The Lead Co., Inc. Business report FY2006

Business Highlights

Financial overview
In million yen FY2006 FY2005 Rate of Change (%) Factors
Sales 10,453 11,058 (5.5) -In the the first half of FY2006, orders the Company won at the Automotive parts sector increased steadily; in the second half, however, the orders decreased due to automakers, the Company's major customers, shifting production to new vehicle models. As a result, sales were 9,576 million yen (a 2.5% decrease year-on-year).
- The decreased sales were also the result of the Company withdrawing from the automotive climate-control business.
Ordinary income 235 338 (30.5) -Ordinary income decreased due to preparation costs incurred to produce products for new orders the Company won at the automotive parts sector.
-The decline in the income also stems from the fact that the Company increased the amount of liability reserves to 34 million yen, in the event of losses by customers to whom its business segments sold products. 
Current net income 71 308 (76.8) -The decrease in current net profit was attributed to the decline in current earnings. In addition to this factor, the decrease also stems from the fact that the Company reversed 41 million yen, which it had been accumulating as deferred income taxes during the previous fiscal year; and posted 108 million yen as a gain on terminating its tax-qualified pension program.

Challenges for FY2007
- To expand sales by reinforcing the in-house products division (electronics devices and roadside lamps), and increase the cost-to-sales ratio of the division. 

- As to automotive parts, to improve existing technologies and the competitiveness of product Q/C/D, as well as to promote research on new technologies.
- To enhance technical capabilities in the areas of development and production, and aim to become a solutions company capable of producing  more cost-effective and attractive products by taking advantage of its integrated production structure, from development up to plating, resin molding, painting and assembly.
- To focus on fostering qualified human resources and enhancing production facilities.

*Enhancement of production facilities: The Plant reorganization plan, which started in April 2005, is in progress as planned, with the two large resin molding machines that were installed in the fiscal year that ended March 2007 running smoothly. Moreover, in order to be capable of handing just-in-time delivery and rationalize its in-house physical distribution network, the Company constructed a new multiple-purpose warehouse as well as new paint booth.
- To further enhance and develop its management system that of course emphasizes internal control but also quality and environmental conservation as well.


R&D expense for FY 2006 was 9 million yen.

To improve the quality of its auto-exterior products in terms of their appearance, the Company worked on developing new production methods, new materials, and new decorating technology. By leveraging various analysis technologies, it also worked on developing new products based on digital technology; reducing both costs and the weight of products, shortening development lead-time, and mass-producing parts.

Investment Activities

Major capital investments for FY2006 were;
- 528 million JPY for die related facilities to manufacture products for new orders received.
- 769 million JPY for automotive parts related manufacturing facilities.
- 236 million JPY for offices for rent

Main new facilities
Type of facility Planned investment amount
(000 yen
Start/ Planned completion Production capacity on completion
Head office plant
(Kumagaya-Shi, Saitama Pref., Japan)
Manufacturing facilities for auto parts 340,000 Apr. 2007/ Mar. 2008 No significant change, as investment is mainly to reduce manpower and to streamline
Die related facilities for auto parts 370,000 Apr. 2007/ Mar. 2008 Dies for new product manufacturing