November 6, 2009 Nihon Dempa Kogyo Co., Ltd. 2nd Quarter Consolidated Financial Results Tokyo, November 6, 2009 – Nihon Dempa Kogyo Co., Ltd. today announced its consolidated business results for the six months ended September 30, 2009, the 2nd quarter of the fiscal year ending March 31, 2010. The following summary of the business results and the attached financial statements are unaudited and prepared in accordance with Japanese GAAP. 1. Consolidated Financial Results for the Six Months Ended September 30, 2009 (April 1, 2009 - September 30, 2009) (Millions of Yen, Figures less than a million yen are omitted) Six months ended September 30, Year ended March 31, (1) Results of Operations 2008 2009 2009 Net sales 35,625 25,926 59,170 Operating income/(loss) 937 3,489 (6,908) Ordinary income/(loss) 1,025 3,308 (7,144) Net income/(loss) 698 2,912 (28,873) Earnings per share (Yen) 35.61 148.35 (1,470.82) Earnings per share, diluted (Yen) 29.01 141.16 Note: Weighted-average number of shares outstanding during the period: 19,631 thousand shares for the six months ended September 30, 2008; 19,630 thousand shares for the six months ended September 30, 2009; 19,630 thousand shares for the fiscal year ended March 31, 2009 September 30, March 31, (2) Financial Position 2008 2009 2009 Total assets 93,526 63,129 67,632 Net assets 51,634 22,669 20,399 Owners' equity to total assets 55.2% 35.9% 30.2% Owners' equity per share (Yen) 2,630.23 1,154.81 1,039.17 Note: Number of shares outstanding: 19,630 thousand shares as of September 30, 2008; 19,630 thousand shares as of September 30, 2009; 19,630 thousand shares as of March 31, 2009 (3) Change in Scope of Consolidation There was no significant change in scope of consolidation for the six months ended September 30, 2009. 2. Consolidated business forecast for the Fiscal Year Ending March 2010 (April 1, 2009 - March 31, 2010) (Millions of Yen) Year ending Forecast of Operations March 31, 2010 Net sales 51,500 Operating income 4,200 Ordinary income 3,600 Net income 3,500 Earnings per share (Yen) 178.30 There was change in figures of the consolidated earnings forecast for the fiscal year ending March 2010 from the previous announcement dated on May 11, 2009. Note: The estimates showing above are based on information available to the Company on the date of the report's announcement. Due to the unforeseen circumstances, actual results may differ from such estimates. 1 Consolidated Balance Sheets November 6, 2009 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) September 30, Composition September 30, Composition March 31, Composition 2008 % 2009 % 2009 % ASSETS Current assets: Cash on hand and bank deposits 10,570 9,658 11,117 Notes and accounts receivable-trade 17,980 13,770 11,548 500 1,000 4,500 Finished products 6,796 4,346 2,912 Work in process 1,482 1,213 809 Raw materials and supplies 2,416 2,208 1,096 Others 3,686 1,706 5,153 Allowances for doubtful receivables (103) (104) (198) Short-term investments Total current assets 43,329 46.3 33,799 53.5 36,939 54.6 Noncurrent assets: Property, plant and equipment, net Buildings and structures 11,202 10,924 10,596 Machinery and vehicles 22,185 6,255 6,373 9,293 7,729 9,146 42,682 24,910 26,115 13 10 12 758 524 645 772 535 657 6,743 3,884 3,919 Others Total property, plant and equipment, net Intangible assets Goodwill Others Total intangible assets Total investments and other assets Total noncurrent assets 50,197 53.7 29,330 46.5 30,692 45.4 Total assets 93,526 100.0 63,129 100.0 67,632 100.0 2 Consolidated Balance Sheets Nihon Dempa Kogyo Co., Ltd. November 6, 2009 (Millions of Yen, Figures less than a million yen are omitted) September 30, Composition September 30, Composition March 31, Composition 2008 % 2009 % 2009 % LIABILITIES Current liabilities: Notes and accounts payable-trade 7,368 6,349 5,022 Short-term loans 4,428 7,773 6,233 Current portion of long-term loans 3,637 4,179 4,579 329 283 242 - 640 851 6,605 3,602 5,716 Income taxes payable Provisions for settlement for products sold Others Total current liabilities 22,369 23.9 22,829 36.2 22,646 33.5 Noncurrent liabilities: Convertible bonds 9,157 252 5,224 Long-term loans 7,477 13,127 16,147 Employee benefit obligations 2,254 2,505 2,320 614 545 628 - 959 - 20 239 265 Retirement allowance for directors and statutory corporate auditors Provisions for settlement for products sold Others Total noncurrent liabilities 19,523 20.9 17,629 27.9 24,586 36.3 Total liabilities 41,892 44.8 40,459 64.1 47,232 69.8 NET ASSETS Owners' equity: Share capital 10,649 10,649 10,649 Capital surplus 10,829 10,828 10,828 Retained earnings 32,742 5,590 2,678 Treasury stock (2,784) (2,784) (2,784) Total owners' equity 51,436 55.0 24,284 38.5 21,372 31.6 Fair value reserve, translation reserve and others: Fair value reserve for available-for-sale investment securities Foreign currency translation reserve 155 195 137 42 (1,810) (1,111) Total fair value reserve, translation reserve and others Total net assets 197 0.2 (1,615) (2.6) (973) (1.4) 51,634 55.2 22,669 35.9 20,399 30.2 Total liabilities and net assets 93,526 100.0 63,129 100.0 67,632 100.0 3 Consolidated Statements of Income Nihon Dempa Kogyo Co., Ltd. November 6, 2009 (Millions of Yen, Figures less than a million yen are omitted) September 30, 2008 Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income/(loss) Non-operating income Interest income Dividends income Gain on redemption of convertible bonds Gain on retirement of convertible bonds Other income Non-operating expenses Interest expenses Depreciation for inactive fixed assets Other expenses Ordinary income/(loss) Extraordinary income Gain on sales of property, plant and equipment (“PPE”) Reversal of allowances for doubtful receivables Reversal of retirement allowance for directors and statutory corporate auditors Reversal of provisions for settlement for products sold Settlement received Government grants Extraordinary expenses Loss on disposal of PPE Loss on impairment of PPE Loss on impairment of investment securities Loss on impairment of golf club memberships Early retirement benefits Settlement for products sold Income/(loss) before income taxes Current tax expenses Refund of income taxes Deferred tax expenses/(benefits) Net income/(loss) 35,625 28,442 7,182 6,245 937 325 104 14 82 124 237 95 73 67 1,025 13 Composition September 30, % 2009 100.0 79.8 20.2 17.5 2.7 0.9 0.7 2.9 0.0 25,926 17,722 8,203 4,713 3,489 274 25 12 36 65 133 455 177 237 39 3,308 407 Composition March 31, % 2009 100.0 68.4 31.6 18.1 13.5 1.1 1.8 12.8 1.5 Composition % 59,170 54,309 4,861 11,770 (6,908) 1,015 153 22 275 563 1,250 273 803 173 (7,144) 51 - 50 5 - 55 - - 14 - - 102 - 13 151 53 57 176 7 984 15 9 46 18,330 178 16,441 0.4 3.8 23 - 199 16 - 27 887 365 (177) 698 959 2,731 187 (170) (198) 2,912 239 1,243 (25,423) 437 (439) 3,452 (28,873) 2.5 1.0 (0.5) 2.0 4 10.5 0.7 (0.6) (0.8) 11.2 100.0 91.8 8.2 19.9 (11.7) 1.7 2.1 (12.1) 0.1 31.0 (43.0) 0.7 (0.7) 5.8 (48.8) Consolidated Statements of Cash Flows Nihon Dempa Kogyo Co., Ltd. November 6, 2009 (Millions of Yen, Figures less than a million yen are omitted) September 30, September 30, March 31, 2008 2009 2009 Operating activities: Income/(loss) before income taxes Depreciation and amortisation Loss on impairment of property, plant and equipment (“PPE”) Interest and dividends income Interest expenses 887 2,731 (25,423) 4,690 1,900 9,015 57 9 16,441 (118) (37) (175) 95 177 273 Gain on redemption of convertible bonds - (36) - Gain on retirement of convertible bonds - (65) (275) Gain on sales of PPE Loss on disposal of PPE Settlement for products sold Reversal of provisions for settlement for products sold - (50) (5) 53 15 178 - 959 1,243 - (102) - (Increase)/decrease in trade receivables (238) (2,596) 5,852 (Increase)/decrease in inventories (853) (3,088) 4,826 Decrease in consumption tax/ value-added tax receivables Increase/(decrease) in trade payables 884 680 298 (303) 1,787 (2,256) Other, net (139) (104) (754) 5,014 2,179 9,239 Sub-total Interest and cash dividends received Interest paid Income taxes refunded/(paid), net Payment for settlement for products sold 84 28 117 (86) (190) (260) (1,551) 956 (2,129) - (92) (587) 3,461 2,880 6,379 (7,613) (3,466) (11,509) 6 96 8 (154) (31) (226) (4) (3) (7) Purchase of investments in subsidiaries (165) - (165) Purchase of trust beneficiary right Net cash provided by operating activities Investing activities: Purchase of PPE Proceeds from sales of PPE Purchase of intangible assets Purchase of investment securities (895) (25) (1,427) Proceeds from redemption of trust beneficiary right 401 292 1,567 Other, net (25) 70 (41) (8,449) (3,067) (11,802) Net cash used in investing activities 5 Consolidated Statements of Cash Flows Nihon Dempa Kogyo Co., Ltd. November 6, 2009 (Millions of Yen, Figures less than a million yen are omitted) Financing activities: Net increase in short-term loans September 30, September 30, March 31, 2008 2009 2009 2,927 1,886 4,790 Proceeds from long-term loans 5,000 - 15,200 Repayment of long-term loans (877) (3,420) (1,464) (0) (0) (0) (488) (1) (978) - (3,050) - (1,953) - (7,482) Purchase and sales of treasury shares, net Cash dividends paid Redemption of convertible bonds Payment for retirement by purchase of convertible bonds Payment for repayment of lease obligations Net cash (used in)/provided by financing activities Net effect of currency translation on cash and cash equivalents - (5) - 4,608 (4,592) 10,063 116 (179) (356) (263) (4,958) 4,283 Cash and cash equivalents at beginning of year 11,333 15,617 11,333 Cash and cash equivalents at end of period 11,070 10,658 15,617 Net (decrease)/increase in cash and cash equivalents 6