Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of change(%)	Factors
Overall
Sales	590,704	701,075	(15.7)	-Sales decreased due to a decline in demand as a result of the slump in the automotive and electronics industries; and due to the reluctance of those companies to make capital investments.
Operating income	15,058	59,698	(74.8)	-Income decreased as a result of a substantial sales decline and reduced production levels to maintain appropriate inventory levels.
Ordinary income	10,235	54,448	(81.2)
Net income	(3,016)	27,034	-	-
High-grade Metal Products and Materials
Sales	265,048	292,370	(9.3)	-Sales of dies and tooling materials decreased as a result of the rapid and substantial decline in automobile production.
Operating income	5,735	28,664	(80.0)
Electronics and IT Devices
Sales	137,264	191,907	(28.5)	-Sales of rare earth magnets decreased as a result of the rapid and substantial decline in automobile production, the reluctance of companies to make capital investments, and sluggish sales of electronics components in the third quarter and onward. -Sales of ferrite magnets decreased substantially due to the significant decline in sales destined for automotive use.
Operating income	9,349	20,277	(53.9)
High-grade Functional Components and Equipment
Sales	188,290	222,453	(15.4)	-Sales of high-grade ductile cast iron products decreased due to the worldwide decline in demand for automobiles. -Sales of heat-resistant casting products substantially decreased, especially in North America, due to a decline in demand as a result of sluggish automobile sales. -Sales of aluminum wheels substantially decreased in Japan and North America as a result of the rapid and substantial decline in automobile production.
Operating income	4,238	16,277	(74.0)

Business Restructuring
-The Company announced that it will dissolve Newport Precitocsion, Inc. (NPI), its U.S. sub-subsidiary manufacturing power steering parts, at the end of March 2009. Located in Newport, Tennessee, NPI produces vanes for use in hydraulic power steering systems, targeting the North American market. The Group decided to close NPI due to shrinking demand for these products, as automakers are shifting to electric power steering systems from hydraulic systems. NPI was also hit by the impact of the slowing economy. (From an article in the Nikkan Jidosha Shimbun on Jan. 21, 2009)

Earnings Forecast for the Fiscal Year Ending March 2010

(in millions of JPY)

	FY2008	FY2009	Rate of change(%)
Sales	590,704	460,000	(22)
High-grade Metal Products and Materials	265,048	205,000	(23)
Electronics and IT Devices	137,264	115,000	(16)
High-grade Functional Components and Equipment	188,290	145,000	(23)
R&D Expenditure	13,083	11,700	(14)

R&D

Capital Expenditure

(in millions of JPY)

Segment	FY2008	FY2007	FY2006
High-grade Metal Products and Materials	20,128	22,052	14,101
Electronics and IT Devices	12,743	13,350	13,773
High-grade Functional Components and Equipment	8,707	10,704	7,384
Service and Others	1,993	3,079	1,234
Consolidated elimination	197	142	295
Group	43,768	49,327	36,787

Capital Investment Projects in FY2008

Segment	Objective of the investment
High-grade Metal Products and Materials	Installing large forging equipment to make tooling steel; and establishing production facilities outside Japan for manufacturing mill rolls
Electronics and IT Devices	Rationalizing the level at which production capacity should be expanded for rare earth magnets in order to meet growing demand in the automotive industry, which increasingly needs to become eco-friendly.
High-grade Functional Components and Equipment	Rationalizing the level at which production volume should be increased for making aluminum wheels; and rationalization of logistics of casting joints.

Planned Investment Expenditure (FY2009)

(in millions of JPY)

Segment	Planned amount of investment	Objective of the investment
High-grade Metal Products and Materials	7,500	Installing new facilities to produce new products; improving the productivity of existing production lines
Electronics and IT Devices	7,200	Same as above
High-grade Functional Components and Equipment	4,300	Same as above
Service and Others	800	-
Group	19,800	-