July 28, 2005 QUARTERLY REPORT First Quarter ended June 30, 2005 (Results for the Period from April 1, 2005 to June 30, 2005) Performance Outline (Consolidated) Three months ended Three months ended June 30, 2005 June 30, 2004 Results Results Change (Billions of yen) Year ending March 31, 2006 Change Forecast Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income 233.9 218.9 452.9 194.7 37.2 38.0 23.7 233.3 203.2 436.5 189.1 39.3 41.3 24.8 0.3% 7.8% 3.8% 2.9% -5.3% -7.8% -4.7% 999.7 886.3 1,886.0 800.0 160.0 160.0 97.0 2.7% 5.4% 4.0% 6.0% 18.1% 18.2% 16.7% Exchange rate (Yen/US$) Exchange rate (Yen/EURO) 107.60 135.55 109.65 132.17 -2.05 3.38 105.65 131.39 -1.93 -3.86 Net income per share (yen) 32.32 33.69 -1.37 132.16 19.52 Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period 48.3 -36.0 -52.4 144.6 42.2 -10.8 -21.2 215.4 6.0 -25.1 -31.1 -70.8 - - 34.7 15.6 25.5 18.6 15.9 24.3 16.0 -0.3 1.1 114.0 69.0 116.0 29.2 2.2 5.5 Capital expenditures Depreciation for tangible fixed assets R&D expenditures June 30, 2005 Total assets Shareholders' equity Interest-bearing debt Equity ratio (%) Shareholders' equity per share (yen) March 31, 2005 Change 1,899.9 879.6 366.4 1,953.6 862.9 410.0 -53.6 16.6 -43.6 46.3 44.2 2.1 1,198.48 1,175.67 22.81 Ricoh Company, Ltd. * The Company bases the forecast estimates for the fiscal year ending March 31, 2006 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 1 Performance *Overview Consolidated net sales for the first quarter of fiscal 2006 (the three months period from April 1 to June 30, 2005) increased by 3.8% as compared to the previous corresponding period, to ¥452.9 billion. During this quarter, the average yen exchange rates were ¥107.60 against the U.S. dollar (up ¥2.05) and ¥135.55 against the Euro (down ¥3.38). Net sales would rise 3.5% excluding impact of such foreign currency exchange fluctuation. As for Japan, sales of product categories such as PPCs (plain paper copiers), MFPs (multifunctional printers) and laser printers, especially color model, increased. On the other hand, sales of personal computers and PC servers decreased and sales of optical equipments and semiconductor businesses decreased due to sluggish demand or its cycle. Consequently, overall domestic sales increased by 0.3% as compared to the previous corresponding period. As for overseas, sales of product categories such as digital PPCs, color PPCs, MFPs and laser printers increased in each region. Sales in the Americas increased by 11.2% as compared to the previous corresponding period, in spite of yen’s appreciation against the U.S. dollar. Sales in Europe increased by 4.1% with steady growth of sales volume. And sales in other region such as China, Asian and Oceania increased by 11.6%, owing to the growth of MFPs sales. Consequently, overall overseas sales increased by 7.8%. Gross profit increased by 2.9% to ¥194.7 billion owing to increased sales of high-margin, high-value-added products in the Office Solution Business segment and ongoing cost-cutting activities for logistic, manufacturing and so on. In terms of selling, general and administrative expenses, R&D expenses were ¥25.5 billion, up ¥1.1 billion from the previous corresponding period and 5.6% of net sales. A part of expenses was spent for reorganization of domestic bases and restructuring or integration of group companies in Japan and overseas. Consequently, selling, general and administrative expenses increased by 5.1% to ¥157.4 billion. As a result, operating income decreased by 5.3% as compared to the previous corresponding period, to ¥37.2 billion. In terms of other (income) expenses, the interest expense decreased due to the interest-bearing debt reduction, yet Ricoh recorded a gain on sale of certain consolidated subsidiary in the previous corresponding period. As a result, income before income taxes decreased by 7.8% as compared to the previous corresponding period, to ¥38.0 billion. The expanded amount of tax exemption on the R&D expenses and investing in Information Technology caused effective tax rate reduced. As a result, net income decreased by 4.7% as compared to the previous corresponding period, to ¥23.7 billion. 2 *Conditions by Product Line Office Solution Business (Sales up 5.5% to ¥388.0 billion) Sales in the Imaging Solution as our core business increased as compared to the previous corresponding period due primarily to the continuously increase in domestic and overseas sales of color PPCs, MFPs and laser printers. On the other hand, net sales in the Network System Solution decreased as compared to the previous corresponding period due primarily to the decrease in sales of personal computers and PC servers. As a result, net sales in the Office Solution Business increased by 5.5% as compared to the previous corresponding period, to ¥388.0 billion. Imaging Solution (Sales up 7.7% to ¥349.4 billion) - Although domestic sales of digital PPCs decreased due primarily to the shift in customer demands to MFPs from stand-alone products, overseas sales of digital PPCs continued to perform well. - Color PPCs increased by introducing a new series of products to the market in responding to the increase of customer demands. - In response to the demands for high speed, networking and coloration, sales of MFPs continued to increase by offering new product lineups in Japan and overseas. MFPs: Imagio Neo 603 in Japan Aficio 2015 overseas Color MFPs: Imagio Neo C246 in Japan Aficio 2228C/2235C/2245C series overseas - Sales of laser printers continued to increase. - As a result, sales in this category increased by 7.7%. Network System Solution (Sales down 10.8% to ¥38.5 billion) - Sales in this category decreased due primarily to the decrease in sales of personal computers and PC servers. As a result, sales in the Office Solution Business increased by 5.5% as compared to the previous corresponding period. Net operating income in this segment decreased by 1.7% as compared to the previous corresponding period, to ¥48.6 billion. Despite the effect of the sales increase and new product offering, and the continuous cost cutting activities with respect to the improvements on logistics and manufacturing and so on, it was offset by the costs incurred by reorganization and integration of domestic bases and overseas subsidiaries and affiliates. Industry Business (Sales down 11.8% to ¥26.0 billion) Sales in the Industry Business decreased by 11.8% as compared to the previous corresponding period, to ¥26.0 billion. This was due primarily to the decrease in demand and the demand cycle of semiconductor and optical equipments businesses. As a result, net operating loss for this segment was ¥0.5 billion. Other Business (Sales down 1.0% to ¥38.8 billion) Sales in the Other Business decreased by 1.0% as compared to the previous corresponding period, to ¥38.8 billion, due primarily to the decrease of optical discs business in overseas. On the other hand, financing and logistics businesses performed well in profits. As a result, net operating income for this segment increased as compared to the previous corresponding period, to ¥0.9 billion. Note: Effective from this financial period, our business segment is changed into three categories such as "Office Solution", "Industry" and "Other". *Cash Flows (Three months from April 1, 2005 to June 30, 2005) Net cash provided by operating activities increased by ¥6.0 billion as compared to the previous corresponding period, to ¥48.3 billion. It was due to the fact that the decrease of trade receivables and effective control of inventories level despite trade payables decreased. Net cash used in investing activities increased by ¥25.1 billion as compared to the previous corresponding period, to ¥36.0 billion, due primarily to capital expenditures for R&D and production. As a result, free cash flow generated by operating and investing activities decreased by ¥19.0 billion as compared to the previous corresponding period, to ¥12.3 billion. Net cash used in financing activities amounted to ¥52.4 billion due primarily to the repayment of interest-bearing debt such as bonds and the payment of dividend. As a result, cash and cash equivalents at the end of this first quarter decreased by ¥42.2 billion as compared to the end of the preceding fiscal year, to ¥144.6 billion. 3 *Forecast for the entire fiscal year As for the forecast of business results for the fiscal year ending March 31, 2006, we have revised downward our forecast of sales, gross profit, operating income, and income before income taxes from announced in April 2005. This revision reflects the first quarter result, intense market competition, and expected changes of business environment. We, however, intend to maintain our forecast for net income in the current fiscal year. We maintain our exchange rates assumption of ¥105.00 against the U.S. dollar and of ¥130.00 against the Euro in and after the second quarter as announced in April 2005. Compared to the previous fiscal year, on the other hand, we forecast improvement both of sales and income. We believe the fluctuations of market demand and exchange rate will be able to be managed by implementing business strategies, such as the continuous and effective introduction of new products in Japan and overseas. Our performance forecast for fiscal 2006 is as follows: Exchange Rate Assumptions for the full year ending March 31, 2006 US$ 1 = ¥105.65 (¥107.58 in previous fiscal year) EURO 1 = ¥131.39 (¥135.25 in previous fiscal year) (Billions of yen) Domestic sales Overseas sales Net sales Gross profit Operating income Income before income taxes Net income Year ending March 31, 2006 (Forecast) 999.7 886.3 1,886.0 800.0 160.0 160.0 97.0 Year ended March 31, 2005 (Results) 972.9 841.1 1,814.1 754.5 135.5 135.3 83.1 Change 2.7% 5.4% 4.0% 6.0% 18.1% 18.2% 16.7% * Ricoh bases the forecast estimates for the year ending March 31, 2006 above upon information currently available to management, which involves risks and uncertainties that could cause actual results to differ materially from those projected. 4 Ricoh Company, Ltd. and Consolidated Subsidiaries Financial Highlights for the First Quarter Ended June 30, 2005 (U.S. GAAP Financial Information) 1. Items Relating to First Quarter Financial Statements (1) No change in accounting method has been made. (2) No change relating to the scale of consolidation and the application of the equity method has been made. 2. Results for the Period from April 1, 2005 to June 30, 2005 (1) Operating Results Net sales (% change from the previous corresponding period) Operating income (% change from the previous corresponding period) Income before income taxes (% change from the previous corresponding period) Net income (% change from the previous corresponding period) Net income per share-basic (yen) Net income per share-diluted (yen) Three months ended June 30, 2005 452,982 3.8 37,282 -5.3 38,095 -7.8 23,723 -4.7 32.32 - Three months ended June 30, 2004 436,550 -0.2 39,387 2.3 41,319 10.7 24,894 11.4 33.69 - (Millions of yen) Year ended March 31, 2005 1,814,108 1.9 135,506 -9.7 135,383 -5.4 83,143 -9.4 112.64 - June 30, 2005 1,899,986 879,665 46.3 1,198.48 June 30, 2004 1,855,745 812,915 43.8 1,100.24 (Millions of yen) March 31, 2005 1,953,669 862,998 44.2 1,175.67 Three months ended June 30, 2005 48,350 -36,038 -52,430 144,617 Three months ended June 30, 2004 42,268 -10,899 -21,294 215,467 (Millions of yen) Year ended March 31, 2005 132,780 -96,198 -56,439 186,857 Half year ending September 30, 2005 918,000 70,800 71,300 43,000 (Millions of yen) Year ending March 31, 2006 1,886,000 160,000 160,000 97,000 (2) Financial Position Total assets Shareholders' equity Equity ratio (%) Equity per share (yen) Cash Flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at end of period 3. Forecast of Operating Results from April 1, 2005 to March 31, 2006 Net sales Operating income Income before income taxes Net income Note: Net income per share (Consolidated) ¥132.16 In accordance with Japanese regulations, Ricoh has issued forecast for its financial results for the fiscal year ending March 31, 2006. These forecast are forward-looking statements based on a number of assumptions and beliefs in light of the information. 5 Consolidated Performance 1. Consolidated Statements of Income (Millions of yen) Net sales Cost of sales Percentage of net sales (%) Gross Profit Percentage of net sales (%) Selling, general and administrative expenses Percentage of net sales (%) Operating income Percentage of net sales (%) Other (income) expense Interest and dividend income Percentage of net sales (%) Interest expense Percentage of net sales (%) Other, net Percentage of net sales (%) Income before income taxes, equity income and minority interests Percentage of net sales (%) Provision for income taxes Percentage of net sales (%) Minority interests in earnings of subsidiaries Percentage of net sales (%) Equity in earnings of affiliates Percentage of net sales (%) Net income Percentage of net sales (%) Reference : Exchange rate US$ 1 EURO 1 Three months ended June 30, 2005 452,982 258,260 57.0 194,722 43.0 157,440 34.8 37,282 8.2 Three months ended June 30, 2004 436,550 247,379 56.7 189,171 43.3 149,784 34.3 39,387 9.0 685 0.2 1,009 0.2 -1,137 -0.2 603 0.1 1,230 0.3 -2,559 -0.7 38,095 8.4 13,509 3.0 1,226 0.3 363 0.1 23,723 5.2 41,319 9.5 15,919 3.6 1,118 0.3 612 0.1 24,894 5.7 ¥107.60 ¥135.55 ¥109.65 ¥132.17 Change 16,432 10,881 % 3.8 4.4 5,551 2.9 7,656 5.1 -2,105 -5.3 82 13.6 -221 -18.0 1,422 -55.6 -3,224 -7.8 -2,410 -15.1 108 9.7 -249 -40.7 -1,171 -4.7 2-1. Consolidated Sales by Product Category (Millions of yen) Three months ended June 30, 2005 <Office Solution Business> Imaging Solution Business Percentage of net sales (%) Network system Solution Business Percentage of net sales (%) Office Solution Business Total Percentage of net sales (%) <Industry Business> Industry Business Percentage of net sales (%) <Other Business> Other Business Percentage of net sales (%) Grand Total Percentage of net sales (%) Three months ended June 30, 2004 Change % 349,487 77.2 38,586 8.5 388,073 85.7 324,494 74.3 43,251 9.9 367,745 84.2 24,993 7.7 -4,665 -10.8 20,328 5.5 26,078 5.8 29,583 6.8 -3,505 -11.8 38,831 8.5 452,982 100.0 39,222 9.0 436,550 100.0 -391 -1.0 16,432 3.8 Note: Effective from this financial period, our business segment is changed into three categories such as "Office Solution", "Industry" and "Other". Accordingly, information for the previous corresponding period has been reclassified to conform with the current classification. Each category includes the following product line: Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network system Solution Business Personal computers, PC servers, network systems and network related software Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Business Optical discs and digital camera 2-2. Consolidated Sales by Geographic Area (Millions of yen) <Domestic> Percentage of net sales (%) <Overseas> Percentage of net sales (%) The Americas Percentage of net sales (%) Europe Percentage of net sales (%) Other Percentage of net sales (%) Grand Total Percentage of net sales (%) Three months ended June 30, 2005 233,991 51.7 218,991 48.3 87,156 19.2 104,479 23.1 27,356 6.0 452,982 100.0 6 Three months ended June 30, 2004 233,312 53.4 203,238 46.6 78,401 18.0 100,323 23.0 24,514 5.6 436,550 100.0 Change % 679 0.3 15,753 7.8 8,755 11.2 4,156 4.1 2,842 11.6 16,432 3.8 3. Consolidated Balance Sheets Assets June 30, 2005 Current Assets Cash and time deposits Trade receivables Marketable securities Inventories Other current assets Total Current Assets Fixed Assets Tangible fixed assets Finance receivables Other Investments Total Fixed Assets Total Assets Note: Contents of cash and time deposits: Cash and cash equivalents Time deposits March 31, 2005 146,312 589,987 132 170,526 53,790 960,747 188,311 620,568 138 167,365 53,365 1,029,747 -41,999 -30,581 -6 3,161 425 -69,000 262,204 395,273 281,762 939,239 1,899,986 247,410 391,947 284,565 923,922 1,953,669 14,794 3,326 -2,803 15,317 -53,683 144,617 1,695 186,857 1,454 Liabilities and Shareholders’ Investment June 30, 2005 Current Liabilities Trade payables Short-term borrowings Other current liabilities Total Current Liabilities Fixed Liabilities Long-term indebtedness Accrued pension and severance costs Other fixed liabilities Total Fixed Liabilities Total Liabilities Minority Interest Shareholders’ Investment Common stock Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Treasury stock Total Shareholders’ Investment Total Liabilities and Shareholders’ Investment Note: Other comprehensive income; Net unrealized holding gains on available-for-sale securities Pension liability adjustments Net unrealized gains (losses) on derivative instruments Cumulative translation adjustments Reference: Exchange rate March 31, 2005 (Millions of yen) Change 302,147 158,956 158,991 620,094 336,499 183,518 151,497 671,514 -34,352 -24,562 7,494 -51,420 207,499 93,576 46,974 348,049 968,143 52,178 226,567 92,672 48,767 368,006 1,039,520 51,151 -19,068 904 -1,793 -19,957 -71,377 1,027 135,364 186,548 600,890 -21,597 -21,540 879,665 1,899,986 135,364 186,551 584,515 -21,963 -21,469 862,998 1,953,669 -3 16,375 366 -71 16,667 -53,683 5,007 -14,773 122 -11,953 4,791 -14,652 117 -12,219 216 -121 5 266 June 30, 2005 March 31, 2005 US$ 1 ¥110.62 ¥107.39 EURO 1 ¥133.63 ¥138.87 7 (Millions of yen) Change 4. Consolidated Statements of Cash Flows (Millions of yen) Three months ended Three months ended June 30, 2005 June 30, 2004 I. Cash Flows from Operating Activities: 1. Net income 2. Adjustments to reconcile net income to net cash provided by operating activities— Depreciation and amortization Equity in earnings of affiliates, net of dividends received Deferred income taxes Loss on disposals and sales of tangible fixed assets Changes in assets and liabilities— Decrease in trade receivables Increase in inventories Increase in finance receivables Decrease in trade payables Increase in accrued income taxes and accrued expenses and other Increase (Decrease) accrued pension and severance costs Other, net Net cash provided by operating activities II. Cash Flows from Investing Activities: 1. Proceeds from sales of property, plant and equipment 2. Expenditures for tangible fixed assets 3. Payments for purchases of available-for-sale securities 4. Proceeds from sales of available-for-sale securities 5. Increase in time deposits 6. Other, net Net cash used in investing activities III. Cash Flows from Financing Activities: 1. Proceeds from long-term indebtedness 2. Repayment of long-term indebtedness 3. Increase (Decrease) in short-term borrowings, net 4. Proceeds from issuance of long-term debt securities 5. Repayment of long-term debt securities 6. Dividends paid 7. Payment for purchase of treasury stock 8. Other, net Net cash used in financing activities IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents V. Net Increase (Decrease) in Cash and Cash Equivalents VI. Cash and Cash Equivalents at Beginning of Year VII. Adjustment for Change in Fiscal Year End of Consolidated Subsidiaries VIII. Cash and Cash Equivalents at End of Period 8 23,723 24,894 19,632 113 653 405 18,790 -158 2,771 17 32,314 -2,209 -6,166 -32,329 23,735 -7,841 -13,546 -11,390 7,241 883 4,090 48,350 3,074 -429 2,351 42,268 21 -34,720 -36,105 36,542 -196 -1,580 -36,038 535 -18,647 -137 5 -1,182 8,527 -10,899 13,366 -20,420 3,308 -41,000 -7,348 -100 -236 -52,430 -2,122 -42,240 186,857 144,617 14,734 -18,929 -342 1,000 -10,000 -7,405 -98 -254 -21,294 -122 9,953 203,039 2,475 215,467 5. Segment Information (1) Industry Segment Information (Millions of yen) Three months ended June 30, 2005 Office Solution Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in Office Solution Business (%) Industry Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in Industry Business (%) Other Business: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on sales in Other Business (%) Corporate and Eliminations: Net sales: Intersegment Total Operating expenses: Intersegment Corporate Total Operating income Consolidated: Net sales: Unaffiliated customers Intersegment Total Operating expenses Operating income Operating income on consolidated net sales (%) Three months ended June 30, 2004 388,073 388,073 339,394 48,679 367,745 367,745 318,210 49,535 12.5 13.5 26,078 586 26,664 27,188 -524 29,583 668 30,251 29,220 1,031 -2.0 3.4 38,831 38,831 37,873 958 39,222 39,222 38,591 631 2.5 1.6 -586 -586 Change % 20,328 20,328 21,184 -856 5.5 5.5 6.7 -1.7 -3,505 -82 -3,587 -2,032 -1,555 -11.8 -12.3 -11.9 -7.0 - -391 -391 -718 327 -1.0 -1.0 -1.9 51.8 -668 -668 82 82 - -594 11,839 11,245 -11,831 -678 11,820 11,142 -11,810 84 19 103 -21 - 452,982 452,982 415,700 37,282 436,550 436,550 397,163 39,387 16,432 16,432 18,537 -2,105 3.8 3.8 4.7 -5.3 8.2 9.0 Note: Effective from this financial period, our business segment is changed into three categories such as "Office Solution", "Industry" and "Other". Accordingly, information for the previous corresponding period has been reclassified to conform with the current classification. 9 (2) Geographic Segment Information (Millions of yen) Three months ended June 30, 2005 Japan: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in Japan (%) The Americas: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in the Americas (%) Europe: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in Europe (%) Other: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on sales in other (%) Corporate and Eliminations: Net sales: Intersegment Total Operating expenses Operating income Consolidated: Net sales: External customers Intersegment Total Operating expenses Operating income Operating income on consolidated net sales (%) Three months ended June 30, 2004 241,524 104,986 346,510 317,403 29,107 239,663 96,410 336,073 304,421 31,652 8.4 9.4 86,298 1,308 87,606 86,282 1,324 76,632 1,295 77,927 76,053 1,874 1.5 2.4 103,476 1,120 104,596 98,698 5,898 100,626 941 101,567 95,414 6,153 5.6 6.1 21,684 23,627 45,311 42,126 3,185 19,629 21,010 40,639 38,239 2,400 7.0 5.9 -131,041 -131,041 -128,809 -2,232 Change % 1,861 8,576 10,437 12,982 -2,545 0.8 8.9 3.1 4.3 -8.0 9,666 13 9,679 10,229 -550 12.6 1.0 12.4 13.4 -29.3 2,850 179 3,029 3,284 -255 2.8 19.0 3.0 3.4 -4.1 2,055 2,617 4,672 3,887 785 10.5 12.5 11.5 10.2 32.7 -119,656 -119,656 -116,964 -2,692 -11,385 -11,385 -11,845 460 - 452,982 452,982 415,700 37,282 436,550 436,550 397,163 39,387 16,432 16,432 18,537 -2,105 3.8 3.8 4.7 -5.3 8.2 9.0 10 -APPENDIX- (Three months ended June 30, 2005) 1. Consolidated Sales by Product Category (Millions of yen) Three months ended June 30, 2005 <Office Solution Business> Imaging Solution Business Percentage of net sales (%) Domestic Overseas Network System Solution Business Percentage of net sales (%) Domestic Overseas Office Solution Business Total Percentage of net sales (%) Domestic Overseas The Americas Europe Other <Industry Business> Industry Business Percentage of net sales (%) Domestic Overseas The Americas Europe Other <Other Business> Other Business Percentage of net sales (%) Domestic Overseas The Americas Europe Other Grand Total Percentage of net sales (%) Domestic Percentage of net sales (%) Overseas Percentage of net sales (%) The Americas Percentage of net sales (%) Europe Percentage of net sales (%) Other Percentage of net sales (%) Reference: Exchange rate US$ 1 EURO 1 Three months ended June 30, 2004 349,487 77.2 149,622 199,865 38,586 8.5 36,599 1,987 388,073 85.7 186,221 201,852 82,966 98,671 20,215 324,494 74.3 139,352 185,142 43,251 9.9 41,839 1,412 367,745 84.2 181,191 186,554 74,145 93,979 18,430 26,078 5.8 15,858 10,220 3,139 3,945 3,136 Change % Change excluding exchange impact % 24,993 7.7 24,043 7.4 10,270 14,723 -4,665 7.4 8.0 -10.8 10,270 13,773 -4,687 7.4 7.4 -10.8 -5,240 575 20,328 -12.5 40.7 5.5 -5,240 553 19,356 -12.5 39.2 5.3 5,030 15,298 8,821 4,692 1,785 2.8 8.2 11.9 5.0 9.7 5,030 14,326 10,404 2,353 1,569 2.8 7.7 14.0 2.5 8.5 29,583 6.8 20,278 9,305 2,342 3,549 3,414 -3,505 -11.8 -3,526 -11.9 -4,420 915 797 396 -278 -21.8 9.8 34.0 11.2 -8.1 -4,420 894 857 305 -268 -21.8 9.6 36.6 8.6 -7.9 38,831 8.5 31,912 6,919 1,051 1,863 4,005 452,982 100.0 233,991 51.7 218,991 48.3 87,156 19.2 104,479 23.1 27,356 6.0 39,222 9.0 31,843 7,379 1,914 2,795 2,670 436,550 100.0 233,312 53.4 203,238 46.6 78,401 18.0 100,323 23.0 24,514 5.6 -391 -1.0 -404 -1.0 69 -460 -863 -932 1,335 16,432 0.2 -6.2 -45.1 -33.3 50.0 3.8 69 -473 -859 -965 1,351 15,426 0.2 -6.4 -44.9 -34.5 50.6 3.5 679 0.3 679 0.3 15,753 7.8 14,747 7.3 8,755 11.2 10,402 13.3 4,156 4.1 1,693 1.7 2,842 11.6 2,652 10.8 ¥107.60 ¥135.55 ¥109.65 ¥132.17 ¥-2.05 ¥3.38 Each category includes the following product line: Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network system Solution Business Personal computers, PC servers, network systems and network related software Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Business Optical discs and digital camera A1 2. Consolidated Sales by Previous Product Category (for reference) (Millions of yen) Three months ended June 30, 2005 <Office Equipment> Imaging Solutions: Digital Imaging Systems Percentage of net sales (%) Domestic Overseas Other Imaging Systems Percentage of net sales (%) Domestic Overseas Total Imaging Solutions Percentage of net sales (%) Domestic Overseas Network Input/Output Systems: Printing Systems Percentage of net sales (%) Domestic Overseas Other Input/Output Systems Percentage of net sales (%) Domestic Overseas Total Network Input/Output Systems Percentage of net sales (%) Domestic Overseas Network System Solutions Percentage of net sales (%) Domestic Overseas Office Equipment Total Percentage of net sales (%) Domestic Overseas The Americas Europe Other < Other Business > Other Business Percentage of net sales (%) Domestic Overseas The Americas Europe Other Grand Total Percentage of net sales (%) Domestic Percentage of net sales (%) Overseas Percentage of net sales (%) The Americas Percentage of net sales (%) Europe Percentage of net sales (%) Other Percentage of net sales (%) Reference: Exchange rate US$ 1 EURO 1 Three months ended June 30, 2004 140,270 31.0 56,811 83,459 39,498 8.7 15,441 24,057 179,768 39.7 72,252 107,516 139,383 31.9 59,106 80,277 42,246 9.7 15,995 26,251 181,629 41.6 75,101 106,528 180,221 39.8 80,062 100,159 3,209 0.7 727 2,482 183,430 40.5 80,789 102,641 40,210 8.9 38,223 1,987 403,408 89.1 191,264 212,144 86,960 102,971 22,213 151,970 34.8 66,715 85,255 5,385 1.2 939 4,446 157,355 36.0 67,654 89,701 44,989 10.4 43,577 1,412 383,973 88.0 186,332 197,641 78,225 99,511 19,905 49,574 10.9 42,727 6,847 196 1,508 5,143 452,982 100.0 233,991 51.7 218,991 48.3 87,156 19.2 104,479 23.1 27,356 6.0 52,577 12.0 46,980 5,597 176 812 4,609 436,550 100.0 233,312 53.4 203,238 46.6 78,401 18.0 100,323 23.0 24,514 5.6 ¥107.60 ¥135.55 ¥109.65 ¥132.17 Change % Change excluding exchange impact 887 0.6 867 0.6 -2,295 3,182 -2,748 -3.9 4.0 -6.5 -2,295 3,162 -2,913 -3.9 3.9 -6.9 -554 -2,194 -1,861 -3.5 -8.4 -1.0 -554 -2,359 -2,046 -3.5 -9.0 -1.1 -2,849 988 -3.8 0.9 -2,849 803 -3.8 0.8 28,251 18.6 27,468 18.1 13,347 14,904 -2,176 20.0 17.5 -40.4 13,347 14,121 -2,182 20.0 16.6 -40.5 -212 -1,964 26,075 -22.6 -44.2 16.6 -212 -1,970 25,286 -22.6 -44.3 16.1 13,135 12,940 -4,779 19.4 14.4 -10.6 13,135 12,151 -4,801 19.4 13.5 -10.7 -5,354 575 19,435 -12.3 40.7 5.1 -5,354 553 18,439 -12.3 39.2 4.8 4,932 14,503 8,735 3,460 2,308 2.6 7.3 11.2 3.5 11.6 4,932 13,507 10,378 1,028 2,101 2.6 6.8 13.3 1.0 10.6 -3,003 -5.7 -3,013 -5.7 -4,253 1,250 20 696 534 16,432 -9.1 22.3 11.4 85.7 11.6 3.8 -4,253 1,240 24 665 551 15,426 -9.1 22.2 13.6 81.9 12.0 3.5 679 0.3 679 0.3 15,753 7.8 14,747 7.3 8,755 11.2 10,402 13.3 4,156 4.1 1,693 1.7 2,842 11.6 2,652 10.8 ¥-2.05 ¥3.38 Each category includes the following product line: Digital Imaging Systems Digital PPCs, color PPCs, digital duplicators and facsimile machines Other Imaging Systems Analog PPCs, diazo copiers, and thermal paper Printing Systems MFPs(multifunctional printers), laser printers and software Other Input/Output Systems Optical discs and system scanners Network System Solutions Personal computers, PC servers, network systems and network related software Other Business Optical equipments, metering equipments and semiconductors A2 % 3. Forecast of Consolidated Performance (Billions of yen) Three months ended Net sales Gross profit Operating income Income before income taxes Net income Net income per share (yen) Capital expenditures Depreciation for tangible fixed assets R&D expenditures Exchange rate (Yen/US$) Exchange rate (Yen/EURO) Three months ending Half year ending Year ending June 30, 2005 Change Sept. 30, 2005 Change Sept. 30, 2005 Change Mar. 31, 2006 Change Results % Forecast % Forecast % Forecast % 452.9 194.7 37.2 38.0 23.7 32.32 34.7 15.6 25.5 107.60 135.55 3.8 2.9 -5.3 -7.8 -4.7 - 465.0 192.6 33.5 33.2 19.2 26.26 23.7 17.3 29.9 105.00 130.00 5.8 10.3 82.5 77.1 76.4 - 918.0 387.4 70.8 71.3 43.0 58.58 58.5 33.0 55.5 106.30 132.78 4.8 6.5 22.6 18.7 20.0 - 1,886.0 800.0 160.0 160.0 97.0 132.16 114.0 69.0 116.0 105.65 131.39 4.0 6.0 18.1 18.2 16.7 - 4. Forecast of Consolidated Sales by Product Category (Billions of yen) Half year ending September 30, 2005 Change Change Forecast Forecast(*) % % <Office Solution Business> Imaging Solution Business Domestic Overseas Network System Solution Business Domestic Overseas Office Solution Business Total Domestic Overseas The Americas Europe Other <Industry Business> Industry Business Domestic Overseas The Americas Europe Other <Other Business> Other Business Domestic Overseas The Americas Europe Other Grand Total Domestic Overseas The Americas Europe Other Year ending March 31, 2006 Change Forecast Forecast(*) % Change % 694.6 293.6 401.0 90.9 86.9 3.9 785.6 380.5 405.0 170.0 189.4 45.5 8.7 9.6 8.0 -4.9 -6.2 36.4 6.9 5.6 8.2 10.6 4.4 16.7 701.0 293.6 407.4 90.9 86.9 3.9 791.9 380.5 411.3 175.6 190.1 45.5 9.7 9.6 9.7 -4.9 -6.2 35.6 7.8 5.6 9.9 14.3 4.8 16.9 1,410.9 600.0 810.8 201.7 193.4 8.2 1,612.7 793.5 819.1 338.7 391.5 88.8 5.9 6.4 5.6 1.3 0.6 21.4 5.3 4.9 5.7 8.5 1.5 15.2 1,429.2 600.0 829.2 201.7 193.4 8.2 1,631.0 793.5 837.4 344.9 403.3 89.1 7.3 6.4 8.0 1.3 0.6 21.2 6.5 4.9 8.1 10.5 4.6 15.7 56.4 36.4 19.9 5.8 7.5 6.5 -4.0 -8.1 4.5 14.1 4.6 -2.8 56.5 36.4 20.0 5.9 7.5 6.5 -3.7 -8.1 5.5 17.3 4.7 -2.7 116.1 76.4 39.7 11.8 14.5 13.3 -2.7 -5.4 3.0 17.1 -5.2 1.6 116.7 76.4 40.2 11.9 14.9 13.3 -2.2 -5.4 4.5 18.7 -2.5 1.7 75.9 63.3 12.6 1.6 3.4 7.5 918.0 480.4 437.6 177.5 200.4 59.5 -8.0 -8.3 -6.9 -33.6 -19.4 10.9 4.8 2.4 7.6 10.1 3.9 13.4 76.1 63.3 12.8 1.6 3.4 7.7 924.6 480.4 444.2 183.3 201.1 59.8 -7.8 -8.3 -5.6 -33.5 -20.2 13.9 5.6 2.4 9.2 13.6 4.2 14.0 157.0 129.6 27.4 1.8 8.7 16.8 1,886.0 999.7 886.3 352.4 414.8 118.9 -3.8 -4.4 -0.6 -43.9 11.2 2.4 4.0 2.7 5.4 8.2 1.5 11.6 157.7 129.6 28.1 1.8 9.0 17.2 1,905.6 999.7 905.9 358.7 427.3 119.7 -3.4 -4.4 1.9 -43.9 15.1 4.8 5.0 2.7 7.7 10.2 4.5 12.3 * Excluding foreign exchange impact Each category includes the following product line: Imaging Solution Business Digital PPCs, color PPCs, digital duplicators, facsimile machines, analog PPCs, diazo copiers, scanners, MFPs(multifunctional printers), laser printers and software Network System Solution Business Personal computers, PC servers, network systems and network related software Industry Business Thermal media, optical equipments, semiconductors, electronic component and measuring equipments Other Business Optical discs and digital camera A3