Summary of Consolidated Financial Results for the Fiscal Year Ended February 29, 2020
[Japanese GAAP]
April 3, 2020

Company name: Adastria Co., Ltd.
Listing: TSE 1st section
Stock code:
2685
URL: https://www.adastria.co.jp
Representative: Michio Fukuda, Chairman of the Board
Kazushi Sekimori,Contact:
Deputy Executive General Manager, General Headquarters of Management Tel: +81-3-5466-2050
Scheduled date of Annual General Meeting of Shareholders:
May 28, 2020
Scheduled date of payment of dividend:
May 11, 2020
Scheduled date of filing of Annual Securities Report:
May 29, 2020
Preparation of supplementary materials for financial results:
Yes
Holding of financial results meeting:
None
Note: The original disclosure in Japanese was released on April 3, 2020 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 29, 2020
(March 1, 2019 – February 29, 2020)(1) Consolidated results of operations(Percentages shown for net sales and incomes represent year-on-year changes)
Net income
Net sales
Operating profit
Ordinary profit
attributable to ownersof the parent

Million yen

Fiscal year ended Feb. 29, 2020
Fiscal year ended Feb. 28, 2019
Note: Comprehensive income%

222,376
222,664

Million yen

(0.1)
(0.1)

%

12,885
7,190

Million yen

79.2
43.7

%

12,843
7,345

Million yen

74.8
35.3

%

6,363
3,890

63.6
350.3

Fiscal year ended Feb. 29, 2020:
Fiscal year ended Feb. 28, 2019:

6,646 million yen
3,517 million yen

Net income per
share

Diluted net
income per share

ROE

Ratio of ordinary
income to total assets

Ratio of operating
income to net sales

Yen

Yen

%

%

%

Fiscal year ended Feb. 29, 2020
Fiscal year ended Feb. 28, 2019135.0882.67-(up 89.0%)
(-%)

11.6
7.5

13.6
8.1

5.8
3.2

Reference: EBITDA

Fiscal year ended Feb. 29, 2020:
20,357 million yen (up 32.9%)
Fiscal year ended Feb. 28, 2019:15,317 million yen (up 1.2%)
EPS before goodwill amortization
Fiscal year ended Feb. 29, 2020:
138.63 yen (up 25.5%)
Fiscal year ended Feb. 28, 2019:110.42 yen (down 6.9%)(*) For more details regarding definition, computational method and other matters of these indices, please refer to the secti on“Results of Operations” on page 2.

(2) Consolidated financial position
Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of Feb. 29, 2020
As of Feb. 28, 201997,924
91,26357,041
52,959Net assets per share
Yen

58.3
58.0

1,210.55
1,125.29

Reference: Shareholders’ equity
As of Feb. 29, 2020: 57,041 million yen
As of Feb. 28, 2019: 52,959 million yen
Note: Starting with the beginning of the current fiscal year, Adastria is applying “Partial Amendments to Accounting Standard for Tax
Effect Accounting” (Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018). Figures as of Feb. 28,
2019 have been adjusted retroactively in accordance with these amendments.

(3) Consolidated cash flow position
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of theperiodMillion yen

Million yen

Million yen

Million yen

Fiscal year ended Feb. 29, 2020
Fiscal year ended Feb. 28, 2019

20,8509,904(6,645)(8,686)(6,439)(1,890)26,377
18,647

2. Dividends
Dividend per share
1Q-endYen

Fiscal year ended Feb. 28, 2019
Fiscal year ended Feb. 29, 2020
Fiscal year ending Feb. 28, 2021
(forecast)

2Q-endYen

3Q-end Year-end
Yen

Total

Total
dividends

Yen

Yen

Million yen

-

20.00
25.00

-

30.00
25.00

50.00
50.00

2,379
2,382

-

-

-

-

-

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

%

60.5
37.0

4.5
4.3

-

Note: The dividends for the fiscal year ending February 28, 2021 are undecided at this time and will be disclosed promptly when
forecasts are announced.

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2021 (March 1, 2020 – February 28, 2021)
The COVID-19 crisis is continuing to have a negative impact on customer traffic and sales at stores because of weakening
consumer sentiment as people in Japan stay at home, reduced store operating hours and other reasons. Due to the numerous
uncertainties about how this crisis will affect results of operations, Adastria believes that it is not possible to establish a reliable
forecast for the fiscal year ending in February 2021 at this time. An announcement will be made as soon as it becomes possibl eto determine a forecast.

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries re sulting in changes inscope of consolidation): Yes
Newly added: 1

Adastria (Shanghai) Co., Ltd.

Excluded: -(2) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: Yes
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None
Note: Please refer to the section “3. Consolidated Financial Statements and Notes, (5) Notes to Conso lidated Financial
Statements, Changes in Accounting Policies” on page 15 for further information.

(3) Number of outstanding shares (common stock)1) Number of shares outstanding at the end of the period (including treasury shares)
As of Feb. 29, 2020:
48,800,000 shares
As of Feb. 28, 2019:

48,800,000 shares

2) Number of treasury shares at the end of the period
As of Feb. 29, 2020:
1,679,557 shares

As of Feb. 28, 2019:

1,736,973 shares

3) Average number of shares outstanding during the period
Fiscal year ended Feb. 29, 2020:
47,107,114 sharesFiscal year ended Feb. 28, 2019:47,058,592 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended February 29, 2020
(March 1, 2019 – February 29, 2020)(1) Non-consolidated results of operations
Net sales

Operating profit

Million yen

Fiscal year ended Feb. 29, 2020
Fiscal year ended Feb. 28, 2019

197,451
195,427

%

1.0
(2.4)

Million yen%

12,0107,442(Percentages represent year-on-year changes)
Ordinary profit
Net income
Million yen

61.4
15.7

10,757
7,280

Net income per share

Diluted net income per share

Yen

Yen

Fiscal year ended Feb. 29, 2020
Fiscal year ended Feb. 28, 2019126.45
44.18

%

47.8
17.9

Million yen

5,956
2,078

%

186.5
211.1

-

(2) Non-consolidated financial position

As of Feb. 29, 2020
As of Feb. 28, 2019
Reference: Shareholders’ equity

Total assets

Net assets

Equity ratio

Million yen

Million yen%

84,06580,490
As of Feb. 29, 2020:

50,51846,96850,518 million yen

Net assets per share
Yen

60.1
58.4
As of Feb. 28, 2019:

1,072.11
998.0046,968 million yen

Note 1: The current financial report is not subject to audit by certified public accountants or auditing firms.
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 Adastria regarding future performance. Actual results may differ
significantly from these forecasts for a number of factors. Please refer to the section “1. Overview of Results of Operations(4) Outlook” on page 6 regarding preconditions or other related matters for the forecast shown above.

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

Contents of Attachments
1. Overview of Results of Operations

2(1) Results of Operations

2(2) Financial Position

4(3) Cash Flows

5(4) Outlook

6(5) Basic Policy on Profit Distribution, and Dividend Plans for the Current and Next Fiscal Years6

2. Basic Approach for the Selection of Accounting Standards

6

3. Consolidated Financial Statements and Notes

7(1) Consolidated Balance Sheet

7(2) Consolidated Statements of Income and Comprehensive Income

9(3) Consolidated Statement of Changes in Equity

12(4) Consolidated Statement of Cash Flows

14(5) Notes to Consolidated Financial Statements

15

Going Concern Assumption

15

Changes in Accounting Policies

15

Reclassifications

15

Segment Information

15

Per Share Information

15

Subsequent Events

15

- 1 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

1. Overview of Results of Operations(1) Results of Operations
Consolidated results
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

FY2/20(Mar. 1, 2019 – Feb. 29, 2020)

YoY change(Amount)(Million yen)
YoY change(%)

222,664

222,376

(288)

(0.1)

Operating profit

7,190

12,885

5,695

79.2

Ordinary profit

7,345

12,843

5,498

74.8

Net income attributableto owners of the parent

3,890

6,363

2,473

63.6

EBITDA

15,317

20,357

5,040

32.9

EPS before goodwill
amortization (Yen)

110.42138.63

28.20

25.5

Net sales

Consolidated net sales decreased 0.1% year-on-year to 222,376 million yen, operating profit increased 79.2% to12,885 million yen, ordinary profit increased 74.8% to 12,843 million yen, and net income attributable to ownersof the parent increased 63.6% to 6,363 million yen.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 32.9% to 20,357 million yen
and earnings per share (EPS) before goodwill amortization rose 25.5% to 138.63 yen. (*)
Sales in Japan were 1.1% higher than one year earlier, despite the negative effects of unfavorable weather during
the fall and winter seasons. The main reasons were a solid recovery in the sales of core brands such as GLOBAL
WORK, LOWRYS FARM that had difficulties in the previous fiscal year and steady sales of niko and …,
BAYFLOW and other brands, as well as strong performance of Japanese subsidiaries ELEMENT RULE Co., Ltd.
and BUZZWIT Co., Ltd.
Operation of the “.st” e-commerce site was suspended from August 8 to September 12 due to problems with theswitch to the new system. There have been no problems since the operation of this website was restarted. The
number of members is increasing steadily and has surpassed 10 million.
In other countries, sales were steady in the United States and Taiwan. In Hong Kong and China, sales were down
following the closing of unprofitable stores in the previous fiscal year.
We opened 55 stores (including 9 overseas) and closed 90 stores (including 17 overseas), resulting in a total of
1,392 stores (including 77 overseas) at the end of the fiscal year.
The consistent provision of products on a “proper timing, pricing and volumes” basis has resulted in the stable
management of operations and tighter control of sales at reduced prices , which greatly improved the discounting
ratio. As a result, the gross profit margin increased 1.6 percentage points from one year earlier to 55.5%.
The ratio of selling, general and administrative (SG&A) expenses to sales decreased 1.0 percentage points to
49.7%, resulting in a 2.6 percentage point increase in the operating margin to 5.8%. SG&A expenses were 2,333
million yen less than one year earlier. The main reasons were a decrease in promotion expenses and lower rent
following the closure of unprofitable stores. The completion at the end of the previous fiscal year’s first half ofamortization of goodwill resulting from the consolidation of TRINITY ARTS (subsequently absorbed by
Adastria) also reduced SG&A expenses.
There were impairment losses of 1,303 million yen on store assets and 1,511 million yen on software for which
there is little potential for utilization due to changes in the IT system development plan. These losses arerecorded as extraordinary losses.

- 2 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year(*) Since the fiscal year that ended on February 28, 2014, the amortization of goodwill, which is not a cash
expense, has created a large gap between changes in cash flows and changes in operating profit and all
subsequent levels of earnings. Furthermore, comparisons with foreign companies are difficult because ofdifferences in accounting standards of individual countries for recording goodwill amortization. As a result,
we disclose EBITDA and EPS before goodwill amortization as reference financial indicators.
EBITDA
Operating profit + Depreciation + Amortization of goodwill (SG&A expenses)
EPS before goodwill amortization(Net income attributable to owners of the parent + Amortization of goodwill (SG&A expenses and extraordinary
losses) + Impairment losses (goodwill)) / Average number of shares outstanding during the period
Supplementary Information(1) Sales for Brands and Regions
Brand / region

FY2/20
Sales (million yen)

YoY change (%)

Composition (%)

GLOBAL WORK

41,71018.8

2.1

niko and ...

32,017

14.4

3.4

LOWRYS FARM

23,691

10.6

5.3

STUDIO CLIP

22,444

10.1

(5.1)

LEPSIM

14,335

6.4(3.2)

JEANASIS

11,9245.4(3.6)

BAYFLOW

9,852

4.4

12.2

RAGEBLUE

7,712

3.5

(1.4)

Others (Note 3)

30,831

13.9

0.8

Total (Adastria)

194,518

87.5

1.1

BUZZWIT Co., Ltd. (Note 3)

4,908

2.2

(15.5)ELEMENT RULE Co., Ltd.

10,112

4.5

9.4

170

0.1

-

209,709

94.3

1.1

3,431

1.6

(35.3)

China

473

0.2

(66.6)

Taiwan

2,532

1.1

4.9

South Korea

1,156

0.5

(4.3)

USA

5,072

2.3

2.7

Other consolidated subsidiaries
Total (Japan)
Hong Kong

Notes:

Total (Overseas)

12,666

5.7(17.1)

Total (Group)

222,376

100.0

(0.1)

1. The number of stores is categorized by using brand operating divisions and geographic regions.
2. The above figures are sales to external customers and do not include internal sales between consolidated
subsidiaries.
3. In August 2018, three business units including the PAGEBOY business unit of BUZZWIT Co., Ltd. (formerly
ALICIA CO., LTD.) were transferred to Adastria. As a result, the rate of YoY change was calculated based on thesales of the three business units prior to the transfer, which were included in BUZZWIT sales.

- 3 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

(2) Sales for Merchandise Categories
Category
Men’s apparel (bottoms, tops)
Women’s apparel (bottoms, tops)
Others
Total
Notes:

FY2/20
Sales (million yen)
Composition (%)
33,192
14.9
146,68166.0
42,501
19.1
222,376
100.0

YoY change (%)
4.6
(0.4)
(2.6)
(0.1)

1. The others category includes additions to the provision for point card certificates and other items.
2. The above figures are sales to external customers and do not include internal sales between consolidated s ubsidiaries.

(3) Number of Stores
Number of stores
Brand / region

As of theend of
FY2/19213

FY2/20

As of theend of
FY2/20
210

4

-

(7)

Increase/decrease(3)

niko and ...

139

8

-

(3)

5

144

LOWRYS FARM

139

1

-

(4)

(3)

136

STUDIO CLIP

190

3

-

(10)

(7)

183

LEPSIM

132

2

-

(6)

(4)

128

JEANASIS

73

-

-

-

-

73

BAYFLOW

49

7

-

(2)

5

54

RAGEBLUE

58

-

-

(4)

(4)

54

Others

269

8

-

(30)

(22)

247

GLOBAL WORK

Total (Adastria)

OpenedClosedChanged

1,262

33

-

(66)

(33)

1,229

BUZZWIT Co., Ltd.

5

3

-

(1)

2

7

ELEMENT RULE Co., Ltd.

75

8

-

(6)

2

77

Other consolidated subsidiaries

-

2

-

-

2

2

1,342

46

-

(73)

(27)

1,315

Hong Kong

20

-

-

(4)

(4)

16

China

10

1

-

(10)

(9)

1

Taiwan

34

6

-

(3)

3

37

South Korea

12

1

-

-

1

13

Total (Japan)

9

1

-

-

1

10

Total (Overseas)

85

9

-

(17)

(8)

77

Total (Group)

1,427

55

-

(90)

(35)

1,392

USA

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 Adastria.

(2) Financial Position
AssetsCurrent assets increased 5,184 million yen from as of February 28, 2019 to 53,234 million yen as of February 29,
2020. This was mainly due to increases of 7,736 million yen in cash and deposits and 174 million yen in notes
and accounts receivable-trade, while there was a decrease of 2,583 million yen in inventories.
Non-current assets increased 1,476 million yen to 44,689 million yen. This was mainly due to increases of 2,928
million yen in other, net under property, plant and equipment, partly because of right-of-use assets resulting fromthe application of IFRS 16, and 695 million yen in deferred tax assets, while there were decreases of 876 million
yen in store interior equipment, net, 586 million yen in investment securities, and 987 million yen in leasehold
and guarantee deposits.

- 4 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

Liabilities
Current liabilities increased 633 million yen to 37,462 million yen. This was mainly due to increases of 1,119
million yen in lease obligations, 1,796 million yen in accounts payable-other and 1,754 million yen in income
taxes payable, while there were decreases of 1,367 million yen in notes and accounts payable -trade and 2,552
million yen in short-term loans payable.
Non-current liabilities increased 1,946 million yen to 3,421 million yen. This was mainly due to an increase of
2,093 million yen in lease obligations.
Net assets
Net assets increased 4,081 million yen to 57,041 million yen. This was mainly due to an increase of 3,609
million yen in retained earnings.
(3) Cash flows
Cash and cash equivalents (hereinafter “net cash”) as of February 2 9, 2020 amounted to 26,377 million yen, or
7,729 million yen more than as of February 28, 2019.
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 20,850 million yen (an increase of 10,945 million yen,
compared with the previous fiscal year). The main positive factors include net income before income taxes of
9,923 million yen, depreciation of 7,599 million yen, impairment loss of 2,815 million yen and a decrease ininventories of 2,546 million yen. Main negative factors include a decrease in notes and accounts payable-trade of
1,973 million yen and income taxes paid of 2,880 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 6,645 million yen (a decrease of 2,040 million yen). This was mainly
due to the payments of 4,070 million yen for the purchase of property, plant and equipment and 3,284 million yen
for the purchase of intangible assets, while there were proceeds of 1,178 million yen from collection of leasehold
and guarantee deposits.
Cash flows from financing activities
Net cash used in financing activities totaled 6,439 million yen (an increase of 4,548 million yen). This was
mainly due to a decrease in short-term loans payable of 2,505 million yen, cash dividends paid of 2,620 million
yen and repayments of lease obligations of 1,309 million yen.
Reference: Cash flow indicators
FY2/18

FY2/19FY2/20Shareholders’ equity ratio (%)

56.0

58.0

58.3

Shareholders’ equity ratio based on market prices (%)

120.1

100.2

84.2

0.2

0.3

0.2

Interest-bearing debt to cash flow ratio

Interest coverage ratio (times)
421.6
195.8
200.8
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.
- 5 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

(4) Outlook
Until recently, earnings at companies in Japan were relatively firm because of demand associate d with consumer
spending and investments. However, consumer spending has become weak because of the dramatic downturn inglobal economic activity caused by the COVID-19 crisis and demand linked to this spending is unlikely torecover quickly. Most significantly, the customer traffic and the sales of the stores, are remaining low primarily
because of weak demand associated with foreign tourists in Japan, negative consumer sentiment as people stayhome for safety, and shorter store operating hours at retail facilities. Due to the numerous uncertainties about
how this crisis will affect results of operations, there is no forecast because we believe that it is not possible toestablish a reliable forecast for the fiscal year ending in February 2021 at thi s time. An announcement will bemade as soon as it becomes possible to determine a forecast.
From a medium to long-term perspective, there are expectations for a slow recovery in consumer spending
backed by monetary easing and economic stimulus measures of various countries as economic activity returns tonormal. However, there are concerns in Japan about the structural decline in demand and the worsening
environment for jobs and personal income. As a result, we believe that our business climate will remainchallenging.
In this difficult environment, we are determined to continue growing while using our business activities tocontribute to solving issues in society and the apparel industry in order to help create a sustainable society.
We are developing brands for older customer segments because of the ongoing change in Japan’s population. Our
objective is establishing ties with new categories of customers as we broaden our product lineup to cover more
sectors and make our merchandise even more competitive and appealing. Another goal is using digitaltechnologies, such as for omni-channel operations linking physical stores and e-commerce, for increasing
customer points of contact and providing services that enhance customer convenience.
In our overseas operations, we plan to create and implement regional growth strategies. The first goal isimproving the profitability of operations in Asia and advancing to a new stage of growth in this region.
We will also continue to seek new opportunities in growing market sectors outside the apparel category in orderto reflect the diversification of our customers’ life styles and changes in consumption patterns.
(5) Basic Policy on Profit Distribution, and Dividend Plans for the Current and Next Fiscal Years
Our policy for the distribution of profits is to make investments in businesses needed to create highly appealing
brands and supply merchandise that can further increase corporate value (shareholder value), which will lead tothe 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 stock as one way to return earnings to shareholders. Repurchases wi ll be determined in an
appropriate and timely manner while taking into account changes in our stock price, our financial position andother factors.
In accordance with our basic policy, the year-end dividend for the current fiscal year that ended on February 29,2020 is 25 yen per share as initially planned. The annual dividend for the current fiscal year is 50 yen per share,
which results in a consolidated payout ratio before goodwill amortization of 36.1%.
The dividend forecast for the next fiscal year ending on February 28, 2021 is undecided at this time and will be
disclosed promptly when earnings forecast is announced.
2. Basic Approach for the Selection of Accounting Standards
Adastria prepares its consolidated financial statements based on the genera lly accepted accounting principles inJapan to permit comparisons with prior years and with the financial data of other companies.
We will take suitable actions with regard to the application of International Financial Reporting Standards (IFRS)
by taking into account associated factors in Japan and other countries.

- 6 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Million yen)
FY2/20(As of Feb. 29, 2020)

FY2/19(As of Feb. 28, 2019)
AssetsCurrent assets
Cash and deposits

18,726

26,462

Notes and accounts receivable-trade

9,780

9,954

Inventories

17,592

15,008

Other

2,016

1,877

Allowance for doubtful accounts

(65)

(68)

48,05053,234

5,869

6,001

Accumulated depreciation(1,816)(2,063)

Buildings and structures, net

4,052

3,937

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

Store interior equipment

31,931

32,668

Accumulated depreciation(25,705)(27,318)

Store interior equipment, net

6,226

5,349

2,366

2,366

166

53

Land
Construction in progress
Other

1,488

5,828

(859)

(2,271)

629

3,557

13,44015,265

648

478

Other

5,241

5,799

Total intangible assets

5,889

6,278

828

242

Lease and guarantee deposits

16,947

15,959Deferred tax assets

6,264

6,960

136

252

Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill

Investments and other assets
Investment securities

Other
Allowance for doubtful accounts

(294)

(268)

Total investments and other assets

23,882

23,146

43,21344,68991,26397,924

Total non-current assets
Total assets- 7 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

(Million yen)
FY2/20(As of Feb. 29, 2020)

FY2/19(As of Feb. 28, 2019)
Liabilities
Current liabilities
Notes and accounts payable-trade

9,267

7,900

Electronically recorded obligations-operating

9,635

9,020

Short-term loans payable

2,552

-

Lease obligations

58

1,178

Accounts payable-other

9,703

11,500

Income taxes payable

1,376

3,130

Provision for bonuses

2,506

2,188

Provision for point card certificates

1,084

1,937

Other provision

361

279

Other

282

327

36,82937,46229

2,123

Total current liabilities
Non-current liabilities
Lease obligations
Deferred tax liabilities

66

78

Provision

314

396

Other

1,064

823

Total non-current liabilities

1,474

3,421

38,30340,883

Capital stock

2,660

2,660

Capital surplus

7,227

7,213

Retained earnings

47,46951,079Treasury shares(4,575)(4,372)

Total shareholders’ equity

52,781

56,580

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

(7)

(0)

(8)

6

Foreign currency translation adjustment

193

454

Total liabilities
Net assets
Shareholders’ equity

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

- 8 -

177

461

52,95957,041

91,26397,924

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)(Million yen)
FY2/20(Mar. 1, 2019 – Feb. 29, 2020)

Net sales

222,664

222,376

Cost of sales

102,643

98,993Gross profit

120,021

123,383

8,176

8,104

14

(22)

Selling, general and administrative expenses
Advertising expenses
Provision of allowance for doubtful accounts
Remuneration for directors (and other officers)

430

394

Salaries and bonuses

31,246

31,388Provision for bonuses

2,505

2,151

Welfare expenses

5,018

5,197

Rents

37,12634,334

Lease payments

449

451

Depreciation

6,820

7,304

Amortization of goodwill

1,306

167

Other

19,73721,025

Total selling, general and administrative expenses

112,831

110,497

7,190

12,885Interest income

766

Dividend income

2223

Gain on valuation of derivatives-

59

House rent income

80-

Income from contribution to facilities

56

50

Subsidy income

58

70

Revenue from electric power sales

40

37

Proceeds from sample sales

46

68

Other

160

184

Total non-operating income

473

561

Interest expenses

50

140

Foreign exchange losses

121

376

Loss on valuation of derivatives

44-

Cost of lease revenue

72

-

Other

27

86

Operating profit
Non-operating income

Non-operating expenses

Total non-operating expenses

317

602

7,345

12,843Gain on sales of investment securities

201-

Total extraordinary income

201-

Impairment loss

985

2,815

Loss on disaster-

28

Loss on sales of investment securities

-

75

985

2,920

Ordinary profit
Extraordinary income

Extraordinary losses

Total extraordinary losses- 9 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

FY2/19(Mar. 1, 2018 – Feb. 28, 2019)(Million yen)
FY2/20(Mar. 1, 2019 – Feb. 29, 2020)

Net income before income taxes

6,562

9,923

Income taxes-current

3,482

4,250

Income taxes-deferred

(810)

(690)

Total income taxes

2,672

3,560

Net income

3,890

6,363

Net income attributable to owners of the parent

3,890

6,363

- 10 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

Consolidated Statement of Comprehensive Income
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)(Million yen)
FY2/20(Mar. 1, 2019 – Feb. 29, 2020)

Net income

3,890

6,363

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

(242)

7

67

15

Foreign currency translation adjustment

(197)

261

Total other comprehensive income

(372)

283

3,517

6,646

3,517

6,646

-

-

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests- 11 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

(3) Consolidated Statement of Changes in Equity
FY2/19 (Mar. 1, 2018 – Feb. 28, 2019)(Million yen)
Shareholders’ equity

Balance at beginning of current
periodCapital stock

Capital surplus

2,660

7,227

Retainedearnings

Treasury shares

Total shareholders’equity(4,652)50,48045,245

Changes of items during period
Dividends of surplus
Net income attributable toowners of the parent(1,665)(1,665)

3,890

3,890

Purchase of treasury shares
Disposal of treasury shares bystock ownership plan trust
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

(2)

(2)

79

79
-

-

-

2,224

76

2,301

2,660

7,227

47,469(4,575)52,781(Million yen)

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of current
periodTotal
Deferred gains Foreign currency accumulated
or losses ontranslation
otherhedgesadjustment
comprehensive
income

235

(76)

391

Total net assets

550

51,030

Dividends of surplus-(1,665)

Net income attributable toowners of the parent

-

3,890

Purchase of treasury shares

-

(2)

-

79

Changes of items during period

Disposal of treasury shares bystock ownership plan trust
Net changes of items other thanshareholders’ equity
Total changes of items during
period

(242)

67

(197)

(372)

(372)

(242)

67

(197)

(372)

1,928

Balance at end of current period

(7)

(8)

193

177

52,959- 12 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

FY2/20 (Mar. 1, 2019 – Feb. 29, 2020)(Million yen)
Shareholders’ equity
Retained
Total shareholders’Capital surplus
Treasury sharesearnings
equityCapital stock
Balance at beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance

2,660

7,227

47,469(4,575)

(134)
2,660

7,227

47,33552,781(134)(4,575)52,647

Changes of items during period
Dividends of surplus
Net income attributable toowners of the parent(2,619)(2,619)

6,363

6,363

Purchase of treasury shares

(3)

(3)

Disposal of treasury shares

0

0

(131)

(131)

192

192

145

131

Purchase of treasury shares bystock ownership plan trust
Disposal of treasury shares bystock ownership plan trust
Transfer of treasury shares tostock ownership plan trust
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

(14)

-

(14)

3,743

202

3,932

2,660

7,213

51,079(4,372)56,580(Million yen)

Accumulated other comprehensive income
Total
Deferred gains Foreign currency accumulated
or losses ontranslation
otherhedgesadjustment
comprehensive
incomeValuationdifference on
available-forsale securities
Balance at beginning of current
periodCumulative effects of changes
in accounting policies

177

52,959

-

(134)

177

52,825

Dividends of surplus-(2,619)Net income attributable toowners of the parent

-

6,363

Purchase of treasury shares-(3)

Disposal of treasury shares

-

0

-

(131)

-

192

-

131

Restated balance

(7)

(8)

(7)

(8)

193

Total net assets

193

Changes of items during period

Purchase of treasury shares bystock ownership plan trust
Disposal of treasury shares bystock ownership plan trust
Transfer of treasury shares tostock ownership plan trust
Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

7

15

261

283

283

7

15

261

283

4,216

(0)

6

454

461

57,041- 13 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

(4) Consolidated Statement of Cash Flows
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)(Million yen)
FY2/20(Mar. 1, 2019 – Feb. 29, 2020)

Net income before income taxes

6,562

9,923

Depreciation

7,020

7,599

Impairment loss

985

2,815

Cash flows from operating activities

Loss on disaster-

28

Amortization of goodwill

1,306

167

Interest and dividend income

(30)

(89)

50

140

Interest expenses
Increase (decrease) in allowance for doubtful accounts

(35)

(22)

Increase (decrease) in provision for bonuses

94

(317)

Increase (decrease) in provision for point card certificates
Increase (decrease) in provision for loss on businessliquidation
Loss (gain) on sales of investment securities

385

852

(1,141)

-

(201)

75

Decrease (increase) in notes and accounts receivable-trade(1,018)

(164)

417

2,546

(1,200)(1,973)

Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accounts payable-other

112

302

Increase (decrease) in accrued consumption taxes

429

1,374

Other, net

(663)

545

Subtotal

13,07323,804

Interest and dividend income received

30

31

(50)

(103)

(3,147)(2,880)9,904

20,850Purchase of property, plant and equipment(7,407)(4,070)Purchase of intangible assets(2,150)(3,284)

Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities

Purchase of investment securities

(1)

(1)

Proceeds from sales of investment securities

230

498

Payments for leasehold and guarantee deposits
Proceeds from collection of leasehold and guarantee
deposits
Other, net

(706)

(801)

1,372

1,178

(24)

(164)

Net cash provided by (used in) investing activities(8,686)(6,645)(52)(2,505)(1,665)(2,620)Cash flows from financing activities
Increase (decrease) in short-term loans payable
Cash dividends paid
Purchase of treasury shares
Repayments of lease obligations
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

(2)

(7)

(170)

(1,309)-3(1,890)(6,439)

(61)

(35)

Net increase (decrease) in cash and cash equivalents

(733)

7,729

Cash and cash equivalents at beginning of period

19,381

18,647

Cash and cash equivalents at end of period

18,647

26,377- 14 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2020 Fiscal Year

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Changes in Accounting Policies
Application of IFRS 16 “Leases”
Starting with the current fiscal year, some consolidated subsidiaries are using IFRS 16. To begin applying thisstandard, Adastria is using the approved transitional treatment of r ecognizing the cumulative effect of applying
this standard on the first day that this standard was applied. Consequently, there were adjustments to retained
earnings, right-of-use assets and lease liabilities at the beginning of the current fiscal year. The effect of thischange on profit or loss in the current fiscal year is insignificant.
Reclassifications
Application of the “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.
Starting with the beginning of the current fiscal year, Adastria is applying “Partial Amendments to AccountingStandard for Tax Effect Accounting” (ASBJ No. 28, February 16, 2018) and other related pronouncements.
Accordingly, deferred tax assets and deferred tax liabilities have been presented in the investme nts and otherassets section and the non-current liabilities section of the balance sheet, respectively.
Segment Information
The Adastria Group has only a single business segment, which is the planning and sales of clothing and related
merchandise. There is no others segment because the levels of sales and earnings of other activities are
insignificant.
Per Share Information

Net assets per share

FY2/19(Mar. 1, 2018 – Feb. 28, 2019)
1,125.29(Yen)
FY2/20(Mar. 1, 2019 – Feb. 29, 2020)
1,210.55

Net income per share
82.67
135.08Notes: 1. Diluted net income per share is not presented since Adastria has no outstanding dilutive securities.
2. The Adastria stock held by the trust account recorded as treasury shares under shareholders’ equity is included intreasury shares deducted from the number of shares that is used to calculate the average number of shares
outstanding during the period for the determination of net income per share, and is included in treasury shares that isdeducted from the number of shares outstanding at the end of the period for the determination of net assets per share.
For the determination of net income per share, the average numbers of treasury shares outstanding that werededucted were 536,000 for FY2/19 and 520,000 for FY2/20. For the determination of net assets per share, thenumbers of treasury shares deducted were 531,000 for FY2/19 and 534,000 for FY2/20.
3. The basis of calculating the net income per share is as follows.

Net income attributable to owners of the parent

FY2/19(Mar. 1, 2018 – Feb. 28, 2019)
3,890(Million yen)
FY2/20(Mar. 1, 2019 – Feb. 29, 2020)
6,363

-

-

3,890

6,363

47,05847,107

Amount not available to common stockholders
Net income attributable to owners of the parent
applicable to common shares
Average number of common shares outstanding
during the period (Thousand shares)

Subsequent Events
Not applicable.
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.
- 15 -