JECO CO., LTD. Business Report FY2006

Business Highlights

Financial Overview

In million JPY	FY2006	FY2005	Increases (%)	Factors
Overall
Sales	24,295	21,976	10.6%	- Sales of air-conditioner panels, accessory meters, motors for electronic throttles, and current sensors increased, although the sales of the motors for ABSs and combination meters decreased. In the end, however, overall sales increased.
Operating income	1,268	1,064	19.2%	ﾂｷOperating income increased as a result of the Company's efforts to reduce costs and boost productivity.
Ordinary income	1,171	1,007	16.2%
Current net income	621	640	(2.9)%
Sales by product
Indicator related products	14,597	12,664	15.3%	-Sales of combination meters decreased due to fewer vehicle models being equipped with the products . ﾂｷThe number of vehicles being equipped with automobile clocks as a single unit is on the decrease because more clocks are being built into systems. However, the Company launched production of single-unit clocks for vehicles at Dongguan Jeco Co., Ltd. in China, and started delivering them to automakers. As a result, the sales of the automotive clocks increased slightly. -Sales of display system products increased significantly because the number of vehicles equipped with accessory meters increased. Sales of air-conditioner panels rose, as they are increasingly being used. Collaboration with partners was strengthened as well.
Motor related products	6,933	6,807	1.8%	- Sales in this sector increased because sales of motors for electronic throttles increased substantially, as a result of an increase in the numbers of vehicle models being equipped with these motors. This was in spite of a decrease in sales of motors for ABSs.
Other automotive products	2,764	2,504	10.4%	- Sales of current sensors increased because the number of vehicles being equipped with the sensors increased significantly.

Challenges for FY2007
- The Company will support its existing facilities in The Philippines at Jeco Autoparts Philippines, Inc.; and in China at Dongguan Jeco Co., Ltd., which was established in FY 2005, so that they can both become profitable on their own.

R&D

R&D expenses in FY2006 totaled 612million JPY (2.5% of total sales).

- R&D was mainly conducted to develop technology in order to gain a competitive edge in the area of automotive clocks, display system products such as air-conditioner panels, and sensors.

Investment Activities

Capital Investment
A capital investment of 2,096 million JPY in FY 2006 was made mainly to develop products at its automobile parts business for new-vehicle models.

New facility

Name Location	Type of facility	Planned investment amount (million JPY)	Start	Finish	Production capacity increase on completion
Jeco Co., Ltd. Headquarters/ Plant (Saitama Pref., Japan)	Automobile parts assembly facility	1,914	2006.10	2008.03	Slight increase
	Dies and tools	381	2006.10	2008.03	Slight increase
	Facility except production facility	620	2006.10	2008.03	Slight increase
Nagano Jeco Co., Ltd. Headquarters/ Plant (Nagano Pref., Japan)	Automobile parts assembly facility	239	2006.10	2008.03	Slight increase