February 6, 2009 Nihon Dempa Kogyo Co., Ltd. 3rd Quarter Consolidated Financial Results Tokyo, February 6, 2009 – Nihon Dempa Kogyo Co., Ltd. today announced its consolidated business results for the nine months ended December 31, 2008, the 3rd quarter of the fiscal year ending March 31, 2009. 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 Nine Months Ended December 31, 2008 (April 1, 2008 - December 31, 2008) (Millions of Yen, Figures less than a million yen are omitted) Nine months ended December 31, (1) Results of Operations Net sales Operating income/(loss) Ordinary income Net income/(loss) Earnings per share (Yen) Earnings per share, diluted (Yen) 2007 60,379 8,649 8,620 5,882 294.30 263.20 2008 49,377 (35) 387 (8,063) (410.77) - December 31, (2) Financial Position Total assets Net assets Owners' equity to total assets Owners' equity per share (Yen) 2007 92,706 54,225 58.4% 2,701.06 2008 81,270 40,186 49.4% 2,047.15 Year ended March 31, 2008 78,098 9,644 9,734 6,504 326.24 291.53 March 31, 2008 91,413 51,317 56.0% 2,608.29 (3) Change in Scope of Consolidation There was no significant change in scope of consolidation for the nine months ended December 31, 2008. 2. Consolidated business forecast for the Fiscal Year Ending March 31, 2009 (April 1, 2008 - March 31, 2009) (Millions of Yen) Year ending Forecasts of Operations March 31, 2009 Net sales 59,000 Operating loss (3,500) Ordinary loss (3,000) Net loss (11,500) Earnings per share (Yen) (585.82) There was change in figures of forecast for the fiscal year ending March 31, 2009 from the previous announcement dated on October 24, 2008. Note: The estimates shown 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 February 6, 2009 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) December 31, Composition 2007 % December 31, Composition % 2008 March 31, 2008 Composition % ASSETS Current assets: Cash on hand and bank deposits 12,575 11,277 11,333 Notes and accounts receivable-trade 20,926 14,959 17,713 Finished products 5,388 7,373 5,992 Work in process 1,367 1,206 1,456 Raw materials and supplies 2,187 2,388 2,359 Others 4,389 3,047 4,432 (46) (120) (83) Allowances for doubtful receivables Total current assets 46,787 50.5 40,132 49.4 43,205 47.3 Noncurrent assets: Property, plant and equipment, net Buildings and structures 9,731 10,661 10,581 Machinery and vehicles 22,319 13,453 22,170 6,420 8,794 8,201 38,470 32,909 40,953 - 13 - 1,126 686 1,126 Total intangible assets 1,126 699 1,126 Total investments and other assets 6,321 7,528 6,128 Others Total property, plant and equipment, net Intangible assets Goodwill Others Total noncurrent assets 45,918 49.5 41,138 50.6 48,208 52.7 Total assets 92,706 100.0 81,270 100.0 91,413 100.0 2 Consolidated Balance Sheets Nihon Dempa Kogyo Co., Ltd. February 6, 2009 (Millions of Yen, Figures less than a million yen are omitted) December 31, Composition December 31, Composition March 31, Composition 2007 % 2008 % 2008 % LIABILITIES Current liabilities: Notes and accounts payable-trade Short-term loans 7,791 6,472 7,671 - 5,438 1,501 Current portion of long-term loans 1,753 4,002 1,264 Income taxes payable 1,002 259 1,549 90 - 120 - 108 - 7,866 4,835 8,265 Reserve for directors' bonuses Reserve for others Others Total current liabilities 18,503 20.0 21,116 26.0 20,372 22.3 Noncurrent liabilities: Convertible bonds 11,242 5,669 11,225 Long-term loans 5,945 11,343 5,727 Employee benefit obligations Retirement allowance for directors and statutory corporate auditors Others 2,190 2,320 2,169 590 613 592 8 20 8 Total noncurrent liabilities 19,977 21.5 19,967 24.6 19,723 21.6 Total liabilities 38,481 41.5 41,084 50.6 40,096 43.9 NET ASSETS Owners' equity: Share capital 10,649 10,649 10,649 Capital surplus 10,828 10,828 10,829 Retained earnings 31,911 23,488 32,533 Treasury stock (1,208) (2,784) (2,784) Total owners' equity 52,180 56.3 42,182 51.9 51,228 56.0 Fair value reserve, translation reserve and others: Fair value reserve for available-for-sale investment securities Foreign currency translation reserve Total fair value reserve, translation reserve and others Minority interests: 505 165 246 1,420 (2,161) (270) 1,925 2.1 (1,995) (2.5) (24) (0.0) 119 0.1 - - 113 0.1 Total net assets 54,225 58.5 40,186 49.4 51,317 56.1 Total liabilities and net assets 92,706 100.0 81,270 100.0 91,413 100.0 3 Consolidated Statements of Income Nihon Dempa Kogyo Co., Ltd. February 6, 2009 (Millions of Yen, Figures less than a million yen are omitted) Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating income/(loss) Non-operating income Interest income Dividends income Foreign exchange gains Gain on retirement of convertible bonds Other income Non-operating expenses Interest expenses Foreign exchange losses Depreciation of inactive property, plant and equipment (“PPE”) Other expenses Ordinary income Extraordinary income Gain on sales of PPE Reversal of allowances for doubtful receivables Government grants Extraordinary expenses Loss on disposal of PPE Loss on impairment of PPE Loss on sales of investment securities Loss on impairment of investment securities Loss on impairment of golf club memberships Settlement for products sold Income/(loss) before income taxes Current tax expenses Deferred tax expenses/(benefits) Minority interests Net income/(loss) December 31, Composition December 31, Composition March 31, Composition 2007 % 2008 % 2008 % 60,379 43,087 17,292 8,643 8,649 328 176 32 119 356 86 168 100.0 71.4 28.6 14.3 14.3 0.6 0.6 49,377 40,367 9,010 9,045 (35) 973 138 20 382 258 173 550 181 - 100.0 81.8 18.2 18.3 (0.1) 2.0 1.1 78,098 56,854 21,243 11,599 9,644 438 231 32 174 348 116 76 - 265 - 102 8,620 146 18 103 387 13 - 155 9,734 122 22 14.3 0.2 0.8 0.0 27 - - 99 300 75 129 35 13 8,738 65 7,917 - 100 738 144 178 35 0.5 17.7 53 318 49 7 38 7 8,466 2,477 84 21 5,882 398 (8,337) 488 (763) (8,063) 322 9,117 3,057 (470) 26 6,504 14.0 4.1 0.2 0.0 9.7 4 (16.9) 0.9 (1.5) (16.3) 100.0 72.8 27.2 14.9 12.3 0.6 0.4 12.5 0.2 1.0 11.7 3.9 (0.6) 0.1 8.3 Consolidated Statements of Cash Flows Nihon Dempa Kogyo Co., Ltd. February 6, 2009 (Millions of Yen, Figures less than a million yen are omitted) December 31, December 31, March 31, 2007 2008 2008 Operating activities: Income/(loss) before income taxes 8,466 (8,337) 9,117 Depreciation and amortisation Loss on impairment of property, plant and equipment (“PPE”) Interest and dividends income 5,590 7,140 7,786 129 7,917 178 (208) (158) (263) 86 181 116 (18) - (22) 75 65 144 - 398 - (2,325) 1,519 565 Increase in inventories (Increase)/decrease in consumption tax/ value-added tax receivables (447) (1,542) (1,708) 96 656 (391) Increase/(decrease) in trade payables 1,381 (128) 2,224 Other, net (119) (290) 107 12,704 7,422 17,854 Interest expenses Gain on sales of PPE Loss on disposal of PPE Settlement for products sold (Increase)/decrease in trade receivables Sub-total Interest and cash dividends received 152 109 188 Interest paid (84) (180) (113) (3,809) (2,086) (3,887) Income taxes paid, net Payment for settlement for products sold Net cash provided by operating activities - (463) - 8,963 4,800 14,042 (7,195) (9,860) (12,460) 17 6 33 (171) (179) (294) (6) (6) (8) 269 - 269 Investing activities: Purchase of PPE Proceeds from sales of PPE Purchase of intangible assets Purchase of investment securities Proceeds from sales of investment securities Purchase of investments in subsidiaries Purchase of trust beneficiary right Proceeds from redemption of trust beneficiary right Other, net Net cash used in investing activities - (165) - (2,239) (1,161) (2,239) 1,150 1,085 2,298 (17) (33) (34) (8,191) (10,313) (12,435) Financing activities: Net increase/(decrease) in short-term loans (600) 3,936 400 Proceeds from long-term loans - 9,500 - Repayment of long-term loans (2,467) (1,145) (3,175) Purchase of treasury stock (123) (0) (1,704) Cash dividends paid Payment for retirement by purchase of convertible bonds Proceeds from exercise of stock option (907) (847) (998) - (5,253) - 407 - 413 (3,691) 6,188 (5,064) (32) (731) (736) Net decrease in cash and cash equivalents (2,951) (56) (4,193) Cash and cash equivalents at beginning of year 15,526 11,333 15,526 Cash and cash equivalents at end of period 12,575 11,277 11,333 Net cash (used in)/provided by financing activities Net effect of currency translation on cash and cash equivalents 5