Financial Overview

(in million JPY)	FY2006	FY2005	Rate of Change (%)	Factors
Overall
Sales	82,641	68,277	21.0	The Company posted record-high sales, thanks to favorable business at its stamping and resin products division, and the valve segment.
Ordinary income	4,475	3,439	30.1	Ordinary income marked a record-high figure, supported by increased sales at the Company and its North American subsidiary making stamping products.
Current net income	3,144	1,147	174.0	-
Stamping/resin product business
Sales	60,308	51,392	17.3	Japan: Sales at the stamping and resin products business increased year-on-year, thanks to greater production volume at its major customers, and changes in the vehicle-model mix.  Overseas:  Although car production volume declined in Taiwan, overall sales rose due to the launch of resin parts production operations and increased business at the Company's U.S. subsidiary.
Operating income	1,918	1,660	15.5	-
Valve product business
Sales	21,629	16,246	33.1	Sales rose year-on-year, thanks to increased sales of  tire valves and valve cores. Sales of TPMSs (tire pressure monitoring systems) were also greater than those of last year, following a capital investment project, which allowed the Company to support more vehicle models.
Operating income	1,906	1,390	37.1	-

Domestic business
- In June 2006, the Company announced that it will build a new plant in Kyushu in order to supply more products to Toyota Motor Corporation and other automakers, which are increasing car production in the area. 
- In October 2006, the Company decided to augment production of TPMSs (tire pressure monitoring systems).  

>>> See Capital Investment for more details


Overseas business
The Company announced that it will consolidate two of its wholly-owned subsidiaries in the United States, Pacific Manufacturing OHIO, INC. (PMO) and Pacific Industries Air Controls, INC.(PIA) Both companies are located in Ohio; PMO manufactures stamping products for automotive use while PIA produces a variety of tire valves. The Company intends to integrate its operational management structures in North America for an upgraded efficiency. Two subsidiaries, PMO being a remaining company, will be merged and PIA will consequently be dissolved. (From a press release on Mar. 22, 2006)

R&D activities (FY2006)

Segment	R&D expenses (million yen)	Major activities
Overall	1,012	-
Stamping/resin products business	179	<Engineering Dept., Operating Division No. 1> The department launched mass-production of light-weight resin materials with advanced noise insulation and vibration controlling properties, by integrating nano-technology high-polymer materials, and noise- and vibration-proof silencers made through foam molding technology. The department also developed new products that incorporate ventilation technology, and coating-free decorating technology, which minimize environmental impact.  <Production Engineering Dept., Operating Division No.1> -The department developed an optimum technique for constructing joints used for aluminum sheet materials, and turned this technology into a practical business solution. Engineers at the section designed and introduced general-purpose welding equipment, which withstand different load levels while providing a high level of productivity while making efficient use of space. They also placed emphasis on developing water-based paint in an effort to reduce volatile organic compound emissions.
Valve products business	651	<Engineering Dept., Operating Division No. 2> The department worked on developing technology to reduce both environmental impact and also the weight of tire valve parts. In the area of control equipment products, it  developed new products for air-conditioners that use CO2 as a cooling medium; and fuel-efficient products to meet new energy savings laws. It also developed compact and light-weight micro computer equipment for leisure use.   <Production Engineering Dept., Operating Division No.2> - The department established engineering methods designed to reduce costs when producing automotive control equipment, shifting from cutting operations to cold-forging operations. It already started preparations to turn the technology into practical business solutions. The department also developed stamping methods to produce drivetrain parts for automotive engines, and began making products using the new techniques. <Engineering Dept, TPMS Division> - The department worked on developing next-generation TPMS transmitters for passenger cars, and other related products that reduce environmental impact.
Common	170	- The Company's Technical Center conducted joint research and development activities with industries and academia on basic technology. These development activities included studies to determine the source of sounds in cooling medium circuit and seal mechanisms. The Company is now trying to turn the knowledge obtained through these studies into practical business solutions. Development was also focused on engineering elemental technology for the next-generation TPMSs, resin forming methods that are environmentally friendly, new resin products, and junction technology.

Capital Investment:

	Amount (in million JPY)	Details
Overall	13,486	-
Stamping/resin products business	11,488	Japan: 7,730 million yen The Company focused its capital spending on building a new plant in Kyushu and the No.3 Plant at Higashi Ogaki Plant, and preparing dies for making products for new car models.  Overseas: 3,758 million yen The focus of the spending was on preparing production lines to produce new products; and increasing the production volume of stamping parts in Tianjin, and resin products in North America.
Valve products business	1,950	The Company focused its investment activities on increasing production of TPMSs, and on launching new products.

Domestic Investments
The Company announced a plan to construct new plants in Kurate county, Fukuoka prefecture. Responding to the increasing automobile production in Kyushu area, by automakers including Toyota, the Company intends to meet the needs for quality products and shorter delivery time as well as to reduce logistics cost by building the plants in the area. The manufacturer of pressed body parts and plastic parts for automotive applications supplies its products to the automakers in Kyushu area from its plants in Ogaki area, Gifu prefecture. In the first-phase construction, the company will build a 2,160 sq.m. large plant for plastic parts manufacturing and pressed parts welding to start a full-fledged operation early in 2007. In the second-phase construction to complete by the end of 2007, it will add a 10,000 sq.m. plant for pressed body parts. Pacific Industries expects to generate yearly sales of approximately three billion yen at the new Kyushu base after the completion of the second-phase construction. (From a story in the Nikkan Jidosha Shimbun on Jun. 06, 2006)

The Company will enhance production capacity of the Tire Pressure Monitoring System (TPMS). Following the introduction of the 4th production line producing TPMS at its Kita-ogaki plant in Anpachi-gun, Gifu prefecture, in August, 2006, the Company will establish the 5th line in 2007. This is in response to a mandatory requirement for installation of tire pressure monitoring systems in the USA, as well as an increasing demand for the product from luxury cars in the domestic market. The Company aims to increase the share of TPMS in the US market from the current 10% to 25% in the medium and long term. (From an article in the Nikkan Jidosha Shimbun on Oct. 04, 2006)

Newly added facilities :

Facility (Location)	Business segment	Purpose	Planned total investment (million yen)	Starting month	Production Capacity after completion
				Planned completion
Pacific Industrial Co., Ltd. Nishi Ogaki Plant (Gifu, Japan)	Stamped and resin products	New products	5,079	Jun. 2006	Production capacity to be increased by 10%.
				Sep. 2008
		Maintenance and renewal etc.	856	Sep. 2006
				Mar. 2009
Pacific Industrial Co., Ltd. Higashi Ogaki Plant (Gifu, Japan)	Stamped and resin products	New products	1,813	Jul. 2006	Production capacity to be increased by 20%.
				Sep. 2008
		Automation	1,790	Jun. 2006
				Sep. 2008
Pacific Industrial Co., Ltd. Yoro Plant (Gifu, Japan)	Stamped and resin products	Production increase, etc	805	Dec. 2006	Production capacity to be increased by 5%.
				Aug. 2008
Pacific Industrial Co., Ltd. Kyushu Plant (Fukuoka, Japan)	Stamped and resin products	New products, etc.	2,671	Aug. 2006	Some operations started in January 2007.
				Apr. 2008
Pacific Industrial Co., Ltd. Kita Ogaki Plant (Gifu, Japan)	Valve products	New products	1,187	Sep. 2006	Production capacity to be increased by 15%.
				Aug. 2008
		Production increase	901	Feb. 2006
				Nov. 2008
		Rationalization, etc.	592	Jan. 2006
				Jun. 2008
Pacific Industrial Co., Ltd. Mino Plant (Gifu, Japan)	Valve products	Rationalization, etc.	155	Nov. 2006	-
				May. 2008
Pacific Industrial Co., Ltd. Headquarters, and others	-	Employee-services facilities	897	Feb. 2007	-
				Sep. 2008
Pacific Industries USA Inc. (Ohio, USA)	Stamped and resin products, and Valve products	New products, etc.	1,678	Jan. 2007	Production capacity to be increased by 10%.
				Dec. 2007
Pacific Valve (Taiwan) Co., Ltd. (Taichung, Taiwan)	Stamped and resin products, and Valve products	New products, etc.	167	Jan. 2007	Production capacity to be increased by 15%.
				Dec. 2007
Pacific Valve Industrial Co., Ltd. (Yangsan, Korea)	Valve products	New products, etc.	20	Jan. 2007	-
				Dec. 2007
Pacigic Industries (Thailand) Co., Ltd. (Chachoengsao, Thailand)	Valve products	New products, etc.	29	Jan. 2007	-
				Dec. 2007
Quingdao Pacific Hongfeng Industrial Co., Ltd. (Quingdao, China)	Valve products	New products, etc.	50	Jan. 2007	Production capacity to be increased by 30%.
				Dec. 2007
Tianjin Pacific Auto Parts Co., Ltd. (Tianjin, China)	Stamped and resin products	New products, etc.	2,315	Jan. 2007	Operations started partly in April, 2007.
				Dec. 2007