January 30, 2007 Nihon Dempa Kogyo Co., Ltd. 3rd Quarter Consolidated Financial Results Tokyo, January 30, 2007 – Nihon Dempa Kogyo Co., Ltd. today announced its consolidated business results for the nine months ended December 31, 2006, the 3rd Quarter of the fiscal year ending March 31, 2007. 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, 2006 (April 1, 2006 - December 31, 2006) (Millions of Yen, Figures less than a million yen are omitted) Nine months ended December 31, (1) Results of Operations Net sales Operating income Ordinary income Net income Earnings per share (Yen) Earnings per share, diluted (Yen) 2006 54,869 7,355 6,664 3,806 191.10 181.55 2005 47,028 3,452 3,452 2,575 129.26 129.17 Year ended March 31, Change 16.7% 113.0% 93.1% 47.8% December 31, (2) Financial Position Total assets Net Assets Owners' equity to total assets Owners' equity per share (Yen) 2006 88,647 48,327 54.4% 2,421.39 March 31, 2006 78,054 44,253 56.7% 2,221.40 2005 77,850 43,577 56.0% 2,187.40 Nine months ended December 31, (3) Conditions of Cash Flows Net cash provided by operating activities Net cash used in investing activities Net cash (used in)/provided by financing activities Cash and cash equivalents at end of period (4) Change in Scope of Consolidation Consolidated subsidiaries (addition) 0 Equity method companies (addition) 0 2006 9,273 (8,222) 3,015 14,433 2006 63,642 5,270 5,183 3,257 163.52 163.26 2005 6,519 (4,594) (2,331) 9,184 Year ended March 31, 2006 9,285 (6,177) (2,613) 10,079 (exclusion) 1 (exclusion) 0 2. Forecast for the Fiscal Year Ending March 31, 2007 (April 1, 2006 - March 31, 2007) Millions of Yen, (1) Results of Operations Year ending March 31, 2007 Net sales 71,000 Operating income 8,400 Ordinary income 8,000 Net income 4,600 Earnings per share (Yen) 230.92 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 January 30, 2007 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) December 31, Composition December 31, Composition March 31, Composition 2006 % 2005 % 2006 % ASSETS Current assets: Cash on hand and bank deposits 14,133 9,184 10,079 Trade receivables 19,809 16,843 16,822 300 - - Inventories 8,506 8,115 8,623 Others 2,949 2,819 3,259 (60) (51) (110) Short-term investments Allowances for doubtful receivables Total current assets 45,639 51.5 36,911 47.4 38,674 49.5 Noncurrent assets: Total property, plant and equipment, net 35,578 33,460 31,711 Total intangible assets 1,472 2,678 2,470 Total Investments and other assets 5,958 4,800 5,198 Total noncurrent assets 43,008 48.5 40,938 52.6 39,379 50.5 Total assets 88,647 100.0 77,850 100.0 78,054 100.0 2 Consolidated Balance Sheets January 30, 2007 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) December 31, Composition December 31, Composition March 31, Composition 2006 % 2005 % 2006 % LIABILITIES AND EQUITY Current liabilities: Notes and accounts payable-trade Short-term loans 6,524 6,156 5,928 720 6,670 6,704 Current portion of long-term debt 3,290 3,309 3,231 Others 7,994 5, 430 5,704 Total current liabilities 18,528 20.9 21,566 27.7 21,569 27.6 Noncurrent liabilities: Convertible bonds 11,308 - - Long-term debt 7,699 9,889 9,417 Employee benefit obligations Retirement allowance for directors and statutory corporate auditors Others 2,195 2,141 2,144 580 548 556 8 44 31 Total noncurrent liabilities 21,791 24.6 12,624 16.2 12,149 15.6 Total liabilities 40,319 45.5 34,191 43.9 33,718 43.2 - - 81 0.1 83 0.1 Minority interests Shareholders' equity: Share capital - 10,649 10,649 Capital surplus - 10,634 10,634 Retained earnings Fair value reserve for available-for-sale investment securities Foreign currency translation reserve - 22,087 22,769 - 928 855 - 562 632 Treasury stock, at cost - (1,284) (1,288) Total shareholders' equity Total liabilities, minority interests and shareholders’ equity Net assets: - - 43,577 56.0 44,253 56.7 - - 77,850 100.0 78,054 100.0 Shareholders' equity Share capital 10,649 - - Capital surplus 10,634 - - Retained earnings 26,118 - - Treasury stock, at cost (1,295) - - Total shareholders' equity 46,107 52.0 - - - - 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 722 - - 1,403 - - 2,126 2.4 - - - - 94 0.1 - - - - Total net assets 48,327 54.5 - - - - Total liabilities and net assets 88,647 100.0 - - - - 3 Consolidated Statements of Income January 30, 2007 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) December 31, Composition December 31, Composition March 31, Composition 2006 % 2005 % 2006 % Cost of sales 54,869 39,141 100.0 71.3 47,028 35,341 100.0 75.1 63,642 47,448 100.0 74.6 Gross profit 15,728 28.7 11,686 24.9 16,194 25.4 Selling, general and administrative expenses 8,373 15.3 8,233 17.6 10,923 17.1 Operating income 7,355 13.4 3,452 7.3 5,270 8.3 221 911 0.4 1.7 281 282 0.6 0.6 330 417 0.5 0.7 Ordinary income 6,664 12.1 3,452 7.3 5,183 8.1 Extraordinary income Extraordinary expenses 131 1,147 0.3 2.1 220 766 0.5 1.6 234 2,095 0.4 3.3 Income before income taxes 5,648 10.3 2,905 6.2 3,322 5.2 Current tax expenses Minority interests 2,252 (416) 5 4.1 (0.7) 0.0 693 (362) (0) 1.5 (0.8) (0.0) 1,089 (1,025) 0 1.7 (1.6) 0.0 Net income 3,806 6.9 2,575 5.5 3,257 5.1 Net sales Non-operating income Non-operating expenses Deferred tax expenses / (benefits) 4 Consolidated Statements of Cash Flows January 30, 2007 Nihon Dempa Kogyo Co., Ltd. (Millions of Yen, Figures less than a million yen are omitted) December 31, December 31, March 31, 2006 2005 2006 Operating activities: Income before income taxes Depreciation and amortisation Interest and dividend income Interest expense (Increase)/decrease in trade receivables (Increase)/decrease in inventories Increase/(decrease) in trade payables Other, net Sub-total Interest and cash dividends received Interest paid Income taxes paid, net Net cash provided by operating activities 5,648 5,284 (109) 126 (2,407) 276 165 1,380 2,905 5,162 (67) 167 159 (519) 241 508 3,322 7,054 (83) 204 (248) (996) 8 2,037 10,363 8,556 11,298 86 67 83 (141) (169) (200) (1,035) (1,935) (1,896) 9,273 6,519 9,285 Investing activities: (7,512) (4,638) (6,056) Purchase of investment securities (506) (306) (408) Other, net (204) 350 286 (8,222) (4,594) (6,177) (5,952) (1,441) (1,119) Purchase of property, plant and equipment Net cash used in investing activities Financing activities: Net decrease in short-term loans Proceeds from long-term debt 1,000 3,400 3,600 Repayment of long-term debt (2,659) (4,009) (4,759) Proceeds from issuing convertible bonds 11,012 - - (386) (281) (333) 3,015 (2,331) (2,613) 288 320 313 (85) 808 Cash and cash equivalents at beginning of year 4,354 10,079 9,270 9,270 Cash and cash equivalents at end of period 14,433 9,184 10,079 Other, net Net cash (used in)/provided by financing activities Net effect of currency translation on cash and cash equivalents Net increase in cash and cash equivalents 5