Feb. 28, 2014) (Mar. 1, 2014 – Feb. 28, 2015)
Cash flows from operating activities
Income (loss) before income taxes and minority interests

(420)

4,514

Depreciation

6,212

7,641

Impairment loss

452

1,531

Amortization of goodwill

8,326

2,394

Interest and dividend income

(75)

(89)

Interest expenses

91

56

Loss (gain) on step acquisitions

(202)

-

Increase (decrease) in provision for bonuses

(138)

435

Increase (decrease) in allowance for doubtful accounts

(17)

37

Decrease (increase) in notes and accounts receivable - trade

2,648(1,489)Decrease (increase) in inventories(2,595)(388)

Increase (decrease) in notes and accounts payable - trade(4,658)

323

212

264

Increase (decrease) in accrued consumption taxes

424

1,306

Other, net

(662)

296

Subtotal

9,597

16,834

Increase (decrease) in accounts payable - other

Interest and dividend income received

75

89Interest expenses paid

(91)

(56)

Income taxes paid

(4,974)(4,754)

Net cash provided by (used in) operating activities

4,606

12,112(5,360)(7,602)

-

375

(636)

(759)

(1)

(1)

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities-

24

Payments for lease and guarantee deposits(1,950)(3,339)Proceeds from collection of lease and guarantee deposits

1,018

875

98

6

(6,831)(10,421)(2,091)(1,183)

Proceeds from long-term loans payable

257-

Repayments of long-term loans payable

(886)

-

Cash dividends paid

(2,612)(1,336)

Purchase of treasury shares(4,014)(4)

Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term loans payable

Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

(155)

0

(9,503)(2,524)161(28)

Net increase (decrease) in cash and cash equivalents(11,567)(862)

Cash and cash equivalents at beginning of period

18,338

8,529

Increasing of cash and cash equivalents for stock exchange

1,758

-

Cash and cash equivalents at end of period

8,529

7,667

- 20 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Segment and Other Information
Segment information
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
FY2/15 (Mar. 1, 2014 – Feb. 28, 2015)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
Related information
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
1. Information by product or service
Omitted since sales to external customers in the category of a single product or service exceeded 90% of net sales
on the consolidated statement of income.
2. Information by region(1) Net sales
Omitted since sales to external customers in Japan exceeded 90% of net sales on the consolidated statement ofincome.
(2) Property, plant and equipment
Omitted since property, plant and equipment in Japan exceeded 90% of property, plant and equipment on the
consolidated balance sheet.
3. Information by major client
Omitted since there is no sales to external customers whom accounted for 10% or more of net sales on the
consolidated statement of income.
FY2/15 (Mar. 1, 2014 – Feb. 28, 2015)
1. Information by product or service
Omitted since sales to external customers in the category of a single product or service exceeded 90% of net sales
on the consolidated statement of income.
2. Information by region(1) Net sales
Omitted since sales to external customers in Japan exceeded 90% of net sales on the consolidated statement ofincome.
(2) Property, plant and equipment
Omitted since property, plant and equipment in Japan exceeded 90% of property, plant and equipment on the
consolidated balance sheet.

- 21 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

3. Information by major client
Omitted since there is no sales to external customers whom accounted for 10% or more of net sales on the
consolidated statement of income.
Information related to impairment losses on non-current assets for each reportable segment
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
FY2/15 (Mar. 1, 2014 – Feb. 28, 2015)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
Information related to goodwill amortization and the unamortized balance for each reportable segment
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
FY2/15 (Mar. 1, 2014 – Feb. 28, 2015)
Omitted since the Group has only a single business segment, which is the planning and sales of clothing and related
merchandise.
Information related to gain on bargain purchase for each reportable segment
FY2/14 (Mar. 1, 2013 – Feb. 28, 2014)
Not applicable.
FY2/15 (Mar. 1, 2014 – Feb. 28, 2015)
Not applicable.

- 22 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal YearPer Share Information
FY2/14(Mar. 1, 2013 – Feb. 28, 2014)(Yen)
FY2/15(Mar. 1, 2014 – Feb. 28, 2015)

Net assets per share

1,844.17

1,904.03

Net income (loss) per share(206.42)

20.75

Diluted net income per share

-

20.75

Notes: 1. Diluted net income per share in FY2/14 is not presented since the Company has outstanding dilutive securities, thoughposted a net loss.
2. The basis of calculating the net income (loss) per share and diluted net income per share is as follows.
(Million yen)
FY2/15(Mar. 1, 2014 – Feb. 28, 2015)

FY2/14(Mar. 1, 2013 – Feb. 28, 2014)
Net income (loss) per share
Net income (loss)(4,731)

503

Amount not available to common stockholders--

Net income (loss) applicable to common stock(4,731)503

Average number of shares of common stock
outstanding during the period (Thousand shares)

22,922

24,282

-

-

-

0

-

-

Diluted net income per share
Adjusted net income (Million yen)
Increase in the number of common stock(Thousand shares)
Summary of potential stock not included in thecalculation of diluted net income per share since there
was no dilutive effect- 23 -

Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

Subsequent Events
Transaction under Common Control
On March 1, 2015, the Company’s consolidated subsidiary TRINITY ARTS INC. was absorbed by anotherconsolidated subsidiary POINT INC. and then, the Company absorbed the post-merger POINT INC. on the sameday.
(1) Summary of merger
1) Name and business activities of companies involving merger
Name of companies involving merger:

Surviving company
Dissolving companies

Adastria Holdings Co., Ltd.
POINT INC. and TRINITY ARTS INC.

Business activities:

Manufacture and retail sales of casual apparel, accessories and otherconsumer products

2) Date of merger
March 1, 20153) Method of merger
An absorption-type merger between Adastria Holdings Co., Ltd., which will be the surviving company, andPOINT INC. and TRINITY ARTS INC., which will be dissolved.
4) Name of the company after merger
Adastria Holdings Co., Ltd.
(At the General Meeting of Shareholders to be held in May 2015, name of the company will be changed to
Adastria Inc.)
5) Item concerning summary of other transactions
In September 2013, the Group conducted a management integration along with a shift to a holding company
structure for the purpose of maximizing corporate value while preserving the corporate culture of each groupcompany. The management integration succeeded at attracting a broader range of customer segments to stores,
mainly by enabling all group companies to offer larger selection of merchandise. However, the integration did
not yield sufficient benefits in terms of earnings due to the time needed to build an optimized value chain,product planning that required greater accuracy and growth in operating expenses. Since the integration, there
has been progress involving the integration of operating systems and the mutual understanding of group company
corporate cultures. We need to improve merchandise planning, speed up decision making, conduct effective
advertising campaigns, optimize store locations, cut back-office expenses, and further streamline procurementand distribution operations. Consequently, we reached the decision that a further reorganization is needed to takefull advantage of the benefits of the management integration. To accomplish this, the Company will merge withthe two primary business units of the Group, POINT INC. and TRINITY ARTS INC.
We believe that this merger will create an operating framework that will increase corporate value by improving
efficiency and speeding up decision making.
(2) Summary of accounting methods applied
Accounting methods used for this merger as a transaction under common control are based on “Accounting Standard
for Business Combinations” (Accounting Standards Board of Japan (ASBJ) Statement No. 21, issued on December
26, 2008) and the “Guidance on Accounting Standard for Business Combinations and Accounting Standard forBusiness Divestitures” (ASBJ Guidance No. 10, issued on December 26, 2008).

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Adastria Holdings Co., Ltd. (2685) Summary of Financial Results for February 2015 Fiscal Year

5. Other Information(1) Changes in Directors
1. Change in representative director (Date of change: May 28, 2015)(1) Retiring representative director
Representative Director, President

Yoichi Endo

2. Change of other board members (Date of change: May 28, 2015)(1) Candidate for director appointment
Director

Masa Matsushita(Currently Advisor of the Company)(2) Retiring director
Director

Hidenori Miyamoto(3) Candidate for corporate auditor appointment
Corporate Auditor

Naoki Iwasaki(Currently Advisor of the Company)(4) Retiring corporate auditor
Corporate Auditor

Makoto Takahashi

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 the convenience of readers who
prefer an English translation.

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