Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of Change (%)	Factors
Sales	94,861	132,949	(28.6)	1)
Operating profit	2,759	8,274	(66.6)	-
Ordinary profit	2,372	8,963	(73.5)	2)
Net profit	1,171	7,156	(83.6)	-

Factors
1)
Control cables
-Sales of control cables decreased in both Japan and North America.

Window regulators
-Sales of window regulators to Korean and North American automakers decreased.

<Japan>
-Sales dropped 33.9 percent year-on-year due to a large fall in vehicle production in Japan.

<North America>
-Impacted by production stoppages at plants of U.S. automakers, its major customers, sales decreased 29.3 percent year-on-year.

<Asia>
-Sales declined 15.3 percent year-on-year. Although the Chinese and Indian automotive markets plummeted at one time, they quickly recovered so that? the yearly sales in the region were prevented from dropping more sharply.

<Others>
-Sales fell 40.5 percent year-on-year in "other regions". Some of the major factors behind the decrease were the company's major customers ceasing production, as well as the company reducing its production volume and adjusting its inventories in countries including the U.K.

2)
-Losses incurred from negative foreign currency translation totaled 1,186 million yen.

Reinforcement of Business Structure

-The Company is strengthening activities for fostering suppliers. In Japan, several groups consisting of suppliers dedicated to various products in such areas as wires, stamping parts and plastic moldings, will be organized to help them exchange their successful experiences and expertise across industries for quality improvement. Overseas, mainly in Asia, the Company is giving training and assistance to suppliers of low production costs so that they can heighten their quality levels to those of Japanese companies with the aim of achieving a 100 percent localization rate and global universal quality. Based on universal quality established globally the Company has an intention of responding to the volatile currency fluctuation more flexibly. This is part of the project to raise local purchasing rate by expanding quality improvement activities it has been conducting among its own plants to outside suppliers. (From an article in the Nikkan Jidosha Shimbun on Mar. 17, 2009)

Major Plans for Fiscal Year 2010 and After

1. China
1）The Company established Changchun Hi-Lex Auto Cable System Co. Ltd. In January 2010, the new subsidiary started producing products for customers located in northeast China.

2. Korea
Daedon Hi-Lex started building a new plant in Kwangju. (Operations are scheduled to start in April 2010.)

Outlook for FY2010

(in millions of JPY)

	FY2010	FY2009	Year-on-year increase (decrease)
Sales	98,600	94,861	3,739
Operating income	5,670	2,759	2,911
Ordinary income	5,800	2,372	3,428
Net income	3,710	1,171	2,529
Investment Expenditure	3,332	3,962	630

 

Breakdown of Sales by Location

(in millions of JPY)

	FY2010	FY2009
Japan	50,600	47,802
North America	28,000	29,828
Asia	32,000	28,243
Others	3,600	3,463
Total	114,200	109,338
Consolidated elimination	(15,600)	(14,476)
Consolidated	98,600	94,861

 

Sales and Operating Income at Major Subsidiaries

	FY2010		FY2009
	Sales	Operating income	Sales	Operating income
Hi-Lex America Inc. (in thousand dollars)	87,263	3,497	81,520	(576)
Hi-Lex Controls (in thousand dollars)	195,074	4,875	189,948	296
Hi-Lex Mexicana (in thousand dollars)	64,043	1,872	64,401	(869)
Hi-Lex Cable System (in thousand pounds)	18,975	373	15,825	(1,898)
TSK (Korea) Co., Ltd. (in million won)	42,906	11,076	29,830	7,091
Daedong Hi-Lex Inc. (in million won)	81,371	2,610	57,876	1,912
Chongqing Hi-Lex Cable System Group Co. Ltd. (in million yuan)	518,006	46,846	590,475	61,304
Chongqing Hi-Lex Control Cable System Co. Ltd. (in million yuan)	95,291	14,633	78,732	14,195
Guangdong Hi-Lex Cable System Co. Ltd. (in million yuan)	250,994	12,624	186,339	4,152
Yantai TSK Cable System Inc. (in million yuan)	115,969	5,942	103,750	3,850
PT. Hi-Lex Indonesia (in million rupiah)	520,581	71,816	445,667	48,514
Hi-Lex India (in Rs. Million)	1,087.4	32.6	913.8	34.3

 

R&D at Major Subsidiaries

	FY2010	FY2009
Hi-Lex America Inc. (in thousand dollars)	1,000,000	300,000
Hi-Lex Controls (in thousand dollars)	2,220,000	2,850,000
Hi-Lex Mexicana (in thousand pesos)	730,000	1,470,000
Hi-Lex Cable System (in thousand pounds)	788	695
TSK (Korea) Co., Ltd. (in million won)	846	611
Daedong Hi-Lex Inc. (in million won)	8,014	2,954
Hi-Lex India (in Rs. Million)	162	148
Hi-Lex Kanto (in million yen)	38	1
Hi-Lex Saitama (in million yen)	24	69
Hi-Lex Shimane (in million yen)	41	31
Izushi Cable (in million yen)	11	48

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	701	1,035	1180

R&D Activities

-In order to support automakers' initiatives to engineer lighter vehicles, the company is working on developing lightweight inner cables and outer casings made of nonferrous metals and plastics.

<SPI-LAX cables>
-Hi-Lex's SPI-LAX cables with hollow urethane tubes provide a superior level of noise insulating capability. They can be used also in sunroof systems made of plastics.

<Rail-less window regulators>
-Hi-Lex Controls Inc., the Company's U.S. subsidiary, developed rail-less window regulators that eliminate the need for guide rails. These rail-less window regulators weigh only 300g ( excluding motor weight), which is only half the weight of conventional window regulators with guide rails. These more simple regulators also can be installed more easily on doors.

Future Development Programs

(starting from the fiscal year ending in Oct. 2011 and after)
New products and technologies
-Cable-less technologies for electronic and electric products
Power slide door systems
Power lift gate systems
Power assist parking brakes
Power automatic transmissions
Manual transmissions

-New technologies
Irregularly shaped inner cables
New-design geared wires
Splitter seat cables
Lower end drive window regulators

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	3,962	7,990	6,912

-The spending was centered on introducing and renewing production machinery and tools at each plant.
-During FY2009 at Chongqing HI-Lex Cable System Group Co., Ltd., the Company completed a new factory and also a project involving the installation of new equipment. It also finished building a new factory at Guangdong Hi-Lex Cable System Co. Ltd.

Investments by Segment

(in millions of JPY)

	FY2009	FY2008	FY2007
Control Cable Division
Japan	285	779	623
North America	157	323	637
Asia	964	757	485
Europe	N.A.	197	677
Window Regulator Division
North America	273	1,250	2,146
Asia *	711	864	890

*Investment was focused on China and Korea

Capital investment plans for FY2010

Company name	Business segment	Type of project	Planned total investment (in million yen)	Project period		Capacity increase upon completion
				From	To
Changchun Hi-Lex Auto Cable System Co. Ltd. (Jilin, China)	Control cables, window regulators, etc.	New plant and new facility	314	Jan. 2008	Jan. 2010	-