September 28, 2007

MODEC, INC.
Kenji Yamada, President & CEO
Code: TSE 6269
Contact: Yasuhiro Takano, General Manager
Corporate Planning & Strategies
TEL: 03-5800-6081

Revision of 2007 Half-Year Financial Results

MODEC, INC. today announced the revision of the 2007 Half-Year Financial Results which wereannounced on August 15, 2007.

1. Reason for the revision
Following the auditor’s comments, accounting procedure regarding MODEC (U.S.A.), INC. which
acquired the stock of SOFEC, INC. on December 31, 2006 was revised.

2. Revised financial statements (attached)MODEC, INC. and Subsidiaries

CONSOLIDATED BALANCE SHEET
June 30, 2007ASSETS

Thousands ofJapanese yen
CURRENT ASSETS:
Cash and time deposits
Accounts receivable - trade
Inventories
Short-term loans receivable
Other current assets
Less-Allowance for bad debts
Total current assets
PROPERTY AND EQUIPMENT:
Buildings and equipment
Other

INTANGIBLE ASSETSOTHER ASSETS:
Investment securities
Long-term loans receivable
Long-term lease receivable
Other investments
Less-Allowance for bad debts

Total assets¥16,388,951
28,760,239
2,186,465
23,949,226
7,296,247(4,299)78,576,831

14,265,953
640,301
14,906,254
16,806,429

14,467,750
18,406,927
1,301,726
2,225,507(2,400)36,399,512¥146,689,028

LIABILITIES AND SHAREHOLDERS’ EQUITY

Thousands ofJapanese yen
CURRENT LIABILITIES:
Accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Accrued expenses
Income taxes payable
Other current liabilities
Total current liabilities
LONG-TERM LIABILITIES:Long-term loans payable
Severance and retirement benefits
For employees
For directors and corporate auditors
Deferred tax liabilities
Other long-term liabilities
Total long-term liabilities
NET ASSETSSHAREHOLDERS' EQUITY:
Common stock;authorized - 102,868,000 shares
outstanding - 37,408,000 shares
Capital surplus
Retained earnings
Less-Treasury stock at cost
Total shareholders' equity
DISCREPANCIES IN APPRAISALS andCONVERSION:Net unrealized holding gains on securities
Deferred Hedge Reserves
Foreign currency translation adjustments
Total discrepancies in appraisals andConversions
MINORITY INTERESTS IN CONSOLIDATEDSUBSIDIARIES:
Total net assetsTotal liabilities, net assets¥23,265,168
44,460,134
9,660,220
4,335,273
1,379,448
1,998,489
85,098,734

10,199,012
135,907
227,134
2,463,383
739,844
13,765,281

12,391,600
13,121,672
14,393,095(712)
39,905,655

622,737(6,941)
1,907,195
2,522,990

5,396,364
47,825,011¥146,689,028

MODEC, INC. and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME
For 6 months ended June 30, 2007

SALES
COST OF SALES
Gross profit

Thousands ofJapanese yen¥72,948,004
67,083,237
5,864,767

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Operating profit

4,745,629
1,119,137

OTHER INCOME (EXPENSES):Interest income and dividend income
Interest expense
Foreign exchange gain (loss), net
Equity in earnings of affiliates
Other, net
Total other income (expenses)

1,863,644(1,821,555)(371,939)
858,247(25,994)502,403

INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS

1,621,540

INCOME TAXES:
Current
Deferred

1,269,139(976,818)

INCOME BEFORE MINORITY INTERESTS

1,329,219

MINORITY INTERESTSNET INCOME

Net income per share

160,371¥1,168,847¥31.25

MODEC, INC. and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For 6 months ended June 30, 2007
Thousands of Japanese yen
Shareholders' equity

Common stock Capital surplus
Balance at December 31,
2006

12,391,600

13,121,672

Retainedearnings
13,319,510

Discrepancies in appraisals and conversions

Net unrealized
Total
DeferredTreasury stock shareholders' holding gains
Hedge Reserveon securities
equity(712)

38,832,070

780,351

Foreigncurrencytranslation
adjustments

Total
discrepancies
in appraisals
andMinority
Interests

Total netassets

1,237,041

2,017,392

1,373,012

42,222,475

Change of items(233,798)－(233,798)－－－

1,168,847

1,168,847－

1,168,847

Increase due to changes
in accounting principles
adopted for overseas
subsidiaries

144,356

144,356－

144,356

Other(5,819)(5,819)－(5,819)－－－Cash dividends paid

(233,798)

Bonuses paid to directors
Net income

Purchases of treasury
stock
Change in items other
thanTotal change of items
Balance at June 30, 2007－

(157,613)(6,941)

670,154505,598

4,023,352

4,528,950－－1,073,585－

1,073,585(157,613)(6,941)

670,154505,598

4,023,352

5,602,536

12,391,600

13,121,672

14,393,095(712)

39,905,655

622,737(6,941)

1,907,195

2,522,990

5,396,364

47,825,011

MODEC, INC. and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWSFor 6 months ended June 30, 2007

Thousands ofJapanese yen
CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes and minority interests
Adjustments to reconcile income before income taxes
and minority interests to net cash provided byoperating activities:
Depreciation and amortization
Amortization of consolidated differences
Provision for (reversal of) allowance for bad debts
Provision for severance and retirement benefits foremployees
Provision for severance and retirement benefits for
directors and corporate auditors
Provision for product warrantyInterest income and dividend income
Interest expense
Foreign exchange (gain) loss
Equity in earnings of affiliates
Changes in assets and liabilities:
Decrease (Increase) in– Accounts receivable - trade– Inventories– Consumption taxes refund receivable
Increase (Decrease) in– Accounts payable - tradeBonuses paid to directors
Other, net

Interest and dividend received
Interest paid
Income taxes paid
Other, net
Net cash provided by operating activities¥1,621,540

817,807
13,242891
10,313
37,463(270,868)(1,863,644)
1,821,555
501,508(858,247)(17,574,794)
414,198
44,0396,248,490(24,000)
60,915(8,999,587)
2,049,210(1,834,030)(1,903,849)(0)(10,688,257)

Thousands ofJapanese yen
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment andintangible assets
Purchases of investments in affiliates
Increase in short-term loans receivable
Disbursement of long-term loans receivableCollection of long-term loans receivable
Purchases of investments in subsidiaries
Proceeds from disposal of stock in subsidiaries
Other, net
Net cash used in investing activities¥(14,013,004)(2,326,469)
14,883,637(15,026,660)
221,823(1,018,128)
3,821,990
4,947(13,451,864)

CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from stock issue
Cash dividends paid to minority interests
Cash dividends paid
Other, net
Net cash used in financing activities

6,383,377
7,296,868(1,614,048)(0)(140,550)(234,580)(0)11,691,066

EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR
INCREASE IN CASH AND CASH EQUIVALENTS
DUE TO EXCLUSION OF CONSOLIDATEDSUBSIDIARIESCASH AND CASH EQUIVALENTS AT ENDING OFYEAR

10,645(12,438,410)
28,827,361

0¥16,388,951