Highlights FY2007 (ended Mar. 2008)

Financial Overview

(in million JPY)	FY2007	FY2006	Rate of Change (%)	Factors
Overall
Sales	89,862	82,641	8.7	The Company marked record-high sales thanks to strong sales of stamping, plastic and valve products.
Operating income	3,640	3,902	(6.7)	Operating, ordinary and current net income decreased due to increased depreciation costs as a result of large-scale investment and tax revision, as well as foreign currency translation loss caused by a sharp hike in the yen.
Ordinary income	3,976	4,475	(11.1)
Current net income	2,335	3,144	(25.7)
Stamping/resin product business
Sales	63,024	60,308	4.5	In Japan, sales increased as a result of increased production volume and change in model mix at major customers. Outside Japan, despite the adverse effect caused by a decrease in the number of consolidated subsidiaries, sales increased due to expansion of operations and production launch at a subsidiary in Tianjin, China.
Operating income	1,254	1,918	(34.6)	Operation income decreased due to increased depreciation costs, etc. as a result of large-scale investment and tax revision, which offset the increased profit at subsidiaries.
Valve product business
Sales	26,085	21,629	20.6	While sales of tire valves, valve cores, and valve related products remained unchanged from the previous year, sales of TPMS (Tire Pressure Monitoring System)  products  significantly increased as products were installed in a greater range of models. This contributed to a sales increase in the valve product business.
Operating income	2,314	1,906	21.4	-

-Enhancing production capacity

The Company will increase production capacity of the Tire Pressure Monitoring System (TPMS) by 60% compared to the current level to 16 million units per year. It will invest approx. 900 million yen in the Kita-Ogaki Plant, its TPMS manufacturing plant at Godo-cho, Gifu Prefecture, to add two production lines.

The Company will establish a 3rd plant at its Higashi Ogaki Plant with a capital investment of  about 2.3 billion yen. Construction of the new plant will be completed in April 2008.

The Company's stamping parts production company, Tianjin Pacific Auto Parts Co., Ltd.., started production in may 2007. In addition, the Company  revealed its plan to double production capacity in 2009. 

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-Increasing investment in a Korean subsidiary (subsidiary of subsidiary)

In July 2007, the Company announced that it would underwrite allocation of new shares to a third party for its subsidiary 's subsidiary in Korea, Pacific Air Controls Co., Ltd. The Company aimed to strengthen the capital base as well as to expand business with capital investment. Pacific Air Controls is a wholly-owned subsidiary of the Company's consolidated subsidiary, Pacific Valve Co., Ltd., and produces and sells air conditioning parts. The capital increase amounted to 3,000 million won and was planned for completion in September 2007. The Company would hold 60% and Pacific Valve 40% of total shares in Pacific Air Control after the capital increase. (Press release, Jul. 31, 2007)

-Restructuring business in U.S.A.

In April 2007, Pacific Manufacturing Ohio, Inc. merged Pacific Industries Air Controls, Inc. The Company implemented a unified management structure for its North American business to increase business efficiency.

In August 2007, the Company sold part of its shares in Takumi Stamping Texas Inc. Takumi Stamping was excluded from the Company's equity method affiliates.

R&D Structure

The Company promoted R&D of new products as well as reduction of e initial costs through innovation of processing methods mainly at Development Headquarters and facility related development departments.. It also works on developing new technologies through collaborative development with customers, material manufacturers, universities, and research institutions if necessary.

R&D Expense

(in million JPY)	FY2007	FY2006	FY2005
Overall	926	1,012	899
Stamping/resin products business	163	179	134
Valve products business	518	651	607
Common	234	170	151

R&D activities (FY2007)

Business segment	Major activities
Stamping/resin products business	Technology Headquarters/Technology Department: -The Company worked to develop products  employing decorating technology without coating processes to reduce the effects on the environment. It also put much effort into developing new low-cost plastic materials.  Operation Department No.1/Production Engineering Department: -In order to respond to increased orders for oil pans from major customers as well as production transfer, the Company worked to install a production line for oil pans and start mass production of products using new stamping method.
Valve products business	Technology Headquarters/Technology Department: -The Company worked to develop tire valve related products which used less environmental unfriendly materials and had less weight.   -The Company focused on developing new control equipment related products and improving performance of such products, aiming at revision of the Rationalization in Energy Use Law. Technology Headquarters/TPMS Technology Department: -The Company launched development to expand specifications of transmitters of TPMS (Tire Pressure Monitoring System) products. It also promoted development of next generation transmitters in consideration of future market expansion and reduction in use of environmentally unfriendly materials. Operation Department No.2/Production Engineering Department: -The Company worked to develop production methods to improve net shape rate (reduce the amount of materials used). It also put much effort into developing production methods and preparing production in order to increase the number of items of high-precision stamping products.
Common	Technology Headquarters/Development Department: -The Company worked on conducting research of fundamental technology through industry-academia collaboration. It also conducted research on sensor energy sources, uncovering sealing mechanisms and application to products.  -The Company worked to develop; elemental technology for next generation TPMS, environmental friendly control valves, deepened plastic forming technology, new plastic area;, and new technology in junction areas.

R&D