FALTEC Co., Ltd. Business report FY2007

Business Highlights

Financial overview

in million JPY

FY2007 FY2006 Rate of Change (%) Factors


Sales 84,721 80,520 5.2 -
Operating Income 2,100 1,476 42.3 -Productivity improvements achieved at its plants in Japan resulting from its "HPS Activities" which are aimed at achieving synchronized production 
-Benefits gained from the recovery in earnings at its Group companies in Japan and overseas 
Ordinary income 1,952 1,583 23.3 -Though the Company reported interest expenses in the amount of 254 million yen as a major non-operating expense. 
Current net income 1,365 891 53.1 -The Company posted an extraordinary profit of 597 million yen that included a gain of 565 million yen realized from the sale of fixed assets.
-It reported an extraordinary loss of 596 million yen, which included a 214 million yen loss incurred through the Company's reorganization plan, which went into effect on October 1, 2007. 
Automotive parts division
Sales 42,411 39,853 6.4 -Sales increased year-on-year, supported by a greater volume of car production in Japan. The rise was also attributed to a rise in sales at the Company's U.K. subsidiary in Europe, where its customers stepped up their production volume.  
Operating Income 1,457 1,085 34.3 Operating income went up year-on-year as a result of the following factors:  
- The Company implemented the HPS program, a streamlining initiatives at all domestic facilities.   
- Hashimoto Limited, the Group's U.K. subsidiary, became profitable after receiving technical support from headquarters. 

<Domestic business in Japan>
Reorganizing the business structure
In October 2007, the Group restructured its business. FALTEC Co., Ltd. absorbed the auto parts business of Altia Hashimoto Co., Ltd., reorganizing itself from a pure holding company of the Group into a holding corporation that produces and sells car components. Altia Hashimoto Co., Ltd. also made a new start by absorbing Orion Techno Co., Ltd., its manufacturing subsidiary, and adopted a new name, Altia Co., Ltd. Altia will focus on manufacturing and selling machinery and devices used in car maintenance and production.

Delisting of shares 
In November 2007, M.H. Investment Ltd. acquired shares in the Company through a tender offer. As the amount met the criteria for delisting, the Company's stock was delisted from the second section of the Tokyo Stock Market.

New joint-venture company 
The Company announced that it has entered into a joint venture agreement with Ishikawa Metal Finishing Co., Ltd., Ishikawa Yamaguchi Co., Ltd., and EST. Co., Ltd.. The Company, by establishing a joint venture in Kitakyushu City, Fukuoka Pref. to operate plastic plating business specialized in automobile exterior parts to bolster its competitive edge in Kyushu area where automobile/automotive businesses have been heavily concentrated and enhance its operations in the region. The joint venture "Ishikawa Faltec Co., Ltd.", a manufacturer of plastic plated automobile exterior components, is scheduled to be established as of April, 2008. The new company will be capitalized at 49.75 million yen and a 49% stake will be held by the Company. (From a press release on Dec. 12, 2007)

<New mid-term business plan>
Faltec Challenge 830 (Term: FY2007 to FY2009)
Financial targets in FY2009 Sales: 83 billion yen, Operating profit: 3 billion yen, Ordinary profit 2.8 billion yen, Net profit 1.5 billion yen, ROE: over 10 percent