March 24, 2008

MODEC, Inc.
Kenji Yamada, President & CEO
Code: TSE 6269
Contact: Yasuhiro Takano, General Manager
Corporate Planning & Strategies
TEL: +81.3.6203.0200

Revision of 2007 Full-Year Financial Results

MODEC, Inc. today announced the revision of the 2007 Full-Year Financial Results which wereannounced on February 21, 2008.

1. Reason for the revision
Following the auditor’s comments, consolidated balance sheet and the statement of cash flow wererevised.

2. Revised financial statements (attached)CONSOLIDATED BALANCE SHEET
December 31, 2007ASSETSThousands 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
Other investments
Less-Allowance for bad debts

Total assets¥21,499,163
23,226,559
2,809,596
31,234,140
6,066,203(9,726)84,825,936

3,085,531
1,652,117
4,737,648
13,134,794

15,517,685
12,242,617
3,277,867(2,400)31,035,771¥133,734,152

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 assets
Total liabilities, net assets¥25,899,016
19,152,987
13,565,629
3,653,131
2,342,699
3,875,545
68,489,008

14,092,281
310,224265,684
1,903,333
641,784
17,213,307

12,391,600
13,121,672
17,421,014(922)
42,933,364

12,519(114,483)
314,348
212,384

4,886,087
48,031,835¥133,734,152

CONSOLIDATED STATEMENT OF INCOME
For year ended December 31, 2007

SALES
COST OF SALES
Gross profit

Thousands ofJapanese yen¥144,040,900
127,132,992
16,907,907

SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
Operating profit

9,947,983
6,959,924

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)

3,579,807(3,679,818)(652,060)
1,877,634(1,692,637)(567,074)

INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS

6,392,851

INCOME TAXES:
Current
Deferred

3,814,186(1,964,093)

INCOME BEFORE MINORITY INTERESTS

4,542,758

MINORITY INTERESTSNET INCOME

43,429¥4,499,328

CONSOLIDATED STATEMENT OF CASH FLOWFor year ended December 31, 2007

Thousands ofJapanese yen
CASH FLOW 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 for
employees
Provision for severance and retirement benefits for
directors and corporate auditors
Provision for bonus to directors
Provision for product warrantyInterest income and dividend income
Interest expense
Foreign exchange (gain) loss
Equity in earnings of affiliates
Impairment loss from intangible asset
Gain from sale of available for sale securities
Changes in assets and liabilities:
Decrease (Increase) in– Accounts receivable - trade– Inventories
Increase (Decrease) in– Accounts payable - trade
Other, net

Interest and dividend received
Interest paid
Income taxes paid
Other, net
Net cash provided by operating activities¥6,392,851

1,656,995
26,485
6,318
184,630
76,013
6,000
661,398(3,579,807)
3,679,818
20,129(1,877,634)
2,064,544(781,002)(9,312,149)(692,137)
8,215,368
279,238
7,027,0593,756,457(3,720,049)(3,251,471)
0
3,811,995

Thousands ofJapanese yen
CASH FLOW 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
Proceeds from sale of available for sale securities
Other, netNet cash used in investing activities¥(3,091,452)(4,739,027)(2,165,521)(27,914,524)
24,553,356(942,733)
3,538,960
909,490(35,929)(9,887,380)

CASH FLOW FROM FINANCING ACTIVITIES:
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Cash dividends paid to minority interests
Cash dividends paid
Other, net
Net cash used in financing activities(12,325,661)
18,135,929(5,663,979)(130,142)(514,844)(209)(498,908)

EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH
EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR
CASH AND CASH EQUIVALENTS AT ENDING OFYEAR(809,511)(7,383,804)
28,827,361¥21,443,557

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For year ended December 31, 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 securitiesequity(712)38,832,070

780,351

Foreigncurrencytranslation
adjustments

Total
discrepancies
in appraisals
andMinority
Interests

Total net
assets1,237,041

2,017,392

1,373,012

42,222,475

Change of items
Cash dividends paid

(514,356)－(514,356)－－－

4,499,328

4,499,328－

4,499,328

116,532

116,532－

116,532

－

－

－

(209)

－

(209)

(514,356)

Bonuses paid to directors
Net income
Increase due to changes
in accounting principles
adopted for overseas
subsidiaries
Other
Purchases of treasury
stock
Change in items otherthanTotal change of items
Balance at December 31,2007

(209)

－

(767,832)(114,483)(922,693)(1,805,008)

3,513,074

1,708,065－－

4,101,504－

4,101,294(767,832)(114,483)(922,693)(1,805,008)

3,513,074

5,809,360

12,391,600

13,121,672

17,421,014(922)

42,933,364

12,518(114,483)

314,348

212,384

4,886,086

48,031,835