Briefing Summary of the Analyst / Investor Meetingfor the 4th quarter and full year financial results for the fiscal year ended March 31, 2010
Tokyo, May 7, 2010

Note: This memo is posted for reference purposes for the convenience of those who
were unable to attend the meeting and is not a verbatim record of all statements made at
the meeting. Please be aware that it has been compiled in a concise form at the
judgment of the Company’s Corporate Communications Group. Please also refer to thecautionary notes on the final page.

Overview of financial results provided by Mr. Ema, CFO<Consolidated financial results on a full-year basis rather than a 4th quarter over 4th quarter
basis (January - March)>•

Although we have previously always provided our financial results on a 4th quarter over 4th quarter
basis, this time we will do so on a full-year basis, because the 4th quarter of the fiscal year ended
March 2009 (hereafter “the previous fiscal year”) is not appropriate for comparison as it recorded
very poor performance due to the Lehman crisis.

•

Our annual dividend will amount to 65 yen per share, combining the interim dividend of 30 yen
per share, which has already been paid out, and the year-end dividend of 35 yen per share.

•

The fiscal year ended March 2010 (hereafter “this fiscal year”) commenced six months after the
Lehman crisis, which occurred in the fall of 2008. From the 4th quarter of the previous fiscal year,
which made little profit, we began to recover gradually from the 1st quarter of the fiscal year ended
March 2010 onward, though not quite to the level we had achieved before the Lehman crisis.

•

During this fiscal year, we were affected by currency exchange rates, with a strong tendency of
reduced quantities, declines in unit prices and strong pressure for discount pricing in eachsegment.

•

With respect to the impact of foreign exchange rates, the appreciation of the Japanese yen
fluctuated between 6-9% against both the dollar and euro for this fiscal year compared with theprevious fiscal year. Most of our subsidiaries are located overseas, but their financial results areconsolidated by converting the local currency into Japanese yen. For that reason, the impact of rate
fluctuations on conversion has been outlined (see p.16 of the Quarterly Report). The amounts
negatively affected by currency exchange rates were 15.5 billion yen in net sales, 3.6 billion yen inboth operating income and ordinary income, and 3.3 billion yen in net income.

•

Total consolidated net sales were 413.5 billion yen (a decrease of 40.6 billion yen, down 9.0%
year on year). Of the decrease, 3.4% (15.5 billion yen) was attributed to foreign currency rates;
total consolidated net sales on a constant currency basis were down 5.5% (25 billion yen) year on1

year. On a per-operation basis, net sales decreased by 18 billion yen (down 4%) in theElectro-Optics (EO) segment, decreased by 10.3 billion yen (down 2.3%) in the Pentax segment,
and increased by 4.2 billion yen (up 0.9%) in the Health Care (HC) segment.
•

Operating income was 64.3 billion yen, which is an increase of 5.2 billion yen (up 8.9%). Foreign
currency rates contributed to the decrease of 6.1%, while there was an increase of 8.8 billion yen(up 15%) on a constant currency basis. On a per-operation basis, operating income decreased by
9.6 billion yen (down 16.2%) in the EO segment; increased by 14.8 billion yen (up 25.1%) in thePentax, which ended in a deficit in the previous fiscal year but recorded a surplus of more than 2.0
billion yen for this fiscal year; increased by 2.3 billion yen (up 3.9%) in the Vision Care segment;
and increased by 0.9 billion yen (up 1.5%) in the HC segment.

•

Ordinary income was 57.8 billion yen (down 18.7% year on year), which is a decrease in incomeof 13.6 billion yen, with a foreign exchange loss of 6.5 billion yen in this fiscal year and a foreignexchange gain of 7.1 billion yen in the previous fiscal year. With respect to extraordinary gains orlosses, in the previous fiscal year there was non-operating income of 13 billion yen, which was thesum of 9.7 billion yen from the gain on sales of investment securities (partial sales of the shares of
AvanStrate, which is our equity method affiliate) and 3.2 billion yen from commission received forprevious years. In this fiscal year, commission received was around 1.0 billion yen, which also
contributed to the fall in income. In contrast, the loss on impairment was 30.4 billion yen in theprevious fiscal year, while it was 833 million yen in this fiscal year, resulting in an increase of 29.6
billion yen. As a result, income before income taxes for this fiscal year was 49.7 billion yen, an
increase of 5.7 billion yen year on year (up 12.9%); and net income was 37.8 billion yen, an
increase of 12.7 billion yen year on year (up 50.8%).

•

The sales growth rate by product (see p.23 of the Quarterly Report) shows negative growth on afull-year basis for all markets for eyeglass lenses except Asia, which is attributed to foreignexchange rates, a decrease in quantity and a drop in unit prices. The full-year sales growth rate ofMemory Disks (MD) is down 2.7%. That of glass substrates declined due to strong pressure fordiscount pricing, despite an increase in quantity.

•

The segment information (see p.18 of the Quarterly Report) shows an operating income decreaseof around 10 billion yen in the EO segment. The Pentax segment moved into the black andrecorded an income increase of 14.3 billion yen. HC segment recorded increases in both sales andprofits. This business division provides contact lenses and intraocular lenses, and is showing
steady growth against a backdrop of economic fluctuations. Vision Care also recorded an increasein profits as it maintained an operating margin of over 20%.

•

As a subsequent event, on p.23 of the Quarterly Report we have outlined the conclusion of anagreement to transfer hard disk-use glass media manufacturing operations to Western Digital
Corporation, as we announced the other day. The sale of the operations is scheduled to take placeon May 31, 2010.

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Overview of operations provided by Mr. Suzuki, CEO
Overall, the financial results for the 4th quarter of this fiscal year resulted in indigestion. While othercompanies strived to improve their figures from the 3rd quarter to the 4th quarter, our company’s 4thquarter figures did not reach those achieved in the 3rd quarter, probably because we started to pick up
earlier. Aside from the fact that production capacity reached its maximum level, the fact that unit prices
have not returned to their original level is considered to have been a contributing factor.

< Mask Blanks and Photomasks for Semiconductor Manufacturing>•

There has been no significant change. Although the quantity of developed products increased, it
was not to a sufficient level to increase overall unit prices. We have previously announced that thequantity had become stable, whereas the product mix as well as average prices were tending to fall,
but the situation has now improved. However, things have not improved to the level of increased
average prices. There has been no change in terms of quantity in the last six months.

•

EUV has become more likely as a 4th quarter topic. Companies appear to be trying to settle into
EUV development after 22nm. I believe that there are only two companies, including ours, which
are currently developing mask blanks.

•

The quantity of products for research and development increased for photomasks as well. For ourcompany, which sells products to outside customers (merchant manufacturers), there has been a
progressive reduction in the number of customers and number of manufacturers that procuremasks from manufacturers that sell products to outside customers. Since there is a certain numberof manufacturers undertaking low-end production, the split between the number of merchantmanufacturers and the number of captive manufacturers appears to be fifty-fifty in the mask
market. The area of leading-edge technology is tending to reduce in scalewith few orders. And

as our mask business has a smaller share, the performance fluctuates according to the number oforders: it performs well when we receive orders and poorly when orders cease. In the 4th quarter,
we received some orders for this area, which led to fairly good results.

<Photomasks for Liquid-Crystal Displays (LCD)>•

The quantity of products for research and development has been increasing. Competition for panel
performance appears to have become increasingly intense. The customer side seemed less excitedabout it during the 4th quarter, partly due to the Chinese New Year; but overall, there is anincreasing number of development products, which appears to be boosting the markets.

•

Prices are still dropping. Mask manufacturers have been forced to a level where they can barely
afford to reinvest in facilities, but the price decline shows no sign of slowing.

•

My personal opinion is that it is not yet certain at this point as to which method to use for 3D
photomasks, shutter or polarization.

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<Glass Memory Disks (MD) for Hard Disk Drives (HDD)>•

The balance between substrate supply and demand was tight, but it now seems to have settled.
Nonetheless, this does not mean that our company’s production capacity has increased. PCs are
not accumulating in number, probably due to the tight DRAM supply. Since a good supply ofdrives has gradually become available, we are no longer in a situation where we are chased by ourcustomers due to short supply of our products.

•

Prices have not dropped in the 4th quarter compared to the 3rd quarter. But since the production
base is located in Asia, sales declined due to the reduced number of operating days in the 4th
quarter because of the Chinese New Year.

•

With respect to disk media, ever since there was talk of a merger with Showa Denko K.K. a year
ago, we have not changed our belief that it would be very difficult for us, a company with thesmallest market share of all media manufacturers that sell products to outside customers, tocompete with two others for two customer companies, and that it would take a long time for adrive to increase its recording capacity, given the fact that it has become increasingly difficult toadvance disk technologies. Because we thought it would be difficult to earn profits in the longterm in the position we are in now, we decided to sell the assets, despite the fact that we havecaught up with the leading-edge technology and that performance has been improving.

•

Please also note that the sale of the disk media operations and the supply of substrates are two
separate matters, although they have been reported on press together. I hope you understand thatthese matters involve two separate agreements.

<Eyeglass Lenses>•

Although the market for eyeglass lenses is shrinking in Japan, price competition between retailers
looks to be ending soon. Since there are still a quite number of retail stores, however, the market islikely to remain sluggish until it is reduced to a certain extent.

•

The market in Europe is worrisome. It will experience a downturn in foreign exchange rates andconsumption, which will be hard on us because our company has a high sales composition ratio in
Europe.

•The market in Asia is moving forward with a high growth rate. But since eyeglass lenses for theelderly, which are extremely profitable, do not sell well in Asia, the contribution of the market in
Asia to our earnings is not as large as it may seem. In the long term, however, we believe that its
contribution will increase.

•

Overall, both sales and profits have continued strongly, so I believe that our company will be able
to maintain its current position in the competitive market for some time.

4Overview of performance provided by Mr. Hamada, COO<Digital Cameras and Optical Lenses, etc.>•

We cannot expect much unit growth for compact cameras; prices have also become lower andlower. Prices are still dropping in Japan, but seem to be coming to a standstill in North America
and Europe. We expect to sell a total of 110 million cameras in this fiscal year; the sales quantity
for this year (2010) is expected to be equivalent to that for two years ago (2008).

•

We expect that sales of single-lens reflex cameras will grow. From 2008 to 2010, sales have grownat an annual rate of 5-10%, despite the impact of the recession.

•

With respect to mirrorless cameras, market penetration rate in Japan is around 17%. It is about
10% or more in Great Britain, whereas in North America it is only around 1%, and in Germany
and France it is around 2-3%. So this is a new, niche market from a global perspective. It is
growing bigger and bigger, and is expected to represent around 20% of those single-lens reflex
cameras sooner or later. Prices are expected to become lower and lower for both single-lens reflex
cameras and mirrorless cameras. And the digital camera market is expected to consist of three
categories: compact cameras, single-lens reflex cameras and mirrorless cameras.

•

The Pentax segment has not moved into the black yet, despite taking some measures including afactory closing down last year. Last year, it released a new single-lens reflex camera that carved
out a clear position in the market; this year, it will strive to expand the market, as well as devoting
to compact cameras. We plan to expand the compact camera business this year by increasing
quantities and enhancing advertising.

•

The lens unit segment achieved solid results by focusing on “thin, light and inexpensive” without
increasing quantities.

•

The sales quantity of optical glass has returned to the level it was at before the Lehman crisis, but
we are having a hard time in terms of the unit price. We reduced the price by 20-30% compared to
two years ago, due to strong pressure to discount prices as well as strategic adjustments. As higher
power lenses are expected to be used more for mirrorless and compact cameras, there will be
increased demand for a lens that is extremely difficult to manufacture. Not all manufacturers canmake such a difficult lens easily, so we hope to use it to differentiate our company from othermanufacturers.

<Medical Endoscopes>•

Europe and the United States account for over 80% of our net sales; sales in Europe (including the
Middle and Near East) remained at the same level as the previous fiscal year, while those in North
America did not reach the level of the previous fiscal year due to the recession and the healthcare
reform. The good news was that sales of our key products, endoscopes used to examine the large
intestine and stomach, remained at the same level as the previous fiscal year.

•

Since our company is not as large as our competitors in terms of scale, we plan to strengthen our

5foundations to further expand our regional strategies and product portfolio. In addition to scopes,
we would like to add medical equipment for treatment, which will be in demand, to our productportfolio. There will be an increasing number of endoscopic procedures, which are expected to use
rigid scopes in combination with surgical instruments. As a result, we would like to push ourstrategies forward with a broad view.
•

This year, we plan to focus on emerging nations as well, such as Asia, the Middle and Near Eastand South America.

•

As announced in the news release the other day, we have appointed an external personnel called
Chris Japp, who has long experience and a proven track record in global health care firms, as the
Head of the Lifecare Division. With his leadership, we will be focusing on expanding our presencearound the world.

<Contact Lenses>•

Sales showed a steady increase. The number of stores totals approximately 170 in Japan and sevenin Shanghai, China. We will be opening eyecity stores this year as well. The contact lenses
segment achieved close to double-digit growth, while the industry recorded negative growth of3%.

<Intraocular Lenses (IOL)>•

Eight months have passed since we entered the North American market, which is said to be thelargest in the world. We have begun to gradually nibble away at the market, and we will now gearup for the increased presence of our company in North America.

•

I will now provide a general overview of the medical markets in Europe and the United States. In
North America, hospitals and doctors have finally begun to think optimistically. However, thecriteria for approving leases and financing still appear to be stringent. An increasing number ofhospitals have created CFO positions, although doctors appear to have mixed feelings about
having CFOs in hospitals, I believe that market sentiment has begun to improve. When the Obamaadministration’s healthcare reform is implemented, it is said that 32 million more citizens will be
insured. The problem is that endoscopic doctors are in short supply; there are only 10,000-15,000of them throughout the U.S. The progress of aging also indicates that queues for medicare will belonger in the future. We plan to take all this into account when establishing our strategies.

•

Dark clouds have started to loom over the European market in the past week. There are more
public than private hospitals in Europe; in France, public hospitals account for 50-60% of all
hospitals. As a result, we expect to be in a difficult situation. A little while ago, I mentioned thatmarket sentiment in Europe had entered the “buying” stage. But now, we will carefully assess thereal economic situation to push forward with regional strategies.

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Q&A
Q: With regard to the Pentax segment, whose profits have improved significantly, please tell us the sales
composition ratio, as well as the degree of profit improvement compared to the previous fiscal year,
and the reasons for this.
A: (Mr. Ema, CFO) The camera segment suffered a deficit of more than 10 billion yen in the previous
fiscal year, which has improved to several billion yen this fiscal year. Although sales havedecreased, the reduction of fixed costs, such as labor costs and depreciation costs, has contributed
substantially to the improvement.
Q: Operating income exceeded the forecasts announced in the financial results of the 3rd quarter by
three billion yen. Which segments performed better or worse than the forecasts?
A: (Mr. Suzuki, CEO) On a full-year basis, the results did not deviate much from the forecasts. With
respect to Memory Disks (MD) in the EO segment, glass media performed better than expected,
whereas optical lenses performed rather poorly. The Pentax segment performed well on cameras but
poorly on endoscopes. The camera segment had expected to be in a difficult position in the 4th
quarter, which fortunately turned out not to be the case.

Q: You have announced that Mr. Chris Japp has been appointed to head the endoscope division. Pleasetell us what the problems have been, and how you will be addressing them. Please also tell us how
you will formulate your research and development budget, which seems smaller than that of othercompanies.
A: (Mr. Hamada, COO) I believe that our company was lacking a process for developing a roadmap for
customer-driven product development, undertaking marketing for the manufactured products andhaving them used by doctors. I became aware of this problem in the past two years, but I have toadmit that they always had the attitude that “good products sell themselves.” However, it is clearthat operative procedures will be changing, and that the eight new endoscope manufacturers in
China will bring an end to the dominance of the market by the three Japanese manufacturers. As aresult, we must strive to manufacture products that will further meet the future needs of doctors andpatients. With respect to the research and development budget, a large machine is not necessary forundertaking the research and development of our products, whether they are cameras or endoscopes.
In most cases, we procure molds, materials and components. It is rare for us to construct aparticularly large factory. We would like to use the budget for improving our current products tooffer better usability by manufacturing unbreakable, strong and easy-to-use products. In addition,
we would like to use the budget for developing new devices (accessories). We would also like toinvest in the development of electric appliances, because there is room for improvement in theimage quality of processors in the electronics field. When we launch on the Asian markets, wewould like to place a Pentax endoscope center at the heart of emerging nations. With this center, we

7will provide Pentax scopes and processors at reasonable prices by way of joint research, and wewill invest in fields where we can expect greater sales, profits and market shares.

Q: Please provide us with the outlook for sales of Memory Disk for Fiscal Year ending March 31, 2011
on a quarterly basis. What do you see happening in terms of the price trend? You have mentionedthat the sales of disk media operations and the supply of subassemblies are contained in two
separate agreements. What do you think the market share will be like as a result?
A: (Mr. Suzuki, CEO) Based on the assumption that demand will continue, it is unlikely that prices will
be lower than they are now. There only remains the issue of production capacity. From the 2nd
quarter (Jul - Sep 2010) onward, the production capacity of the current factories will increase by
7-8%. In addition, a new factory in the Philippines will begin operating in October or November
2010. The production capacity of this new factory will be equivalent to that of one of the existing
three factories; when in full operation, the total production capacity will increase by 25%. This does
not mean, however, that the total production capacity will increase by 25% in November; theincrease will be quite gradual. We have already started to think about 2011, and we will make adecision in a timely manner, as we will be increasingly unable to meet the possible upsurge indemand in 2011 unless we construct another factory.
The substrates market is virtually dominated by two manufacturers. I believe our company currently
accounts for 70% of the total. As another company has announced that it will increase its
production capacity from this summer onward, the outcomes will depend on the increased
production capacity of the two companies, as well as demand at the time. As of now, substrates
are unlikely to be in excess in terms of volume for the Jan-Mar period of 2011. This will be more
likely in Fiscal Year starting in April 2011, when we will have sufficient stocks.

Q: How will capital investment, depreciation, and the sale of disk media operations affect the forecasts
for FY2010?
A: (Mr. Ema, CFO) We plan to make capital investments of 43 billion yen, 63% of which will beallocated to the EO segment, with 41% in substrates and about 20% in the others. 12% will beallocated to eyeglass lenses. Depreciation is projected to be 33.5 billion yen. We will lose net salesof 16.4 billion yen by selling the disk media operations.
(Mr. Suzuki, CEO) Since current sales of disk media include some of the (internal) sales ofsubstrates, this does not necessarily mean that we will lose all 16.4 billion yen.
(Mr. Ema, CFO) As we will be performing due diligence, we have not yet finalized how the amountinvolved in the sale of the disk media operations will be recorded in the financial statements.

Q: How are you proceeding with the camera operations? Please also tell us about the M&A status ofeyeglass lenses and others.

8

A: (Mr. Suzuki, CEO) We have not changed our policy with regard to cameras. As we still think it will
be difficult to compete on our own, we would like to explore the possibility of a business alliance,
merger, etc. We have examined several possibilities for M&A in an area of eyeglass lenses, however
this has become less likely to occur anytime soon, given that the financial market has beenchanging and the economic environment in Europe has not improved as much as we had expected.

Certain statements contained in this report constitute forward-looking statements
regarding the company’s future performance and environment of the industry in which
the company is involved. Forward-looking statements are based on the judgment of thecompany and corporate group obtained based on information obtainable at the time thestatements are made and they also contain risks and uncertainties. The company does
not guarantee the completeness or accuracy of the content. Consequently, you areadvised to refrain from making investment judgments relying entirely on these
forecasts. Actual performance and the industry environment may differ materially fromthose expressed by the forward-looking statements for a number of reasons. You arerequested to make final decisions regarding investment, etc., on your own. Please beaware that we cannot take responsibility for the outcome of investments.

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