Summary of Consolidated Financial Results for the Fiscal Year Ended February 28, 2019

[Japanese GAAP]
April 4, 2019

Company name: Adastria Co., Ltd.
Listing: TSE 1st section
Stock code:
2685
URL: http://www.adastria.co.jp
Representative: Michio Fukuda, Chairman of the Board
Kazushi Sekimori,Contact:
Deputy Executive General Manager, General Headquarters of Management Tel: +81-3-5466-2060
Scheduled date of Annual General Meeting of Shareholders:
May 23, 2019
Scheduled date of payment of dividend:
May 9, 2019
Scheduled date of filing of Annual Securities Report:
May 24, 2019
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 4, 2019 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, 2019
(March 1, 2018 – February 28, 2019)(1) Consolidated results of operations(Percentages shown for net sales and incomes represent year-on-year changes)
Net income
attributable to owners
Net sales
Operating profit
Ordinary profitof the parent

Million yen

Fiscal year ended Feb. 28, 2019
Fiscal year ended Feb. 28, 2018%

222,664
222,787

Note: Comprehensive income

(0.1)
9.4

Million yen

Fiscal year ended Feb. 28, 2019:
Fiscal year ended Feb. 28, 2018:

7,190
5,005

%

3,517 million yen(1,966) million yen

Net income per
Diluted net
share
income per share
Yen

Fiscal year ended Feb. 28, 2019
Fiscal year ended Feb. 28, 2018

Yen

82.67
18.36

Reference: Equity in earnings of affiliates

Million yen

43.7(66.4)

ROE
%

-

%

7,345
5,428

Million yen

35.3(64.1)

(-%)
(-%)

%

3,890
863

350.3
(92.5)

Ratio of ordinary
income to total assets

Ratio of operating
income to net sales

8.1
6.0

3.2
2.2

%

7.5
1.6

%

Fiscal year ended Feb. 28, 2019:- million yen
Fiscal year ended Feb. 28, 2018:(66) million yen
EBITDA
Fiscal year ended Feb. 28, 2019:15,317 million yen (up 1.2%)
Fiscal year ended Feb. 28, 2018:15,141 million yen (down 34.2%)
EPS before goodwill amortization
Fiscal year ended Feb. 28, 2019:110.42 yen (down 6.9%)
Fiscal year ended Feb. 28, 2018:118.54 yen (down 58.9%)(*) For more details regarding definition, computational method and other matters of these indices, please refer to the section“Results of Operations” on page 2.

(2) Consolidated financial position
Total assets
As of Feb. 28, 2019
As of Feb. 28, 2018

Reference: Shareholders’ equity

Net assets

Million yen

Million yen

As of Feb. 28, 2019:

52,959 million yen

91,285
91,123Equity ratio%

52,95951,030

As of Feb. 28, 2018:

Net assets per share(3) Consolidated cash flow position

Fiscal year ended Feb. 28, 2019
Fiscal year ended Feb. 28, 2018

Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Million yen

Million yen

Million yen

9,904
10,685(8,686)(7,404)

Yen

58.0
56.0

1,125.29
1,084.84

51,030 million yen

Cash and cash
equivalents at end of theperiodMillion yen(1,890)(4,629)18,647
19,381

2. Dividends
Dividend per share
1Q-endFiscal year ended Feb. 28, 2018
Fiscal year ended Feb. 28, 2019
Fiscal year ending Feb. 29, 2020
(forecast)

Yen

2Q-end3Q-end Year-end

Yen

-

35.00
20.00

-

25.00

Yen

Yen

Total

Total
dividends

Yen

Million yen

-

15.00
30.00

50.00
50.00

-

25.00

50.00

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

2,379
2,379

%

272.3
60.5

%

4.4
4.5

39.2

3. Consolidated Forecast for the Fiscal Year Ending February 29, 2020 (March 1, 2019 – February 29, 2020)
Net sales
Full year

Million yen

225,000

Operating profit%

1.0

Million yen

10,000

Reference: EBITDA
EPS before goodwill amortization

%

39.1

Ordinary profit
Million yen

10,000%36.1(Percentages represent year-on-year changes)
Net income attributable to Net income perowners of the parent
shareMillion yen

Fiscal year ending Feb. 29, 2020 (forecast):
Fiscal year ending Feb. 29, 2020 (forecast):

6,000

%

54.2

Yen

127.4916,520 million yen (up 7.9%)130.04 yen (up 17.8%)

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
Newly added: -Excluded: -(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 the end of the period (including treasury shares)
As of Feb. 28, 2019:
48,800,000 shares
As of Feb. 28, 2018:

48,800,000 shares

2) Number of treasury shares at the end of the period
As of Feb. 28, 2019:
1,736,973 shares

As of Feb. 28, 2018:

1,759,875 shares

3) Average number of shares outstanding during the period
Fiscal year ended Feb. 28, 2019:47,058,592 sharesFiscal year ended Feb. 28, 2018:

47,041,347 shares

Reference: Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2019
(March 1, 2018 – February 28, 2019)(1) Non-consolidated results of operations
Net sales
Fiscal year ended Feb. 28, 2019
Fiscal year ended Feb. 28, 2018

Fiscal year ended Feb. 28, 2019
Fiscal year ended Feb. 28, 2018

Million yen

195,427
200,206

%

(2.4)
2.9

Reference: Shareholders’ equity

Million yen

%

7,442
6,432

15.7
(55.2)(Percentages represent year-on-year changes)
Ordinary profit
Net income

Million yen

7,280
6,176

Net income per share

Diluted net income per share

44.18
14.20

-

Yen

(2) Non-consolidated financial position
Total assets
As of Feb. 28, 2019
As of Feb. 28, 2018

Operating profit

Million yen

80,49080,969As of Feb. 28, 2019:

Yen

Net assets

Million yen

46,96847,66046,968 million yen%

17.9(57.5)

Equity ratio%

Million yen

2,078
668

%

211.1
(93.8)Net assets per share
58.4
58.9

As of Feb. 28, 2018:

Yen

998.001,013.19

47,660 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 the Company 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 2019 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

16

Going Concern Assumption

16

Segment Information

16

Per Share Information

16

Subsequent Events

16

4. Other Information

17(1) Changes in Directors

17

- 1 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

1. Overview of Results of Operations(1) Results of Operations
Consolidated results(Million yen)
FY2/18
FY2/19(Mar. 1, 2017 – Feb. 28, 2018) (Mar. 1, 2018 – Feb. 28, 2019)

Net sales

222,787

222,664

YoY change(Amount)(123)

YoY change
(%)
(0.1)

Operating profit

5,005

7,190

2,184

43.7

Ordinary profit

5,428

7,345

1,916

35.3

863

3,890

3,026

350.3

EBITDA

15,141

15,317175

1.2

EPS before goodwill
amortization (Yen)

118.54110.42(8.12)(6.9)

Net income attributableto owners of the parent

Consolidated net sales decreased 0.1% year-on-year to 222,664 million yen, operating profit increased 43.7% to
7,190 million yen, ordinary profit increased 35.3% to 7,345 million yen, and net income attributable to owners of
the parent increased 350.3% to 3,890 million yen.
Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 1.2% to 15,317 million yen
and earnings per share (EPS) before goodwill amortization fell 6.9% to 110.42 yen. (*)
Sales in Japan were about the same as in the previous fiscal year despite lackluster sales of summer merchandisein April and May. Sales subsequently recovered due to the success of several measures that included conducting
summer discount sales and the launch of late-summer merchandise earlier than initially planned and upgrading
the environment for decision-making and information sharing in order to strengthen the lineup of merchandise.
As a result, a recovery in sales that generally continued through the remainder of the fiscal year started in June.
Sales of the niko and … brand were strong throughout the fiscal year and there was a recovery in sales of the
GLOBAL WORK and LOWRYS FARM brands during the fall and winter apparel selling season. These three core
brands were major contributors to consolidated sales during the fiscal year.
Overseas sales increased 4.8%. Sales in Asia were lower, due to the negative impact of ongoing businessrestructuring activities in Hong Kong and China, despite the higher sales in Taiwan and South Korea. Overseas
sales increased mainly because of the contribution to sales of Velvet, LLC, a U.S. company that was consolidated
in the previous fiscal year. (Please refer to the section “Supplementary Information, (1) Sales for Brands andRegions” for further information.)
We opened 91 stores (including 11 overseas) and closed 167 stores (including 53 overseas), resulting in a total
network of 1,427 stores (including 85 overseas) at the end of fiscal year. In Hong Kong and China, unprofitable
stores were closed in accordance with the business revitalization policy established in the previous fiscal year.
(Please refer to the section “Supplementary Information, (3) Number of Stores” for further information.)
The gross profit margin decreased 0.3 percentage points from one year earlier to 53.9%. The main cause was salesof merchandise at discounted prices in response to slow sales of summer merchandise as was explained earlier.
The ratio of selling, general and administrative (SG&A) expenses to sales decreased 1.3 percentage point to50.7%, resulting in a 1.0 percentage point increase in the operating margin to 3.2%. SG&A expenses were 2,959
million yen less than one year earlier. One reason was one-time expenses in the previous fiscal year for relocating
the head office. The completion at the end of the fiscal year’s first half of amortization of goodwill resulting fromthe consolidation of TRINITY ARTS (subsequently absorbed by Adastria) also reduced SG&A expenses.
There were extraordinary income of 201 million yen for gain on sales of investment securities and extraordinary
losses of 985 million yen for the impairment of store assets.

- 2 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 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
FY2/19YoY change (%)
Sales (million yen)
Composition (%)
GLOBAL WORK
40,87118.4
1.8
niko and ...
30,956
13.9
9.0
STUDIO CLIP
23,641
10.6(2.8)
LOWRYS FARM
22,491
10.1(7.9)
LEPSIM
14,806
6.7(3.3)
JEANASIS
12,3735.6
0.1
BAYFLOW
8,783
3.9
11.1
RAGEBLUE
7,823
3.5(12.1)
Others (Notes 3 and 4)
30,587
13.7(17.1)
Total (Adastria)
192,336
86.4(3.2)
BUZZWIT Co., Ltd. (Note 3)
5,805
2.6
(39.1)ELEMENT RULE Co., Ltd. (Note 4)
9,239
4.1
Other consolidated subsidiaries
30.0
Total (Japan)
207,38593.1(0.4)
Hong Kong
5,300
2.4(15.3)
China
1,416
0.6
(28.9)
Taiwan
2,413
1.1
28.0
South Korea
1,207
0.6
26.3
USA (Note 5)
4,940
2.2
41.3
Total (Overseas)
15,2796.9
4.8
Total (Group)
222,664100.0(0.1)
Notes: 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. On August 1, 2018, Adastria conducted an absorption-type split where three business units including the
PAGEBOY business unit of ALICIA CO., LTD. were divested and then transferred to Adastria. On the same day,
ALICIA CO., LTD changed its name to BUZZWIT Co., Ltd.
4. On March 1, 2018, Adastria conducted an absorption-type split where the BARNYARDSTORM and BABYLONE
business units of Adastria were divested and then transferred to consolidated subsidiary ELEMENT RULE Co., Ltd.
5. As Velvet, LLC (USA) became a consolidated subsidiary at the end of the first quarter of FY2/18, the YoY change
for USA sales is the comparison of the last three quarters of FY2/18 and all four quarters of FY2/19.
Brand / region(2) Sales for Merchandise Categories
FY2/19Category

YoY change (%)
Sales (million yen)
Composition (%)
Men’s apparel (bottoms, tops)
31,726
14.2
1.3
Women’s apparel (bottoms, tops)
147,313
66.2
0.9
Others43,624
19.6
(4.1)
Total
222,664100.0(0.1)
Notes: 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 subsidiaries.
- 3 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(3) Number of Stores
Number of stores
FY2/19As of theAbsorptionend of
Increasetype split
Opened Changed
ClosedFY2/19/decrease(Notes 3 and 4)
GLOBAL WORK
210
8
(5)
3
213
niko and ...
132
9
(2)
7
139
STUDIO CLIP
195
3
(8)
(5)
190
LOWRYS FARM
149
3
(13)
(10)
139
LEPSIM
138
2
(8)
(6)
132
JEANASIS
76
1
(4)
(3)
73
BAYFLOW
39
101049
RAGEBLUE
57
4
(3)
1
58
Others (Notes 3 and 4)
279
14
26
(1)
(49)
(10)
269
Total (Adastria)
1,275
14
66
(1)
(92)
(13)
1,262
BUZZWIT Co., Ltd. (Note 3)
100
(82)
4
2
(19)
(95)
5
ELEMENT RULE Co., Ltd. (Note 4)
68
10
(3)
75
75
Total (Japan)
1,375
80
1
(114)
(33)
1,342
Hong Kong
24
3
(7)
(4)
20
China
49
1
(40)
(39)
10
Taiwan
31
7
(4)
3
34
South Korea
11
1
1
12
USA
11
(2)
(2)
9
Total (Overseas)
126
11
1
(53)
(41)
85
Total (Group)
1,501
91
2
(167)
(74)
1,427
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.
3. On August 1, 2018, Adastria conducted an absorption-type split where three business units including the
PAGEBOY business unit of ALICIA CO., LTD. were divested and then transferred to Adastria. On the same day,
ALICIA CO., LTD changed its name to BUZZWIT Co., Ltd.
4. On March 1, 2018, Adastria conducted an absorption-type split where the BARNYARDSTORM and BABYLONE
business units of Adastria were divested and then transferred to consolidated subsidiary ELEMENT RULE Co., Ltd.
Brand / region

As of theend of
FY2/18(2) Financial Position
AssetsTotal assets increased 331 million yen from as of February 28, 2018 to 50,116 million yen as of February 28,
2019. This was mainly due to increases in notes and accounts receivable-trade of 969 million yen and other(accounts receivable-other, etc.) of 401 million yen, while there were decreases in cash and deposits of 719
million yen and inventories of 481 million yen.
Non-current assets decreased 168 million yen to 41,169 million yen. This was mainly due to decreases ingoodwill of 1,310 million yen and lease and guarantee deposits of 1,316 million yen, while there was an increaseof 2,233 million yen in buildings and structures, net, which was mostly attributable to the completion of the
expansion of the Ibaraki Nishi Distribution Center.
Liabilities
Liabilities decreased 1,617 million yen to 36,829 million yen. This was mainly due to decreases in notes andaccounts payable-trade of 959 million yen, and provision for loss on business liquidation of 1,141 million yen.
Non-current liabilities decreased 148 million yen to 1,496 million yen. This was mainly due to a decrease in other(lease obligations, etc.) of 187 million yen.
Net assets
Net assets increased 1,928 million yen to 52,959 million yen. This was mainly due to an increase in retained
earnings of 2,224 million yen.
- 4 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(3) Cash flows
Cash and cash equivalents (hereinafter “net cash”) as of February 28, 2019 amounted to 18,647 million yen, or
733 million yen less than as of February 28, 2018.
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 9,904 million yen (a decrease of 781 million yen, compared withthe previous fiscal year). The main positive factors include net income before income taxes of 6,562 million yen,depreciation of 7,020 million yen and amortization of goodwill of 1,306 million yen. Main negative factors
include an increase in notes and accounts receivable-trade of 1,018 million yen, a decrease in notes and accounts
payable-trade of 1,200 million yen and income taxes paid of 3,147 million yen.
Cash flows from investing activities
Net cash used in investing activities totaled 8,686 million yen (an increase of 1,281 million yen). This was mainly
due to the payments of 7,407 million yen for the purchase of property, plant and equipment and 2,150 million yen
for the purchase of intangible assets, while there was proceeds of 1,372 million yen from collection of lease andguarantee deposits.
Cash flows from financing activities
Net cash used in financing activities totaled 1,890 million yen (a decrease of 2,738 million yen). This was mainly
due to cash dividends paid of 1,665 million yen.
Reference: Cash flow indicators
FY2/17

FY2/18

FY2/19

Shareholders’ equity ratio (%)

62.0

56.0

58.0

Shareholders’ equity ratio based on market prices (%)

151.4

120.1

100.2

0.2

0.2

0.3

1,034.7

421.6

195.8

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.

- 5 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(4) Outlook
Earnings at companies in Japan are relatively firm because of the strength of demand associated with investments
and consumer spending. However, a structural decline in demand and a severe labor shortage are having anegative effect on the Japanese economy. Furthermore, slowing global economic growth, U.S.-China trade
friction, problems involving Brexit and other sources of concern are creating uncertainty about the economic
outlook.
Some business sectors in Japan are likely to benefit from the consistently high level of spending by wealthypeople and the outlook for firm demand linked to the purchases of foreign tourists in Japan. However, the numberof retail tenants, chiefly in the apparel category, is facing strong competition from e-commerce malls. We also
foresee an increase in operating expenses for a number of reasons, including higher salaries for employees. As aresult, we believe that our business environment will remain challenging.
We are dedicated to playing a role in enabling people to make fashion part of their enjoyment of life and making
it possible to meet a broad spectrum of individual needs and preferences. We want to use our business activities tohelp solve issues in society and the apparel industry as we also make contributions to creating a sustainable
society.
Improving inventory turnover, lowering the discounting ratio and reducing the amount of inventory items that are
discarded are priorities of ours. We plan to accomplish these goals by further differentiating our brands, chiefly
the core brands, and making our merchandise even more competitive and appealing. We also plan to build aframework for supplying merchandise that customers want at the right times, prices and volumes. Another goal isusing digital technologies for omni-services and other activities that increase customer points of contact andconvenience for our stores and e-commerce operations. In our overseas operations, our goal in Asia is to use
restructuring measures to become more profitable and advance to a new stage of growth. We will also continue toseek opportunities outside the apparel category to start business activities in growing market sectors.
For the fiscal year ending on February 29, 2020, we forecast a 1.0% increase in consolidated net sales to 225
billion yen, a 3.3% increase in gross profit to 124 billion yen, a 39.1% increase in operating profit to 10 billion
yen, a 36.1% increase in ordinary profit to 10 billion yen and a 54.2% increase in net income attributable toowners of the parent to 6 billion yen.
This forecast assumes that non-consolidated existing store sales will increase 1.3%. There will be 69 new stores(including 13 overseas) and 46 store closings (including 4 overseas) on a consolidated basis.
(5) Basic Policy on Profit Distribution, and Dividend Plans
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 will be determined in an
appropriate and timely manner while taking into account changes in our stock price, our financial position andother factors.
Although earnings in the fiscal year that ended on February 28, 2019 were below our initial forecast, in the lightof dividend stability, there is no change in our plan to pay a year-end dividend of 30 yen per share, which will
result in an annual dividend of 50 yen.
For the fiscal year ending on February 29, 2020, in accordance with our basic policy, we plan to pay an annual
dividend of 50 yen, which is the same as the dividend for the previous fiscal year.
2. Basic Approach for the Selection of Accounting Standards
Adastria prepares its consolidated financial statements based on the generally 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 2019 Fiscal Year

3. Consolidated Financial Statements and Notes(1) Consolidated Balance Sheet(Million yen)
FY2/19(As of Feb. 28, 2019)

FY2/18(As of Feb. 28, 2018)
AssetsCurrent assets
Cash and deposits

19,446

18,726

Notes and accounts receivable-trade

8,810

9,780

Inventories

18,073

17,592

Deferred tax assets

1,955

2,066

Other

1,615

2,016

Allowance for doubtful accounts

(116)

(65)

Total current assets

49,785

50,116

3,491

5,869

(1,673)(1,816)

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net

1,818

4,052

32,29331,931

Accumulated depreciation(24,991)(25,705)

Store interior equipment, net

7,301

6,226

2,358

2,366

Store interior equipment

Land
Construction in progress

187

166

1,483

1,488

(825)

(859)

658

629

12,324

13,440Goodwill

1,959

648

Other

4,255

5,241

Total intangible assets

6,214

5,889

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

Investments and other assets
Investment securities

1,101

828

Lease and guarantee deposits

18,263

16,947

Deferred tax assets

3,573

4,220

138

136

Allowance for doubtful accounts

(278)

(294)

Total investments and other assets

22,79921,83841,33841,16991,12391,285

Other

Total non-current assets
Total assets- 7 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(Million yen)
FY2/19(As of Feb. 28, 2019)

FY2/18(As of Feb. 28, 2018)
Liabilities
Current liabilities
Notes and accounts payable-trade

10,227

9,267

Electronically recorded obligations-operating

9,898

9,635

Short-term loans payable

2,657

2,552

Accounts payable-other

9,418

9,703

Income taxes payable

1,322

1,376

Provision for bonuses

2,413

2,506

698

1,084

1,141

-

Provision for point card certificates
Provision for loss on business liquidation
Other provision

140

361

Other

527

340

38,44636,829112

88

Total current liabilities
Non-current liabilities
Deferred tax liabilities

251

314

Other

Provision

1,281

1,094

Total non-current liabilities

1,645

1,496

40,09238,326

2,660

2,660

Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus

7,227

7,227

Retained earnings

45,24547,469Treasury shares(4,652)(4,575)

Total shareholders’ equity

50,48052,781235(7)

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

(76)

(8)

Foreign currency translation adjustment

391

193

Total accumulated other comprehensive income

550

177

Total net assets
Total liabilities and net assets- 8 -51,03052,95991,12391,285

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statement of Income
FY2/18(Mar. 1, 2017 – Feb. 28, 2018)(Million yen)
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

Net sales
Cost of sales

222,787
101,992

222,664
102,643

Gross profit

120,795

120,021

Selling, general and administrative expenses
Advertising expenses
Provision of allowance for doubtful accounts
Directors’ compensations
Salaries and bonuses
Provision for bonuses
Welfare expenses
Rents
Lease payments
Depreciation
Amortization of goodwill
Other

7,728
21
494
30,1982,412
5,240
38,290
438
7,488
2,648
20,828

8,176
14
430
31,2462,505
5,018
37,126
449
6,820
1,306
19,737

115,790

112,831

5,005

7,190

4
56
72
108
50
36
39
39
263

7
22
80
56
48
58
40
158

671

473

25

50

66

-

32
93
29

121
44
72
27

247

317

Ordinary profit

5,428

7,345

Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Subsidy income

25
4,373
169

201
-

4,567

201

2,799
652
129
1,141
169

985
-

4,892

985

Total selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Foreign exchange gains
House rent income
Income from contribution to facilities
Received incentive
Subsidy income
Revenue from electric power sales
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Loss on valuation of derivatives
Cost of lease revenue
Other
Total non-operating expenses

Total extraordinary income
Extraordinary losses
Impairment loss
Loss on valuation of investment securities
Loss on sales of shares of subsidiaries and associates
Provision for loss on business liquidation
Loss on reduction of non-current assets
Total extraordinary losses- 9 -Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

FY2/18(Mar. 1, 2017 – Feb. 28, 2018)(Million yen)
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

Net income before income taxes

5,104

6,562

Income taxes-current
Income taxes-deferred

4,527
(287)

3,482
(810)

Total income taxes

4,240

2,672

Net income

863

3,890

Net income attributable to owners of the parent

863

3,890

- 10 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

Consolidated Statement of Comprehensive Income
FY2/18(Mar. 1, 2017 – Feb. 28, 2018)(Million yen)
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

863

3,890

(2,954)(242)

Net income
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of
the parent
Comprehensive income attributable tonon-controlling interests- 11 -

(56)

67

181

(197)

(2,830)(372)(1,966)

3,517(1,966)

3,517

-

-

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(3) Consolidated Statement of Changes in Equity
FY2/18 (Mar. 1, 2017 – Feb. 28, 2018)(Million yen)
Shareholders’ equity

Balance at beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Capital stock

Capital surplus

2,660

7,227

Retainedearnings

Treasury shares

Total shareholders’equity(4,645)52,65447,413
538

2,660

7,227

47,951538(4,645)53,193

Changes of items during period
Dividends of surplus
Net income attributable toowners of the parent(3,569)(3,569)863

863

Purchase of treasury shares(6)

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period

(6)
-

-

-

(2,706)(6)(2,712)

2,660

7,227

45,245(4,652)50,480(Million yen)

Accumulated other comprehensive income
Valuationdifference on
available-forsale securities
Balance at beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance

Total
Foreign currency accumulated
Deferred gains orothertranslation
losses on hedges
comprehensive
adjustment
income

3,190

(19)

209

3,380

Total net assets

56,035
538

3,190

(19)

209

3,380

56,573

Dividends of surplus-(3,569)Net income attributable toowners of the parent-

863

Purchase of treasury shares-(6)

Changes of items during period

Net changes of items other thanshareholders’ equity
Total changes of items during
periodBalance at end of current period(2,954)(56)

181(2,830)(2,830)(2,954)(56)

181(2,830)(5,542)

235

(76)

391

550

51,030- 12 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

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
Foreign currency accumulated
Deferred gains orothertranslation
losses on hedges
comprehensive
adjustment
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- 13 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(4) Consolidated Statement of Cash Flows
FY2/18(Mar. 1, 2017 – Feb. 28, 2018)(Million yen)
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

Net income before income taxes

5,104

6,562

Depreciation

7,744

7,020

Impairment loss

2,799

985

Amortization of goodwill

2,648

1,306

Interest and dividend income

(60)

(30)

25

50

Cash flows from operating activities

Interest expenses
Increase (decrease) in allowance for doubtful accounts

11

(35)

Increase (decrease) in provision for bonuses

127

94

Increase (decrease) in provision for point card certificates
Increase (decrease) in provision for loss on businessliquidation
Loss (gain) on sales of non-current assets
Loss (gain) on sales of shares of subsidiaries andassociates
Loss (gain) on sales of investment securities

311

385

1,141

(1,141)

(25)

-

129

-

(4,373)

(201)

652

-

66

-

(169)

-

169

-

Decrease (increase) in notes and accounts receivable-trade180(1,018)Decrease (increase) in inventories

(113)

417

Increase (decrease) in notes and accounts payable-trade

2,760(1,200)Loss (gain) on valuation of investment securities
Share of loss (profit) of entities accounted for using equity
methodSubsidy income
Loss on reduction of non-current assets

Increase (decrease) in accounts payable-other

280

112

Increase (decrease) in accrued consumption taxes

(421)

429

Other, net

(444)

(663)

Subtotal

18,546

13,07360

30Interest and dividend income received
Interest expenses paid

(25)

(50)

Income taxes paid

(7,895)(3,147)

Net cash provided by (used in) operating activities

10,685

9,904(7,797)(7,407)105-(2,965)(2,150)(58)(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

5,082

230

Payments for lease and guarantee deposits(2,041)

(706)

1,963

1,372

(3,713)

-

854

-

1,023

-

Proceeds from collection of lease and guarantee deposits
Purchase of shares of subsidiaries resulting in change inscope of consolidation
Proceeds from sales of shares of subsidiaries andassociates
Proceeds from acquisition of business
Proceeds from subsidy income

169-

Other, net

(26)

(24)

(7,404)(8,686)

Net cash provided by (used in) investing activities- 14 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

FY2/18(Mar. 1, 2017 – Feb. 28, 2018)(Million yen)
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

(139)

(52)

Cash flows from financing activities
Increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Cash dividends paid
Purchase of treasury shares
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalent

(725)

-

(3,568)(1,665)

(6)

(2)

(189)

(170)

(4,629)(1,890)22(61)

Net increase (decrease) in cash and cash equivalents(1,325)(733)

Cash and cash equivalents at beginning of period

20,706

19,381

Cash and cash equivalents at end of period

19,381

18,647- 15 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

(5) Notes to Consolidated Financial Statements
Going Concern Assumption
Not applicable.
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
FY2/18(Mar. 1, 2017 – Feb. 28, 2018)(Yen)
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

Net assets per share

1,084.84

1,125.29

Net income per share

18.36

82.67

Notes: 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 thatis deducted 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 555,000 for FY2/18 and 536,000 for FY2/19. For the determination of net assets per share, thenumbers of treasury shares deducted were 555,000 for FY2/18 and 531,000 for FY2/19.
3. The basis of calculating the net income per share is as follows.
FY2/18(Mar. 1, 2017 – Feb. 28, 2018)(Million yen)
FY2/19(Mar. 1, 2018 – Feb. 28, 2019)

Net income attributable to owners of the parent

863

3,890

Amount not available to common stockholders

-

-

863

3,890

47,04147,058Net 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.

- 16 -

Adastria Co., Ltd. (2685) Summary of Financial Results for February 2019 Fiscal Year

4. Other Information(1) Changes in Directors
1. Change in representative director
Not applicable.
2. Change of other board members (Date of change: May 23, 2019)(1) Candidate for director appointment
Member of the Board of Directors and Senior Vice President, General Headquarters of Sales
Yoshiaki Kitamura (Current Senior Vice President, General Headquarters of Sales)(2) Candidate for corporate auditor
Corporate Auditor: Mariko Matsumura(Note) Ms. Mariko Matsumura is a candidate for an outside corporate auditor.
(3) Retiring corporate auditor
Corporate Auditor: Wataru Maekawa(Note) Mr. Wataru Maekawa is an outside corporate auditor.

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.

- 17 -