Financial overview

In million JPY	FY2007	FY2006	Rate of Change(%)	Factors
Sales	87,406	78,822	10.8	-
Operating profit	7,577	6,710	12.9	-
Ordinary profit	8,361	7,571	10.4	-
Current net income	3,994	3,679	8.6	-

Sales by division

Mechanical seal division	37,838	35,124	7.7	Sales of products for all industries (automotive, construction, and industrial machineries) increased.
Special valve division	23,510	19,647	19.7	Sales of automotive products significantly increased

Reorganizing domestic production structure
The Company announced that it has merged two of its domestic subsidiaries, Eagle Burgmann Japan Co., Ltd. and Eagle Burgmann Techno Co., Ltd. The name of the new company, a wholly-owned subsidiary of the Company, is Eagle Burgmann Japan Co., Ltd. The Company stated this transaction was an important step in promoting its strategic alliance with Burgmann Industries GmbH & Co. KG, a leading seal manufacturer and a subsidiary of Freudenberg & Co. of Germany. The Company, through this merger, intends to improve its management efficiency by integrating systems and operations of the two in the areas of production, development, and sales and further enhance the quality of services it offers. (From a press release on Nov. 1, 2007)

Three-year business plan
-The Company launched a three-year business plan that serves as a basis for stable growth and profitability over the mid to long term.
Numeric targets for FY2009 on a consolidated basis
(1) Sales: 100 billion JPY
(2) Operating income: 10 billion JPY
(3) Return on Assets (ROA): 6%

R&D expenses
- R&D expenses for FY2007: 629 million yen

Recent Developments of automotive products
<Mechanical seals division>
- In the are area of seals for engine coolant circulation pumps, the Company worked on developing sliding materials that can withstand poor operating conditions, including operating with deteriorated cooling water.
- The Company continued to work on developing next-generation refrigerant seals for use in automotive air conditioner compressors.


<Special valves division>
-The Company is working on developing special valves for the next generation of in-vehicle compressors, transmissions, and suspensions; as well as engines that comply with emission regulations.
-The Company is developing turbo charger actuators.

Capital investment

(in in million yen)	FY 2007	FY 2006	FY 2005
Mechanical Seal Division	2,487	2,439	1,582
Special Valves Division	1,885	2,092	1,683
Other products Division	1,173	293	597
Company wide	-	436	302
Total	5,545	5,261	4,164

Investment projects
Mechanical Seal Division
(Investments by the Company)
-To increase the production capacity of automotive mechanical seals: 595 million JPY
(Investments in affiliated companies)
-630 million JPY in Eagle Industry (Wuxi) Co., Ltd. (China)
-43 million JPY in Eagle Burgmann Japan (Japan)
-66 million JPY in Shimane Eagle Co., Ltd. (Japan)
-442 million JPY in NEK Co., Ltd. (Korea)

Special Valves Division
(Investments by the Company)
-To strengthen production capacity of control valves for automotive compressors: 1,011 million JPY
-To strengthen production capacity of mechatronic valves: 591 million JPY
(Investments in affiliated companies)
-55 million JPY in Eagle Industry (Wuxi) Co., Ltd. (China)
-31 million JPY in Eagle Industry (Thailand) Co., Ltd. (Thailand)

Equipment to be installed (in million yen)

Facility (Location)	Equipment to be installed	Estimated amount of investment	Period of the project
			from	to
Okayama Plant (Okayama, Japan)	Production equipment for mechanical seals	1,072	Apr. 2008	Mar. 2009
	Production equipment for control valves etc.	871	Apr. 2008	Mar. 2009
	Buildings and other	132	Apr. 2008	Mar. 2009
Saitama Plant (Saitama, Japan)	Production equipment for mechanical seals	646	Apr. 2008	Mar. 2009
Eagle Burgmann Co., Ltd (Niigata, Japan)	Production equipment for mechanical seals	280	Apr. 2008	Mar. 2009
NEK Co., Ltd. (Korea)	Production equipment for mechanical seals	147	Apr. 2008	Mar. 2009
Eagle Industry (Taiwan) Co., Ltd. (Taiwan)	Production equipment for reed valves	529	Apr. 2008	Mar. 2009
Eagle Industry (Wuxi) Co., Ltd. (China)	Production equipment for mechanical seals	729	Apr. 2008	Mar. 2009