Consolidated Financial Results
for the Fiscal Year Ended February 28, 2015
[Japanese GAAP]
April 14, 2015
Company name: PAL CO., LTD.
Stock exchange listing: Tokyo Stock Exchange
Code number: 2726
URL: http://palgroup.co.jp
Representative: Ryuta Inoue, President and Representative Director
Contact: Yukio Utsunomiya, Managing Officer and General Manager of Administrative Department
Phone: +81-6-6227-0308
Scheduled date of ordinary general meeting of shareholders: May 27, 2015
Scheduled date of commencing dividend payments: May 28, 2015
Scheduled date of filing securities report: May 28, 2015
Availability of supplementary briefing material on financial results: Not available
Schedule of financial results briefing session: Scheduled (for analysts and institutional investors)(Amounts of less than one million yen are rounded down.)
1. Consolidated Financial Results for the Fiscal Year Ended February 28, 2015 (March 1, 2014 to February 28,
2015)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Operating income
Ordinary income
Net income
million yen%

million yen%

million yen%

Fiscal year ended
108,089
8.1
8,066
35.1
7,963
32.4
February 28, 2015
Fiscal year ended
100,033
8.2
5,969 (20.9)
6,013 (20.3)
February 28, 2014
(Note) Comprehensive income: Fiscal year ended February 28, 2015: ¥4,106 million [50.1%]
Fiscal year ended February 28, 2014: ¥2,735 million [(35.1)%]
Net income per
share

Diluted net income
per share

yen

yen

Return on
equitymillion yen

%

4,092

40.6

2,910

(33.8)

Ordinary income
to total assets

Operating income
to net sales

%

%

%

Fiscal year ended
186.04―
12.5
10.7
February 28, 2015
Fiscal year ended
132.31―
9.6
9.3
February 28, 2014
(Reference) Equity in earnings (losses) of affiliates: Fiscal year ended February 28, 2015: ¥21 million
Fiscal year ended February 28, 2014: ¥(30) million(2) Consolidated Financial Position
Total assets
million yen

Net assets
million yen

As of February 28,
82,02336,3162015
As of February 28,
66,18033,231
2014(Reference) Equity: As of February 28, 2015: ¥34,302 million
As of February 28, 2014: ¥31,247 million

Equity ratio

7.5
6.0

Net assets per share
%

yen

41.8

1,559.51

47.2

1,420.58

(3) Consolidated Cash FlowsNet cash provided by Net cash provided by Net cash provided by(used in) operating(used in) investing(used in) financing
activities
activities
activities

Cash and cash
equivalents at end of
periodmillion yen

million yen

million yen

million yen

13,084(543)(1,297)43,503

4,440(1,174)(2,759)32,258

Fiscal year ended
February 28, 2015
Fiscal year ended
February 28, 2014
2. Dividends
1stquarter-end
Fiscal year ended
February 28, 2014
Fiscal year ended
February 28, 2015
Fiscal year ending
February 29, 2016
(Forecast)

Annual dividends
2nd
3rd
Yearquarter quarter
end
-end
-end

Total

Total
dividends
paid(annual)Payout ratio(consolidated)

Dividends to
net assets(consolidated)

yen

yen

yen

yen

yen

million yen

%

%

―

0.00

―

50.00

50.00

1,099

37.8

3.6

―

0.00

―

65.00

65.00

1,429

34.9

4.4

―

0.00

―

65.00

65.00

27.0

3. Consolidated Financial Results Forecast for the Fiscal Year Ending February 29, 2016 (March 1, 2015 toFebruary 29, 2016)(% indicates changes from the previous corresponding period.)
Operating
Net income
Net sales
Ordinary income
Net income
incomeper shareFirst half
Full year

million yen%

million yen%

million yen%

million yen%

yen

57,710
119,540

11.6
10.6

3,930
8,770

3.0
8.7

3,870
8,520

2.1
7.0

2,860
5,360

40.7
31.0

129.02240.88(Note) Effective on June 1, 2015, the Company will conduct a share exchange with NICE CLAUP Co., LTD., our consolidated
subsidiary, to make it a wholly owned subsidiary. The Company will allot the treasury shares to the shareholders of NICE CLAUP Co.,
LTD. Gain on bargain purchase to be generated by this share exchange is assumed in the consolidated financial results forecast.

* Notes(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting
in changes in scope of consolidation): No(2) Changes in accounting policies, changes in accounting estimates and corrections of errors
1) Changes in accounting policies due to the revision of accounting standards: Yes
2) Any changes other than 1) above: No
3) Changes in accounting estimates: No4) Corrections of errors: No(3) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
As of February 28, 2015
23,136,000 shares
As of February 28, 2014
23,136,000 shares2) Total number of treasury shares at the end of the period:
As of February 28, 2015
1,140,318 shares
As of February 28, 2014
1,139,898 shares

3) Average number of shares during the period:
Fiscal year ended February 28, 2015
21,995,861 sharesFiscal year ended February 28, 2014
21,996,311 shares(Reference) Summary of Non-consolidated Financial Results
1. Non-consolidated Financial Results for the Fiscal Year Ended February 28, 2015 (March 1, 2014 to February
28, 2015)(1) Non-consolidated Operating Results(% indicates changes from the previous corresponding period.)
Net sales
Operating income
Ordinary income
Net income
Fiscal year ended
February 28, 2015
Fiscal year ended
February 28, 2014

million yen%

million yen%

million yen%

million yen%

90,181

9.6

7,839

23.5

7,751

20.5

4,145

23.1

82,280

10.0

6,347

(18.6)

6,435(17.9)

3,368(12.0)Net income per share

Diluted net income
per share

yen

yen

188.48―153.16―

Fiscal year ended
February 28, 2015
Fiscal year ended
February 28, 2014

(2) Non-consolidated Financial Position
Total assets

Net assets

million yen

Equity ratio

million yen

As of February 28,
71,54332,7102015
As of February 28,
58,426
29,6632014(Reference) Equity: As of February 28, 2015: ¥32,710 million
As of February 28, 2014: ¥29,663 million

Net assets per share
%

yen

45.7

1,487.15

50.8

1,348.60

2. Non-consolidated Financial Results Forecast for the Fiscal Year Ending February 29, 2016 (March 1, 2015
to February 29, 2016)(% indicates changes from the previous corresponding period.)
Net income
Net sales
Ordinary income
Net income
per shareFirst half
Full year

million yen%

million yen%

million yen%

yen

48,20099,400

11.1
10.2

4,070
8,600

4.0
11.0

2,360
4,910

6.4
18.5

106.47220.66

* Presentation regarding the implementation status of the audit process
These consolidated financial results for the fiscal year ended February 28, 2015 are not covered by the audit
procedure stipulated in the Financial Instruments and Exchange Act. At the time of the publication of thesefinancial results, the audit procedure for financial statements has not been completed.
* Explanation of the proper use of financial results forecast and other notes
The statements regarding financial results forecast in this report are based on the information that is available, as
well as estimates, assumptions and projections that are believed to be reasonable at the time of publication.
Therefore, there might be cases in which actual results differ from forecast values. For the premises of financial
results forecast and the notes concerning the use of financial results forecast, please refer to “Analysis ofOperating Results” on page 2 of the Appendix to this report.

Appendix
1. Analysis of Operating Results and Financial Position

2(1) Analysis of Operating Results

2(2) Analysis of Financial Position

3(3) Basic Policy for Distribution of Profit and Dividends for Fiscal 2014 and Fiscal 2015

4(4) Risks Factors

4(5) Significant Events Relating to Going Concern Assumption

5

2. Corporate Group Overview

6

3. Management Policy

8(1) Basic Management Policy of the Company

8(2) Targeted Management Indicators

8(3) The Company’s Medium- to Long-term Management Strategies and Issues to be Addressed

8

4. Consolidated Financial Statements

9(1) Consolidated Balance Sheets

9(2) Consolidated Statements of Income and Comprehensive Income11(3) Consolidated Statements of Changes in Net Assets

14(4) Consolidated Statements of Cash Flows

16

5. Non-consolidated Financial Statements

18(1) Non-consolidated Balance Sheets

18(2) Non-consolidated Statements of Income20(3) Non-consolidated Statements of Changes in Net Assets

22

-1-

1. Analysis of Operating Results and Financial Position(1) Analysis of Operating Results1) Overview for the Fiscal Year Ended February 28, 2015
During the fiscal year ended February 28, 2015, the Japanese economy continued on a gradual recovery trackdriven partially by the economic stimulus policies by the government. However, the sluggish consumer
spending was seen due to an increase in consumption tax rate.
Under such a business environment, the Corporate Group made every effort to expand its operations andimprove management efficiency by proactively keeping its business conditions entrenched and promoting the
opening of new stores, while at the same time revitalizing existing stores by switching businesses andwithdrawing unprofitable stores.
In the Apparel Business, the Group conducted proactive brand promotions while further pressing ahead withthe reform of merchandising (MD) and improving the freshness of merchandise through agile introduction of
items in stores, as well as the opening of 84 new stores. As a result, net sales increased by 5.7% year on yearto ¥83,454 million.
In the Miscellaneous Goods/Accessories Business, we opened 37 new stores in response to robust demand for
opening stores reflecting our rising visibility. As a result, net sales steadily continued to increase by 17.3%
year on year to ¥24,502 million.
As a result of the above, net sales of the Corporate Group for the fiscal year ended February 28, 2015
increased by 8.1% year on year to ¥108,089 million.
In terms of profit, the gross profit margin increased by 1.7 points year on year to 56.4% due to the further
reform of merchandising (MD), etc. Additionally, in terms of selling, general and administrative expenses,
SG&A ratio increased by 0.2 points year on year to 48.9% due to factors such as increases in rent expenses
and personnel expenses according to the increases in net sales and the opening of new stores.
As a result, operating income increased by 35.1% year on year to ¥8,066 million, and ordinary income
increased by 32.4% year on year to ¥7,963 million. Total amount of extraordinary losses of ¥664 million wasrecorded, including ¥197 million in loss on retirement of non-current assets due to the withdrawal of storesand the change in businesses, and ¥350 million as impairment loss for the fiscal year ended February 28,
2015. As a result, net income increased by 40.6% year on year to ¥4,092 million.
2) Sales Results by Segment for the Fiscal Year Ended February 28, 2015
Changes from the previous
Segment
Amount (million yen)fiscal year (%)
Apparel Business

83,454105.7

24,502

117.3

Other

132

79.0

Total

108,089

108.1

Miscellaneous
Goods/Accessories
Business-2-3) Status of Stores for the Fiscal Year Ended February 28, 2015 (March 1, 2014 to February 28, 2015)
Number of stores as of February 28, 2014764 stores

Number of new stores

121 stores

Number of closed stores

52 stores

Number of stores as of February 28, 2015

833 stores

4) Outlook for Fiscal 2015
As for the outlook for fiscal 2015, the Company predicts increases in both sales and profits, expecting net
sales to increase by 10.6% year on year to ¥119,540 million, operating income to increase by 8.7% year on
year to ¥8,770 million, ordinary income to increase by 7.0% year on year to ¥8,520 million and net income
to increase 31.0% year on year to ¥5,360 million.
Additionally, effective on June 1, 2015, the Company will conduct a share exchange with NICE CLAUP
Co., LTD., our consolidated subsidiary, to make it a wholly owned subsidiary. The Company will allot thetreasury shares to the shareholders of NICE CLAUP Co., LTD. Gain on bargain purchase to be generated
by this share exchange is assumed in the outlook for fiscal 2015.
(2) Analysis of Financial Position
1) Status of Assets, Liabilities and Net Assets(Assets)
Current assets increased by ¥13,640 million compared with the end of the previous fiscal year, due mainly toincreases in cash and deposits by ¥10,459 million and in merchandise by ¥1,746 million.
Non-current assets increased by ¥2,201 million compared with the end of the previous fiscal year, due
primarily to increases in buildings by ¥869 million and in guarantee deposits by ¥949 million.
(Liabilities)
Current liabilities increased by ¥10,734 million compared with the end of the previous fiscal year, due mainly
to increases in income taxes payable by ¥1,354 million and notes and accounts payable - trade by ¥6,751
million.
Non-current liabilities increased by ¥2,022 million compared with the end of the previous fiscal year, due
primarily to an increase in long-term loans payable by ¥1,326 million.
(Net assets)
Net assets increased by ¥3,085 million compared with the end of the previous fiscal year, due mainly toincreases in retained earnings, etc.
2) Status of Cash Flows
Cash and cash equivalents (hereinafter “cash”) at the end of the fiscal year ended February 28, 2015 increasedby ¥11,245 million compared with the end of the previous fiscal year to ¥43,503 million, due mainly to cash
provided by operating activities in the amount of ¥13,084 million.
Cash flows for the fiscal year ended February 28, 2015 are as follows.
(Net cash provided by (used in) operating activities)
While cash provided by operating activities was ¥4,440 million for the previous fiscal year, cash provided byoperating activities amounted to ¥13,084 million for the fiscal year ended February 28, 2015, due mainly toincreases in notes and accounts payable – trade and income before income taxes and minority interests.
(Net cash provided by (used in) investing activities)-3-

While cash used in investing activities was ¥1,174 million for the previous fiscal year, cash used in investing
activities amounted to ¥543 million for the fiscal year ended February 28, 2015, due mainly to net
expenditures of ¥947 million from the payments and repayments for guarantee deposits.
(Net cash provided by (used in) financing activities)
While cash used in financing activities was ¥2,759 million for the previous fiscal year, cash used in financing
activities amounted to ¥1,297 million for the fiscal year ended February 28, 2015, due mainly to cash
dividends paid of ¥1,099 million and repayments of installment payables of ¥1,568 million.
(Reference) Cash flow-related indicators
Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended Fiscal year ended
February 28, 2011 February 29, 2012 February 28, 2013 February 28, 2014 February 28, 2015
Equity ratio (%)

42.0

42.1

46.3

47.2

41.8

66.4

59.5

72.3

59.4

87.2

210.4

140.6

213.3

208.5

85.1

45.0

74.0

44.8

40.7

102.0

Equity ratio
based on market
value (%)
Interest-bearing
debt to cash
flows ratio (%)
Interestcoverage ratio(times)Equity ratio: Equity / Total assets
Equity ratio based on market value: Market capitalization of shares / Total assets
Interest-bearing debt to cash flows ratio: Interest-bearing debt / Operating cash flows
Interest-coverage ratio: Operating cash flows / Interest payments(3) Basic Policy for Distribution of Profit and Dividends for Fiscal 2014 and Fiscal 2015
The Company considers the returning of profits to shareholders to be one of its most important management
policies. The Company’s basic policy is to reinforce and maintain the stability of its corporate structure by
securing necessary profits from the expansion of its business as well as enhancing its internal reserves,
thereby ensuring the continuance of long-term and stable payment of dividends to its shareholders.
For Fiscal 2014, the Company expects to pay an annual dividend of ¥65 per share, which is ¥15 higher thanthat of the previous fiscal year. For Fiscal 2015, the Company also expects to pay ¥65 per share.
(4) Risks Factors
1. Changes in fashion trends
Generally, fashion trends constantly undergo changes according to what is currently in vogue, thus as amember of the fashion apparel industry, it is difficult for the Corporate Group to eliminate the effects ofsuch trends on its performance. Moreover, competition with rival companies on the youth market, whichmakes up its main customers, is becoming increasingly intense.
The Corporate Group, by developing multiple brands, covers a broad range of fashion, and by holding
weekly meetings of store managers by each business division and examining sales and inventory trends etc.,
it is making efforts to plan products and conduct purchasing reflecting what is currently in vogue.
2. Expansion policy-4-1) Expansion by renting space as a tenant
The Corporate Group expands its stores primarily by renting space in station buildings and commercial
complexes as tenants. It follows this policy in order to ensure sales capacity by opening stores in stationbuildings and other locations, which draw large volumes of customers, and also to minimize the risk ofholding excess noncurrent assets and facilities when practicing its policy of “scrap and build” through thetimely opening and closing of stores in response to the changes in the surrounding environment andcustomer flow.
Going forward, the Corporate Group will continue to pursue its policy of proactive expansion mainly byrenting space in station buildings and commercial complexes as tenants, while maintaining its store brand.
Additionally, the Corporate Group makes efforts to expand in an efficient manner by comprehensively
taking into account the rent, the demographics of the trade area, and especially in the case of apparel,
whether the potential store will be attractive to young people, its main customers, when selecting sites for
new stores. If the Corporate Group fails to secure a satisfactory number of attractive store sites, it could leadto the scaling down of the number of stores, in addition to impacting the Corporate Group’s performancedue to such factors as the number of stores, their locations and the timing of their opening.
Furthermore, as guarantee deposits are paid when renting space as tenants, guarantee deposits accounted for
15.5% of the total assets as of February 28, 2015. Although the Corporate Group mostly opens stores in thebuildings of major developers, the Corporate Group is exposed to the risk of not being able to collect theseguarantee deposits, in whole or in part, due to bankruptcy or other reasons pertaining to the lessor.
2) Costs associated with scrap and build
The Corporate Group captures changes in fashion trends accurately and in a timely manner and develops
new businesses accordingly, while at the same time, actively reviews its outdated businesses. Generally inthe retail industry, sales of existing stores tend to decline after their initial opening with the passage of time.
Consequently, the Corporate Group is constantly making efforts to revitalize its stores as a whole byproactively practicing scrap and build including the opening of new stores, reviewing the product line-up at
existing stores, changing the types of business, and closing stores, when necessary. The Corporate Group
recognizes such costs associated with the rebuilding of its business will arise in the same manner asnecessary expenses.
3. Management of customer information
Although the Corporate Group takes every precaution in managing its customer information, should suchinformation be leaked, it could have an adverse impact on its performance as a result of a decline in the
Corporate Group’s credibility, among others.
(5) Significant Events Relating to Going Concern Assumption
Not applicable.

-5-2. Corporate Group Overview
As of the end of the fiscal year ended February 28, 2015, the Corporate Group comprised the Company, nine
consolidated subsidiaries, five affiliates and one non-consolidated subsidiary. The Corporate Group is mainly
engaged in the in-store sales of apparel to the general consumer, in addition to the sales of miscellaneous goods
and other businesses.
An outline of the Corporate Group’s businesses is as follows.

General consumers

Sales of apparel
Sales of miscellaneous
goods
Sales ofapparelPAL CO., LTD.
(The Company)

Commissioningof storedevelopment
operations

Ei International Co.,Ltd.
(Consolidated
subsidiary)

Sales ofmiscellaneous
goods

Sales ofapparelSales ofapparelSales ofaccessories

Sales ofmiscellaneous
goods

Commissioningof personnel
recruitment

Planning and salesof apparel, etc.

NICE CLAUP
Co., LTD.
(Consolidated
subsidiary)

VALLELY Co.,Ltd.
(Consolidated
subsidiary)

CRESCENT
STAFF CO., LTD.
(Consolidated
subsidiary)

THE GENERAL INC.
(Consolidated
subsidiary)

Mugstyle Co., Ltd.
(Consolidated
subsidiary)

KU-CROISSANT co., ltd.
(Affiliate accounted for byequity method)

Wholesale ofmiscellaneous goods

P.M. Frontier Co., Ltd.
(Consolidated
subsidiary)

Retailers[Overseas]
Sales of apparel

RUSSET (H.K.) CO., LTD.
(Affiliate accounted for byequity method)

Sales of apparel

NICE CLAUP SHANGHAI LTD.
(Affiliate accounted for byequity method)

Generalconsumers

Royalty

PAL Holdings (Singapore) Pte. Ltd.
(Consolidated subsidiary)(Currently inactive)(Currently inactive)

Invoke Mode Co., Ltd.

NICECLAUP H.K. LTD.
(Affiliate accounted for byequity method)(Consolidated subsidiary)-6-

(Notes) 1 NICECLAUP H.K. LTD., an affiliate accounted for by equity method, has suspended operations since
September 2008.
2 Invoke Mode Co., Ltd., a consolidated subsidiary, has suspended operations since January 2011.
3 Brandnewdays Co., Ltd., which had been a consolidated subsidiary by the end of the previous fiscal
year, was merged into Ei International Co., Ltd., a consolidated subsidiary, as of March 1, 2014.
4 PAL Holdings (Singapore) Pte. Ltd., a consolidated subsidiary, was established during the fiscal year
ended February 28, 2015-7-

3. Management Policy(1) Basic Management Policy of the Company
The Company’s motto is “To contribute to society by constantly proposing new fashionable ways of life.” To
this end, we have made it our basic policy to grow and win the trust of not only our customers, but also
shareholders, business partners, and the society in every aspect of our business including our products,
services, sales technique, financial constitution and the quality of our employees.
(2) Targeted Management Indicators
The Company aims to reinforce its corporate foundations and enhance its high-profit company structure, while
engaging in corporate management based on the ROE (Return on Equity) as its key indicator.
(3) The Company’s Medium- to Long-term Management Strategies and Issues to be Addressed
The Corporate Group will make every effort 1) to pursue both price appeal and profitability by promoting the
supply of products of high-sensitivity and high profit margins in line with globalization of production, while
2) ensuring the optimal allocation of management resources by promoting greater efficiency in staff
assignments and store management. The Corporate Group also intends 3) to engage in companywide activities
in order to improve Customer Satisfaction (CS) and win the support of its customers.
Additionally, 4) under the theme of “Let’s become top notch,” the approximately 50 brands of the Corporate
Group have set their own targets in accordance with their individual brand concepts and are striving to further
improve operating efficiency in terms of sales and profits, etc., in addition to implementing various measuresin order to become “top notch” in brand image and CS.
Through the implementation of the above measures, the Corporate Company intends to expand its
management base and aim for stable growth.

-8-

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of yen)
As of February 28, 2014
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Merchandise
Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-9-

As of February 28, 2015

33,044
4,146
5,955
6
489
744
(46)
44,34043,503
5,603
7,701
6
580
589
(3)
57,981

10,690(4,573)
6,116
14
(10)
4
763
1,809
(733)
1,076
280
(187)
92
8,053
61

11,819(4,833)
6,986
14
(11)
2
723
2,315
(903)
1,412
262
(175)
86
9,211
201

955
11,801
464
621
(118)
13,724
21,83966,180843
12,750
513
641
(119)
14,62824,041
82,023

(Millions of yen)
As of February 28, 2014
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Provision for bonuses
Provision for directors’ bonuses
Provision for sales returns
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Provision for retirement benefits
Net defined benefit liability
Provision for directors’ retirement benefits
Provision for loss on guarantees
Long-term accounts payable - other
Lease obligations
Asset retirement obligations
Negative goodwill
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeMinority interests
Total net assets
Total liabilities and net assets- 10 -

As of February 28, 2015

11,455
782
2,849
1,629
1,008
955
233
0
2,946
21,861

18,207
1,459
2,725
2,143
2,363
1,122
281
0
4,293
32,596

5,628
629
－
112
－
2,546
829
1,264
9
13
53
11,08732,949

6,954
－
541
115
71
2,856
1,092
1,424
－
10
43
13,11045,706

3,181
3,379
25,571(1,145)30,986

3,181
3,379
28,563(1,146)33,977

254

261

5
－

6
56

260

324

1,984
33,231
66,1802,014
36,31682,023

(2) Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income(Millions of yen)

Net sales
Cost of sales
Gross profit
Provision for sales returns
Gross profit - net
Selling, general and administrative expenses
Advertising and promotion expenses
Transportation and warehousing expenses
Provision of allowance for doubtful accounts
Salaries, allowances and bonuses
Provision for bonuses
Provision for directors’ bonuses
Provision for retirement benefits
Retirement benefit expenses
Provision for directors’ retirement benefits
Welfare expenses
Rent expenses
Lease expenses
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Rent income
Share of profit of entities accounted for using
equity method
Amortization of negative goodwill
Reversal of allowance for doubtful accounts
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodLoss on investments in partnership
Provision of allowance for doubtful accounts
Provision for loss on guarantees
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Total extraordinary income

Fiscal year ended
February 28, 2014
100,033
45,32254,710(0)54,710Fiscal year ended
February 28, 2015
108,089
47,14560,944(0)60,944

2,280
2,411
(1)
14,426
955
233
108
－
3
2,476
16,713
254
8,878
48,741
5,969

2,394
2,738
(0)
15,628
1,122
281
－
45
3
2,752
18,109209
9,592
52,877
8,066

9
21

11
10

－

21

32
－
110
57
231

9
37
－
40
132

109

128

30

－

4
30
－
11
187
6,013

9
－
71
25
235
7,963

－
－

15
15

- 11 -

(Millions of yen)
Fiscal year ended
February 28, 2014
Extraordinary losses
Loss on retirement of non-current assets
Loss on cancellation of leases
Impairment loss
Loss on valuation of shares of subsidiaries andassociates
Loss on valuation of investment securities
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes - current
Income taxes - deferred
Total income taxes
Income before minority interests
Minority interests in income (loss)
Net income- 12 -

Fiscal year ended
February 28, 2015
340
12
422

197
6
350

29

－

－
1
807
5,206
2,553
(9)
2,543
2,662
(247)
2,910

100
8
664
7,313
3,358
(140)
3,217
4,095
3
4,092

Consolidated Statements of Comprehensive Income(Millions of yen)
Fiscal year ended
February 28, 2014
Income before minority interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Deferred gains or losses on hedges
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable to minority
interests- 13 -

Fiscal year ended
February 28, 2015
2,662

4,095

108

9

(42)

－

7

1

72
2,735

10
4,106

2,977

4,099

(241)

7

(3) Consolidated Statements of Changes in Net Assets
Fiscal year ended February 28, 2014
(Millions of yen)
Shareholders’ equity

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplusCapital stock

Capital surplus

3,181

3,379

Net income
Purchase of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

Retainedearnings
23,760Treasury shares

Total
shareholders’equity(1,143)29,177(1,099)(1,099)

2,910

2,910
(1)

(1)

－

－

1,810

(1)

1,808

3,181

3,379

25,571(1,145)30,986(Millions of yen)
Accumulated other comprehensive income

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus

Valuationdifference on
availablefor-salesecurities

Deferred gains
or losses onhedges149

42

Foreigncurrencytranslation
adjustment
1

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
income－193

Minority
interests

2,253

31,624(1,099)Net income
Purchase of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

Total net
assets

2,910
(1)
105

(42)

4

－

67

(268)

(201)

105

(42)

4

－

67

(268)

1,607

254

－

5

－

260

1,984

33,231- 14 -

Fiscal year ended February 28, 2015
(Millions of yen)
Shareholders’ equity

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplusCapital stock

Capital surplus

3,181

3,379

Net income
Purchase of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

Retainedearnings
25,571

Treasury shares

Total
shareholders’equity(1,145)30,986(1,099)(1,099)

4,092

4,092
(1)

(1)

－

－

2,992

(1)

2,991

3,181

3,379

28,563(1,146)33,977(Millions of yen)
Accumulated other comprehensive income

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus

Valuationdifference on
availablefor-salesecurities

Deferred gains
or losses onhedges254－

Foreigncurrencytranslation
adjustment
5

Remeasurementsof defined benefit
plans

Total
accumulated
othercomprehensive
income－260

Minority
interests

1,984

33,231(1,099)Net income
Purchase of treasury
sharesNet changes of
items other thanshareholders’ equity
Total changes of items
during period
Balance at end ofcurrent period

Total net
assets

4,092
(1)
6

－

1

56

64

29

93

6

－

1

56

64

29

3,085

261

－

6

56

324

2,014

36,316- 15 -

(4) Consolidated Statements of Cash Flows(Millions of yen)
Fiscal year ended
February 28, 2014
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Impairment loss
Amortization of negative goodwill
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of (profit) loss of entities accounted forusing equity method
Decrease (increase) in notes and accounts
receivable - trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable- tradeIncrease (decrease) in provision for bonuses
Increase (decrease) in provision for directors’
retirement benefits
Increase (decrease) in provision for directors’
bonuses
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in net defined benefit liability
Increase (decrease) in provision for sales returns
Increase (decrease) in provision for loss on
guarantees
Loss on valuation of shares of subsidiaries andassociates
Loss on retirement of property, plant andequipment
Loss (gain) on sales of non-current assets
Loss (gain) on valuation of investment securities
Loss (gain) on investments in partnership
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities- 16 -

Fiscal year ended
February 28, 2015
5,206
1,582
422
(32)

7,313
1,744
350
(9)

28

(37)

(13)
109
(1)

(15)
128
(1)

30

(21)

(148)

(1,457)(522)(1,745)

520

6,803

126

167

(5)

3

(65)

48

60

(629)

－
(0)

541
(0)

－

71

29

－

353

204

－
－
4
(51)
(3)
7,634
10
(109)
(3,095)
4,440

(15)
100
9
777
894
15,22513(128)(2,026)
13,084

(Millions of yen)
Fiscal year ended
February 28, 2014
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant andequipment
Proceeds from sales and redemption of short-termand long-term investment securities
Payments of loans receivableCollection of loans receivable
Purchase of intangible assets
Decrease (increase) in time deposits
Payments for guarantee deposits
Proceeds from collection of guarantee deposits
Purchase of shares of subsidiaries
Payments for asset retirement obligations
Proceeds from liquidation of subsidiaries
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans
payableProceeds from long-term loans payable
Repayments of long-term loans payable
Purchase of treasury shares
Purchase of treasury shares of subsidiaries
Cash dividends paid
Cash dividends paid to minority shareholders
Proceeds from share issuance to minority
shareholders
Repayments of installment payables
Repayments of finance lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 17 -

Fiscal year ended
February 28, 2015
(450)

(334)

24

67

212

15

(177)
73
(4)
(0)
(1,427)
689
(15)
(152)
52
0
(1,174)

(7)
185
(152)
785
(2,004)
1,057
－
(155)
－
－
(543)

55

677

1,205
(1,116)(1)(0)(1,099)(31)

2,830(1,628)(1)(0)(1,099)
(16)

20

－

(1,408)(383)(2,759)(1,568)(490)(1,297)1

1507
31,75032,258

11,24532,25843,503

5. Non-consolidated Financial Statements(1) Non-consolidated Balance Sheets(Millions of yen)
As of February 28, 2014
AssetsCurrent assets
Cash and deposits
Accounts receivable - trade
Merchandise
Advance payments - trade
Prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings
VehiclesTools, furniture and fixtures
Land
Leased assets
Total property, plant and equipment
Intangible assets
Trademark rightTelephone subscription rightLeased assets
Software in progress
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term prepaid expenses
Guarantee deposits
Insurance funds
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 18 -

As of February 28, 2015

28,181
3,124
5,132
136
224
466
350
(30)
37,58536,679
4,318
6,703
87
237
567
91
－
48,683

5,357
4
10
943
1,027
7,344

6,207
2
8
944
1,331
8,494

0
17
11
－
29

18
17
7
131
175

772
1,944
281
9,854
95
491
79
(52)
13,467
20,84158,426

674
1,944
282
10,637
95
538
68
(52)
14,18922,85971,543

(Millions of yen)
As of February 28, 2014
Liabilities
Current liabilities
Notes payable - trade
Accounts payable - trade
Current portion of long-term loans payable
Accounts payable - other
Current portion of long-term accounts payableotherAccrued expenses
Lease obligations
Income taxes payable
Accrued consumption taxes
Deposits received
Provision for bonuses
Provision for directors’ bonuses
Asset retirement obligations
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Provision for retirement benefits
Provision for directors’ retirement benefits
Long-term accounts payable - other
Lease obligations
Provision for loss on guarantees
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Total capital surpluses
Retained earnings
Legal retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Total retained earnings
Treasury shares
Total shareholders’ equity
Valuation and translation adjustments
Valuation difference on available-for-salesecurities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 19 -

As of February 28, 2015

2,077
8,179
2,675
639

3,222
12,258
2,527
770

1,161

1,306

1,430
356
950
169
35
871
233
20
10
18,810

1,900
451
2,242
819
129
1,026
278
9
13
26,956

5,426
337
112
2,249
788
－
984
53
9,952
28,762

6,510
391
115
2,593
1,023
71
1,140
29
11,87538,832

3,181

3,181

3,379
0
3,379

3,379
0
3,379

21

21

12,60011,36723,988(1,145)29,403

12,60014,41327,034(1,146)32,448

259

262

259
29,66358,426262
32,71071,543

(2) Non-consolidated Statements of Income(Millions of yen)
Fiscal year ended
February 28, 2014
Net sales
Cost of sales
Beginning goods
Cost of purchased goods
Total
Ending goods
Total cost of sales
Gross profit
Selling, general and administrative expenses
Sales commission
Packing and transportation expenses
Advertising expenses
Directors’ compensations
Salaries and allowances
Bonuses
Provision for bonuses
Provision for directors’ bonuses
Provision for retirement benefits
Provision for directors’ retirement benefits
Welfare expenses
Entertainment expenses
Traveling and transportation expenses
Taxes and dues
Depreciation
Technical development expenses
Rent expenses
Lease expenses
Utilities expenses
Commission fee
Miscellaneous expenses
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Provision for loss on guarantees
Other
Total non-operating expenses
Ordinary income- 20 -

82,280Fiscal year ended
February 28, 2015
90,181

4,505
37,39041,895
5,132
36,76345,516

5,132
40,51245,645
6,703
38,942
51,239

785
1,883
837
281
10,751
733
871
233
64
3
2,017
34
470
293
1,234
106
13,470
224
635
2,964
1,271
39,169
6,347

1,024
2,232
735
169
11,881
881
1,026
278
71
3
2,294
33
462
318
1,435
150
14,904
177
699
3,273
1,347
43,400
7,839

6
54
20
105
－
29
216

13
28
10
－
30
28
111

89
30
－
9
128
6,435

106
－
71
21
199
7,751

(Millions of yen)
Fiscal year ended
February 28, 2014
Extraordinary losses
Loss on retirement of non-current assets
Loss on cancellation of leases
Impairment loss
Loss on valuation of shares of subsidiaries andassociates
Loss on valuation of investment securities
Other
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income- 21 -

Fiscal year ended
February 28, 2015
229
9
292

129
0
281

29

－

－
－
561
5,873
2,465
40
2,505
3,368

100
8
521
7,230
3,233
(148)
3,084
4,145

(3) Non-consolidated Statements of Changes in Net Assets
Fiscal year ended February 28, 2014
(Millions of yen)
Shareholders’ equity
Capital surplus

Capital stock

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus3,181

Retained earnings
Other retained earnings

Legal capital Other capitalsurplussurplus3,379

0Total capitalsurpluses

Legalretainedearnings

3,379

21

Generalreserve

Retainedearnings
brought
forward12,6009,098(1,099)Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

3,368

－

－

－

－

－

－

2,269

3,181

3,379

0

3,379

21

12,60011,367(Millions of yen)
Shareholders’ equity
Retainedearnings
Total retained
earnings
Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus
Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

21,719Treasuryshares(1,143)

Valuation and translation adjustments

Valuation
Total
difference onshareholders’ available-forequity
sale
securities
27,136

159

Deferred
gains orlosses onhedgesTotalvaluation andtranslation
adjustments

Total net
assets42

201

27,338(1,099)(1,099)(1,099)

3,368

3,368

3,368

(1)

(1)

(1)

100

(42)

58

58

2,269

(1)

2,267

100

(42)

58

2,325

23,988(1,145)29,403

259

－

259

29,663- 22 -

Fiscal year ended February 28, 2015
(Millions of yen)
Shareholders’ equity
Capital surplus

Capital stock

Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus3,181

Retained earnings
Other retained earnings

Legal capital Other capitalsurplussurplus3,379

0Total capitalsurpluses

Legalretainedearnings

3,379

21

Generalreserve

Retainedearnings
brought
forward12,60011,367(1,099)Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

4,145

－

－

－

－

－

－

3,046

3,181

3,379

0

3,379

21

12,60014,413(Millions of yen)
Shareholders’ equity
Retainedearnings
Total retained
earnings
Balance at beginningof current period
Changes of items
during period
Dividends ofsurplus
Net income
Purchase oftreasury shares
Net changes of
items other thanshareholders’equityTotal changes of
items during period
Balance at end ofcurrent period

23,988Treasuryshares(1,145)

Valuation and translation adjustments

Valuation
Total
difference onshareholders’ available-forequity
sale
securities
29,403259

Deferred
gains orlosses onhedgesTotalvaluation andtranslation
adjustments

Total net
assets－259

29,663(1,099)(1,009)(1,099)

4,145

4,145

4,145

(1)

(1)

(1)

2

－

2

2

3,046

(1)

3,044

2

－

2

3,047

27,034(1,146)32,448

262

－

262

32,710- 23 -