Summary of Consolidated Financial Results
for the First Quarter of the Fiscal Year Ending February 28, 2015
(Three Months Ended May 31, 2014)[Japanese GAAP]
June 30, 2014

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:
Ryo Araya, General Manager, Corporate Strategy Department
Tel: +81-3-6895-6000
Scheduled date of filing of Quarterly Report:
July 15, 2014
Scheduled date of payment of dividend:
Preparation of supplementary materials for quarterly financial results:
Yes
Holding of quarterly financial results meeting:
None
Note: The original disclosure in Japanese was released on June 30, 2014 at 15:00 (GMT +9).
(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter of the Fiscal Year Ending February 28, 2015
(March 1, 2014 – May 31, 2014)(1) Consolidated results of operations (cumulative)
Net sales
Million yen

Three months ended May 31, 2014
Three months ended May 31, 2013
Note: Comprehensive income

Three months ended May 31, 2014
Three months ended May 31, 2013
Reference: EBITDA%

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

Million yen

Million yen%%

Million yen

43,59141.5
1,435 (52.5)
1,478 (53.4)
30,806
14.3
3,022
27.7
3,169
31.1
Three months ended May 31, 2014:
593 million yen (down 75.2%)
Three months ended May 31, 2013: 2,392 million yen (up 65.5%)
Net income per share

Diluted net income per share

Yen

Yen

10.56
84.07
Three months ended May 31, 2014:
Three months ended May 31, 2013:

%

256
1,827

(86.0)
35.2

10.56
84.07
3,585 million yen (down 15.5%)
4,242 million yen

EPS before goodwill amortization

Three months ended May 31, 2014:35.26 yen (down 60.1%)
Three months ended May 31, 2013:88.36 yen(*) For more details regarding definition, computational method and other matters of these indices, please refer to the section“Explanation of Results of Operations” on page 2.
(2) Consolidated financial position

As of May 31, 2014
As of Feb. 28, 2014
Reference: Shareholders’ equity

Total assets

Net assets

Equity ratio

Million yen

Million yen%

As of May 31, 2014:

89,31378,841
44,766 million yen

44,77144,786
As of Feb. 28, 2014:

50.1
56.8
44,780 million yen

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

Total

Yen

Yen

Yen

Yen

Yen

Fiscal year ended Feb. 28, 2014
50.00
Fiscal year ending Feb. 28, 2015
Fiscal year ending Feb. 28, 2015 (forecast)
30.00
Note: Revision to the most recently announced dividend forecast: None

-

25.00

75.00

-

45.00

75.00

3. Consolidated Forecast for the Fiscal Year Ending February 28, 2015 (March 1, 2014 – February 28, 2015)
Net sales
Million yen%

Operating income

Ordinary income

Million yen

Million yen%

First half
86,900 36.3
2,300 (39.0)
2,300
Full year
185,900 21.3
6,000
4.1
6,000
Note: Revision to the most recently announced consolidated forecast: None%

(42.2)(0.5)(Percentages represent year-on-year changes)
Net income
Net income per share
Million yen

500
1,600

%

(76.1)
-

Yen

20.59
65.89

* Notes(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes inscope of consolidation): None
(2) Special accounting methods in the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting policies and accounting-based estimates, and restatements
1) Changes in accounting policies due to revisions in accounting standards, others: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting-based estimates: None
4) Restatements: None

(4) Number of outstanding shares (common stock)1) Number of shares outstanding at end of period (including treasury shares)
As of May 31, 2014:

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 May 31, 2014:

117,938 shares

3) Average number of shares outstanding during the period (cumulative)
Three months ended May 31, 2014: 24,282,187 shares

Three months ended May 31, 2013:

21,742,115 shares

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

Reference: Summary of Non-consolidated Forecast
Non-consolidated Forecast for the Fiscal Year Ending February 28, 2015 (March 1, 2014 – February 28, 2015)
Net sales
Million yen%

Operating income

Ordinary income

Million yen

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

First half
1,900 (96.6)
100 (97.9)
300 (94.0)
100 (96.7)
Full year
3,900 (93.2)
200 (96.2)
500 (90.9)200
Note: Revision to the most recently announced non-consolidated forecast: None
The Company shifted to a holding company structure through a company split on September 1, 2013.

Yen

4.12
8.24

Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

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

2(2) Explanation of Financial Position

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

3

2. Matters Related to Summary Information (Notes)

3(1) Changes in Significant Subsidiaries during the Period

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

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

3

3. Quarterly Consolidated Financial Statements

4(1) Quarterly Consolidated Balance Sheet

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

6(3) Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders’ Equity

8

4. Supplementary Information

8(1) Number of Stores

8(2) Sales for Brands and Regions

9(3) Sales for Merchandise Categories

9

- 1 -

Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

1. Qualitative Information on Quarterly Consolidated Financial Performance(1) Explanation of Results of Operations
In the first quarter of the fiscal year (March 1, 2014 to May 31, 2014), the Japanese economy continued to recover at
a moderate pace due to the benefits of the Japanese government’s economic measures and monetary policy as well
as for other reasons. However, consumer spending was weakening due in part to the consumption tax hike in April.
In the casual wear market where core brands of Adastria Holdings Co., Ltd. (hereafter “the Company”) and theCompany’s Group (hereafter “the Group”) belong to, the operating environment is favorable overall due to
expectations for an economic recovery and the rush to make purchases before the consumption tax hike, despitesome signs of shift in consumer behavior toward thrift and saving because of the consumption tax hike.
In this circumstances, the Group’s two wholly owned subsidiaries merged on April 1, 2014. One is TRINITY ARTS
INC., which is the surviving company, and the other is BABYLONE INC., which was dissolved.
TRINITY ARTS INC. is a retailer of lifestyle-proposing brands for apparel, accessories and other consumer
products, and BABYLONE INC. uses higher price-range brands to sell apparel mainly at station buildings andfashion-business malls. We believe that this merger was needed because of the importance of making brands morecompetitive by using advertising activities, opening stores, and effectively using employees and other corporate
resources.
Regarding store network, we opened 106 new stores (including 6 overseas), and closed 15 (including 7 overseas),
resulting in a total network of 1,304 stores (including 80 overseas) at the end of the first quarter of the current fiscal
year.
Consolidated sales increased sharply by 41.5% year-on-year, benefiting from the consolidation of TRINITY ARTS
INC. in September 2013. Sales of the GLOBAL WORK, LEPSIM LOWRYS FARM, niko and…, and STUDIO CLIP
brands all posted solid sales.
There was a large decline of 6.5 percentage points in the operating margin from the previous fiscal year to 3.3%.
One reason was a decline in the gross profit margin that was partly the result of a higher cost of sales ratio caused by
the weaker yen. Amortization of goodwill resulting from the consolidation of TRINITY ARTS INC. in September
2013 is another reason for the lower operating margin. Furthermore, there was an increase in selling, general andadministrative expenses due to extensive advertising activities using TV commercials and other advertisements.
There was an extraordinary loss of 180 million yen for impairment losses at stores.
As a result, consolidated net sales in the first quarter of the current fiscal year increased 41.5% year-on-year to
43,591 million yen, operating income decreased 52.5% to 1,435 million yen, ordinary income decreased 53.4% to
1,478 million yen, and net income decreased 86.0% to 256 million yen.
Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 15.5% to 3,585 million yen andearnings per share, before goodwill amortization, fell 60.1% to 35.26 yen. (*)(*) Amortization of goodwill that mainly resulted from the consolidation of TRINITY ARTS INC. causes 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. As a result, we are newly announcing EBITDA and EPS before goodwill amortization as
reference financial indicators.
EBITDA
Operating income + Depreciation + Amortization of goodwill (selling, general and administrative expenses)
EPS before goodwill amortization(Net income + Amortization of goodwill (selling, general and administrative expenses, and extraordinary loss))/
Average number of shares outstanding during the period- 2 -Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year(2) Explanation of Financial Position
Total assets increased 10,472 million yen from as of February 28, 2014 to 89,313 million yen as of May 31, 2014.
This was mainly due to increases in notes and accounts receivable-trade of 4,451 million yen, inventories of 1,890
million yen and property, plant and equipment of 1,408 million yen.
Liabilities increased 10,487 million yen to 44,542 million yen. This was mainly due to an increase in short-termloans payable of 11,059 million yen.
Net assets decreased 14 million yen to 44,771 million yen.
(3) Explanation of Consolidated Forecast and Other Forward-looking Statements
There are no revisions to the consolidated forecast for the first half and full year of the current fiscal year that wasannounced on April 4, 2014.

2. Matters Related to Summary Information (Notes)(1) Changes in Significant Subsidiaries during the Period
Not applicable.
(2) Application of Special Accounting Methods for Presenting Quarterly Consolidated Financial Statements
Not applicable.
(3) Changes in Accounting Policies and Accounting-based Estimates, and Restatements
Not applicable.

- 3 -Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheet(Million yen)First quarter of FY2/15(As of May 31, 2014)

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

8,540

8,670

Notes and accounts receivable-trade

6,016

10,467

Inventories

13,91415,804

Other

3,088

2,785

Allowance for doubtful accounts

(33)

(65)

31,52537,662

Store interior equipment, net

8,692

10,267

Other, net

5,402

5,236

Total property, plant and equipment

14,095

15,503

Goodwill

10,606

10,258

Other

1,182

1,196

Total intangible assets

11,78911,454

Lease and guarantee deposits

14,732

16,713

Other

6,909

8,193

Allowance for doubtful accounts

(210)

(214)

Total investments and other assets

21,43024,69247,31551,651

78,84189,313

Notes and accounts payable-trade

14,626

13,782

Short-term loans payable

4,734

15,793

Accounts payable-other

8,056

8,749

Income taxes payable

2,458

1,538

Provision for bonuses

1,594

1,502

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

Intangible assets

Investments and other assets

Total non-current assets
Total assets
Liabilities
Current liabilities

Provision for directors' bonuses-

79

Other provision

290

291

Other

713

952

32,47442,690Total current liabilities
Non-current liabilities
Provision

101

95

Other

1,479

1,756

Total non-current liabilities

1,580

1,851

34,05444,542

Total liabilities- 4 -Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

(Million yen)First quarter of FY2/15(As of May 31, 2014)

FY2/14(As of Feb. 28, 2014)
Net assets
Shareholders' equity
Capital stock

2,660

2,660

Capital surplus

6,986

6,986

Retained earnings

33,48233,132

Treasury shares

(407)

(407)

Total shareholders' equity

42,722

42,371

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

1,720

2,217

Deferred gains or losses on hedges

28

(49)

Foreign currency translation adjustment

308

226

2,058

2,394

5

5

44,78644,771

78,84189,313

Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets- 5 -Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statement of Income(For the Three-month Period)First three months of FY2/14(Mar. 1, 2013 – May 31, 2013)(Million yen)First three months of FY2/15(Mar. 1, 2014 – May 31, 2014)

Net sales

30,806

43,591

Cost of sales

11,495

17,637Gross profit

19,311

25,954

Selling, general and administrative expenses

16,28924,519Operating income

3,022

1,435

Dividend income

22

33

Insurance premiums refunded cancellation

62

-

Other

73

63

Total non-operating income

158

96

Interest expenses

2

13Commitment fee

3-

Loss on insurance cancellation

3-

Loss on valuation of derivatives

-

32

Other

0

7

Total non-operating expenses

10

53

3,169

1,478

Gain on sales of investment securities-

9

Total extraordinary income-

9

Impairment loss

27

180

Total extraordinary losses

27

180

Income before income taxes and minority interests

3,141

1,306

Income taxes-current

1,570

1,572

Income taxes-deferred

(256)

(522)

Total income taxes

1,314

1,050

Income before minority interests

1,827

256

Net income

1,827

256

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses- 6 -Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

Quarterly Consolidated Statement of Comprehensive Income(For the Three-month Period)First three months of FY2/14(Mar. 1, 2013 – May 31, 2013)(Million yen)First three months of FY2/15(Mar. 1, 2014 – May 31, 2014)

1,827

256

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities

440

496

Deferred gains or losses on hedges

(6)

(77)

Foreign currency translation adjustment

130

(82)

Total other comprehensive income

564

336

2,392

593

2,392

593

-

-

Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to minority
interests- 7 -Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

(3) Notes to Quarterly Consolidated Financial Statements
Going Concern Assumption
Not applicable.
Significant Changes in Shareholders’ Equity
Not applicable.
4. Supplementary Information(1) Number of Stores
Number of storesFirst three months of FY2/15

As ofFeb. 28,2014

Opened,etc.

Rebranded

GLOBAL WORK

173

4

-

LOWRYS FARM

159

4

LEPSIM LOWRYS FARM

110

3JEANASIS82

RAGEBLUE
HEATHER
OthersStore format / region

Total (POINT INC.)

Merged(Note 4)

Increase/decrease

As of
May 31,
2014

(2)

-

2

175

(1)

(3)

-

-

159

-

-

-

3

113

-

-

(1)

-

(1)

81

62

1

-

-

-

1

63

76

3

-

-

-

3

79

145

17

1

-

-

18

163

Closed

807

32

-

(6)

-

26

833

niko and...

100

8

-

(1)

-

7

107

STUDIO CLIP

129

24

-

-

-

24

153

Others

54

29

-

(1)

49

77

131

Total (TRINITY ARTS INC.)

283

61

-

(2)

49

108

391

BABYLONE INC.

42

7

-

-

(49)

(42)

-

Total (Japan)

1,132

100

-

(8)

-

92

1,224

Hong Kong

30

-

-

(4)

-

(4)

26

China

21

5

-

(1)

-

4

25

Taiwan

21

1

-

(2)

-

(1)

20

Singapore

9

-

-

-

-

-

9

Total (Overseas)

81

6

-

(7)

-

(1)

80

Total (Group)

1,213

106

-

(15)

-

91

1,304

Notes: 1. The number of stores includes e-commerce websites of other companies and e-commerce websites of the Company.
2. Stores that sell merchandise of two or more brands are categorized as the brand that operates each store.
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.

- 8 -Adastria Holdings Co., Ltd. (2685) Summary of 1Q Financial Results for February 2015 Fiscal Year

(2) Sales for Brands and Regions
Brand / region

First three months of FY2/15
Sales (million yen)
Composition (%)

YoY change (%)

GLOBAL WORK

7,043

16.1

16.9

LOWRYS FARM

5,944

13.7

(8.5)

LEPSIM LOWRYS FARM

3,515

8.1

24.6

JEANASIS

2,257

5.2

(15.2)RAGEBLUE

1,916

4.4

(10.1)

HEATHER

1,938

4.4

(11.8)

Others

6,022

13.8

6.8

Total (POINT INC.)

28,638

65.7

2.4

niko and...

4,673

10.7

-

STUDIO CLIP

4,225

9.7

-

Others

2,724

6.2

-

11,624

26.6

-

764

1.8

(33.9)

2

0.0-

41,030

94.1

40.9

1,633

3.7

68.9

China

299

0.7

40.5

Taiwan

371

0.9

2.2

Singapore

256

0.6

91.1

Total (Overseas)

2,561

5.9

52.6

Total (Group)

43,591

100.0

41.5

Total (TRINITY ARTS INC.) (Note 3)
BABYLONE INC. (Note 3)
OthersTotal (Japan)
Hong Kong

Notes: 1. TRINITY ARTS INC. includes figures for its subsidiaries.
2. No year-on-year change is shown for TRINITY ARTS INC. because this company became a consolidated subsidiary inthe third quarter of the previous fiscal year.
3. 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.

(3) Sales for Merchandise Categories
Category

First three months of FY2/15
Sales (million yen)

Composition (%)

YoY change (%)

Men’s apparel (bottoms, tops)

6,028

13.8

9.9

Lady’s apparel (bottoms, tops)

29,26067.1

46.4

Others

8,301

19.1

55.7

Total
43,591100.0
Note: The others category includes additions to the provision for point card certificates and other items.

41.5This 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.

- 9 -