Fiscal Year ending October 31, 2006

Summary of First Quarter Operating Results (Consolidated)

March 3, 2006

Listed Company Name

Kanamoto Company, Ltd.

Company Code Number

9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange（URL http://www.kanamoto.co.jp）
Representative

Kanchu Kanamoto

Inquiries

Nobuhito Utatsu

President

Director & Corporate Officer, Division Manager, Accounting Division
TEL 81-11-209-1600
1. Matters Related to Preparation of the Summary of First Quarter Operating Results① Has the Company adopted simplified methods for accounting treatment? Yes
The Company uses book value for inventory.
The Company charges an amount to its allowance for doubtful accounts
based on actual loss experience in the prior consolidated accounting fiscal
year for normal accounts.
② Are there any differences with the methods of recognition used in theaccounting treatment for the most recent consolidated fiscal year? Yes③ Are than any changes in the scope of consolidation and/or application of theequity method?

No

2. Operating Results for the First Quarter of the Fiscal Year Ending October 31, 2006
(November 1, 2005 - January 31, 2006)(1) Consolidated Operating Results(Numbers less than one million yen have been rounded down)

Revenues
Millions of yen

Fiscal Year Ending October 31,
2006: First Quarter
Fiscal Year Ended October 31,
2005: First Quarter(Reference) Fiscal Year Ended
October 31, 2005％

17,503 (-0.6 )
17,612 (8.3 )63,975

Fiscal Year Ending October 31,
2006: First Quarter
Fiscal Year Ended October 31,
2005: First Quarter(Reference) Fiscal Year Ended
October 31, 2005

Ordinary Income

Millions of yen

Millions of yen％％

1,290 ( 72.3 )

1,237 ( 72.1 )

748 (-8.0 )719 (-9.0 )1,404

Net Income
Millions of yen

Operating Income

1,550

Net Income per

Net Income per

Share of Common

Share on a Fully

％

Yen

Yen

317 (-20.3 )10. 63−398 (-0.4 )13. 33−

11. 57−352(Note) The percentages shown for revenues, operating income, ordinary income and net income are the percent
increase or decrease compared to the same period of the prior fiscal year

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.1

(Qualitative information concerning consolidated operating results)< Management Environment >(From November 1, 2005 to January 31, 2006)

During the first quarter, the sharp rise in crude oil prices had a substantial affect on the positive businesssentiment in the manufacturing sector, the engine of Japan’s economy. Nevertheless, the earnings trend
at many leading firms continued to improve, led by positive results posted by key financial institutions thathave met their targets for disposal of non-performing loans. In addition, personal consumption
strengthened following improvement in the employment and income environment, and sales of winterclothing and goods were boosted by a cold wave. In general, the economy continued to recover andoverall, concerns about deflation have gradually diminished.
Under this environment, the construction industry, which is the main customer of the Kanamoto Group,
enjoyed a steady positive trend in the Tokyo metropolitan area and the Tokai Region, where private sector
demand is vigorous. In other areas of Japan, however, public works slowed and private demand was weak,
and the recessionary mood remained strong as the severe environment remained unchanged.
First Quarter Operating Results
In the Kanamoto Group’s primary business in the construction equipment rental industry, rental revenues
generally improved at a steady pace except in Hokkaido, where the economy has been slow to recover. As
a result, sales revenues for this division fell below the level of the same period of the prior year, as theCompany held disposals of rental equipment assets to the minimum quantities necessary, in accordancewith its initial plan.
Moreover, from an earnings perspective the effects from efforts to maintain unit prices and reduce thedepreciation expense burden were gradually actualized, and earnings greatly exceeded the same period of
the prior consolidated fiscal year.
As a result, at the end the first quarter for the fiscal year ending on October 31, 2006, consolidated
revenues were ¥17,503 million, 0.6% lower than in the same period of the prior consolidated fiscal year,
consolidated operating income rose 72.3% year-on-year to ¥1,290 million and consolidated ordinary
income increased 72.1% over the same period of the prior year to ¥1,237 million. Consolidated net income
was ¥317 million, a 20.3% decrease from first quarter of the prior consolidated fiscal year. During the firstquarter, the Company began applying asset impairment accounting for fixed assets, and booked an
impairment loss of ¥344 million as an extraordinary loss for the quarter.
A summary of operating results by business, and business developments and other matters deserving
special mention, are provided below.
< Summary of operating results by business >[ Business related to the Construction Equipment Rental Division ]Looking at construction equipment rental revenues in the first quarter by region, in the Hokkaido Region
the Company pursued vigorous efforts, and revenues were nearly unchanged from the same period of theprior consolidated fiscal year, decreasing only slightly despite the sharp cutback in public works spending.
Rentals of items such as safety products and temporary scaffolding, which the division is developing in thesame region, were strong and greatly exceeded the prior year level.
With the exception of Hokkaido, revenue exceeded the same period of the prior consolidated fiscal year in
the Tohoku, Kanto and Shinetsu, Kinki and Chubu and Kyushu regions, respectively. In the Tohoku Regionin particular, the division captured much of the small volume of public sector and private sector demand,and again achieved strong results and posted double-digit year-on-year growth.
The division showed good performance in the Kanto and Shinetsu Region as well. Revenues exceeded thesame period of the prior consolidated fiscal year, reflecting large-scale redevelopment projects in theTokyo metropolitan area and recovery efforts following the Niigata Prefecture Chuetsu Earthquake. The
division also achieved a synergy effect in the Kinki and Chubu Region with Kanki Corporation, a subsidiaryheadquartered in Hyogo Prefecture, and expanded at a steady pace even though large-scale projects wereSummary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.2

fewer. In the Kyushu Region the division’s results were boosted by disaster recovery construction works
and steady equipment rentals and sales. Sales of modular housing units for temporary use were especiallystrong.
[ Business related to the Steel Sales Division ]Revenues fell year-on-year. The main reasons were a lack of demand for new plant construction, which
was strong in the same period of the prior consolidated fiscal year, weak selling prices reflecting themarket’s sense of excess steel material inventories, and delays in steel material goods deliveries.
[ Business related to the Information Products Division and Other Businesses ]Rental revenues were unchanged from the same period of the prior consolidated fiscal year, as demand for
personal computer rentals in the Tokyo metropolitan area continued at a steady pace. Product sales
recovered compared to the same period one year earlier. As a result, net revenues for the entire divisionwere marginally higher.
< Business development issues deserving special mention and status of branch office changes >During the first quarter, the Company closed its Kanazawa Branch (Kanazawa, Ishikawa Prefecture) on
January 31. The Company did not open any new branches during the quarter.
As already reported on March 1, Kanamoto has made Flowtechno Corporation a subsidiary company.
Flowtechno specializes in construction methods to support large-scale urban renewal infrastructure project
construction (deep underground construction at depth of 40m and more), for which demand is expected to
expand significantly in the future, and new methods for maintenance and repair work on bridges, roads
and other structures. This new subsidiary is expected to serve as a springboard for increasing Kanamoto’s
market share in the Tokyo metropolitan area.

(2) Change in Consolidated Financial Position
Total Assets

Fiscal Year Ending October
31, 2006: First Quarter
Fiscal Year Ended October
31, 2005: First Quarter(Reference) Fiscal Year
Ended October 31, 2005

31, 2006: First Quarter
Fiscal Year Ended October
31, 2005: First Quarter(Reference) Fiscal Year
Ended October 31, 2005

Shareholders’Shareholders’EquityEquity Ratio

Equity per Share

Millions of yen

Millions of yen

86,872

34,22239.4

1,146.46

87,011

32,98237.9

1,104.65

81,97733,46540.8

1,120.76[Consolidated Cash Flows]

Fiscal Year Ending October(Numbers less than one million yen have been rounded down)

Shareholders’

Yen％(Numbers less than one million yen have been rounded down)

Cash Flow fromOperating
Activities

Cash Flow from
Investing
Activities

Cash Flow from
Financing
Activities

Balance of Cashand Equivalents
at End of Period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

3,776

-168

993

18,7109,174

33-3,331

17,61010,219-11-7,833

14,108

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.3

(Qualitative information concerning change in consolidated financial position)
Looking at the financial position in the first quarter under review compared with the end of the priorconsolidated accounting fiscal year, total assets increased by ¥4,894 million to ¥86,872 million. This
mainly reflected an increase in cash and equivalents, and increases in accounts payable, trade andshort-term bank loans.
Shareholders’ equity increased ¥757 million compared with the end of prior consolidated accounting fiscal
year to ¥34,222 million. The shareholders’ equity ratio was 39.4%.
(Cash flow from operating activities)
Cash flow from operating activities was ¥3,776 million, a year-on-year decrease of ¥5,398 million. Thiswas mainly the result of a decrease in accounts receivable, trade.
(Cash flow from investing activities)
Cash flow used for investing activities was ¥168 million, compared with cash flow provided by investing
activities of ¥33 million in the same period of the prior consolidated accounting fiscal year. This was mainly
a decrease in funds provided from sale of investment securities.
(Cash flow from financing activities)
Cash flow provided from financing activities was ¥993 million, compared with cash flow used for financing
activities of ¥3,331 million in the same period of the prior consolidated accounting fiscal year. This mainlyreflected an increase in short-term bank loans.

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.4

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2006
(November 1, 2005 - October 31, 2006)
Projected
Revenues

Projected
Operating
IncomeProjected
Ordinary Income

Projected Net
IncomeMillions of yen

Millions of yen

Millions of yen

Millions of yen

Interim32,560

1,600

1,470

540

Full-year

63,210

1,910

1,680

610

(Reference) Projected net income per share (full-year) ¥20.43(Qualitative information concerning projected operating results)
Because operating results to-date are generally close to Kanamoto’s initial plan, the Company has notmade any changes to the projected full year consolidated operating results numerical values released on
December 9, 2005.
These projected consolidated operating results were prepared using projections based on information
available to the Company as of the date this material was released and forecasts of the future economic,
environment, and include various risks and uncertainty factors.
Accordingly, there is a possibility the Company’s actual consolidated operating results will differ from the
projected amounts shown above as a result of various future factors, including but not limited to economic
conditions surrounding the Company, market trends, and competitive conditions.

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.5

1. (Summary) First Quarter Consolidated Balance Sheets(Unit: Thousands of yen, %)Current Quarter Prior FY Quarter

PeriodItem（
Ⅰ

Assets(First Quarter of (First Quarter of
the Consolidated the Consolidated
Accounting Fiscal Accounting Fiscal
Year Ending
Year Ended
October 31, 2006) October 31, 2005)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2005

Change fromprior year

AmountAmountAmountPercent

Amount18,713,419

17,618,767

1,094,651

6.2

14,111,882

14,250,444

15,065,882-815,437-5.4

14,329,090

545,517663,135-117,617-17.7

538,951

1,394,794

1,797,619-402,824-22.4

1,469,376

333,624

283,053

50,57117.9

318,999）

Current Assets

1．Cash and deposits
2．Notes and accounts
receivable, trade
3．Inventory
4．Construction
equipment
5．Deferred tax assets

1,818,630

431,992

1,386,638

321.0

873,516

Allowance for
doubtful accounts-905,355-551,215-354,139-64.2-923,256

Total Current Assets

36,151,076

35,309,233

841,842

2.4

30,718,560(1) Rental equipment
Buildings and(2) structures

9,769,262

10,658,532-889,269-8.3

9,811,304

6,369,129

6,854,244-485,115-7.1

6,501,912(3) Land

25,796,559

26,060,314-263,755-1.0

26,140,976(4) Other

1,108,340

1,318,651-210,311-15.9

1,084,721

43,043,291

44,891,743-1,848,452-4.1

43,538,915

Consolidation(1) adjustment account409,519531,987-122,468-23.0

435,655(2) Other

238,255

250,797-12,542-5.0

252,765

647,774

782,785-135,011-17.2

688,421

6,078,029

4,181,853

1,896,175

45.3

5,753,056−

719,937-719,937-100.0302,238(3) Other
Allowance for
doubtful accounts
Total Investments
and Other Assets

1,787,115

2,828,939-1,041,823-36.8

1,754,473-834,987-1,703,043

868,05651.0-778,148

7,030,157

6,027,687

1,002,470

16.6

7,031,620

Total Fixed Assets

50,721,223

51,702,216-980,992-1.9

51,258,957

86,872,299

87,011,449-139,149-0.2

81,977,517

6．OtherⅡ

Fixed Assets

1. Tangible Fixed Assets

Total Tangible Fixed
AssetsIntangible
Fixed
2. Assets

Total Intangible Fixed
AssetsInvestments
3. Other Assets

and(1) Investment securities(2) Deferred tax assets

Total Assets

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.6

(Unit: Thousands of yen, %)Current Quarter Prior FY Quarter

PeriodItem（

Liabilities(First Quarter of (First Quarter of
the Consolidated the Consolidated
Accounting Fiscal Accounting Fiscal
Year Ending
Year Ended
October 31, 2006) October 31, 2005)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2005

Change fromprior year

AmountAmountAmountPercent

Amount12,227,863

13,081,321-853,457-6.5

10,837,618

2,650,935

791,020

1,859,914

235.1

577,364

10,741,996

10,691,496

50,5000.5

10,718,496

596,220

429,740

166,47938.7

555,570667,012644,671

22,341

3.5

515,796

2,452,800

3,477,147-1,024,346-29.5

2,464,772

860,657

615,179

245,47839.9

467,946

30,197,485

29,730,576

466,909

1.6

26,137,564

18,439,233

20,201,229-1,761,996-8.7

18,643,607

1,548,890

1,263,914

284,976

22.5

1,525,993

136,859

115,299

21,56018.7

110,473

2,019,112

2,528,840-509,727-20.2

1,968,265

202,294

99,378102,915103.6

55,003

22,346,390

24,208,661-1,862,270-7.7

22,303,342

52,543,876

53,939,238-1,395,361-2.6

48,440,907

105,918

90,061

15,85617.6

71,135）Current Liabilities
1．Notes and accounts
payable, trade
2．Short-term bankloans
3．Long-term bankloans due within one
4．Corporate taxes
payable5．Accrued bonuses to
employees
6．Accounts payable,
other
7．OtherⅠ

Total Current
Liabilities
Long-term Liabilities
1．Long-term bankloans
2．Accrued employees
retirement benefits
3．Retirement
allowances to
4．Long-term accrued
expenses
5．OtherⅡ

Total Long-term
Liabilities
Total Liabilities（Minority Interests）

Minority Interests（ Shareholders’ ）EquityⅠ

Common stock

8,596,737

8,596,737−−

8,596,737

Ⅱ

Additional paid-in
capital

9,720,343

9,720,343−−

9,720,343

Ⅲ

Consolidated
retained earnings

13,733,006

14,005,797-272,790-1.9

13,691,585

ⅣValuation differenceon other investment
securities

2,360,778

842,818

1,517,959

180.1

1,643,403

Ⅴ

Treasury stock-188,360-183,546-4,813

2.6-186,594

Total Shareholders’Equity34,222,504

32,982,149

1,240,355

3.8

33,465,475

Total Liabilities,
Minority Interests
and Shareholders’Equity86,872,299

87,011,449-139,149-0.2

81,977,517

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.7

2. (Summary) First Quarter Consolidated Statements of Income(Unit: Thousands of yen, %)Current Quarter Prior FY Quarter(First Quarter of(First Quarter of

Period the Consolidated the Consolidated
Item

Accounting Fiscal Accounting Fiscal
Year Ending
Year Ended
October 31, 2006) October 31, 2005)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2005

Change fromprior year

AmountAmountAmountRevenues
Cost of revenues
from operations

17,503,425

17,612,980-109,555-0.6

63,975,212

12,222,266

12,905,870-683,604-5.3

48,735,074

Gross profit

5,281,158

4,707,110

574,048

12.2

15,240,137

Selling, general andadministrative
expenses

3,990,994

3,958,474

32,5190.8

13,835,766

Operating income

1,290,164

748,635

541,52972.3

1,404,371

1．Interest revenue

10

1,430

-1,420

-99.3

3,756

2．Dividend income

9,845

11,064-1,219-11.0

57,1493．Gain on sale ofinvestment securities

8,388

12,659-4,271-33.7

363,963

4．Rents received

22,346

23,675-1,328-5.6

94,173

5．Other

38,30353,769-15,465-28.8

197,506

78,894

102,599-23,705-23.1

716,548

1． Interest expense

84,62888,755-4,126-4.6

353,256

2． Others

46,49743,3703,126

7.2

217,449

131,126

132,126

-999

-0.8

570,705

1,237,931

719,108

518,82272.1

1,550,213

Gain on sale or
1．retirement of fixed
assets−4,254-4,254-100.057,930Gain on reversal of
2．allowance for
doubtful accounts

9,524

147,200-137,676-93.5

24,174846

5,878-5,032-85.6

38,92010,370157,333-146,963-93.4

121,025

5,915

21,065-15,150-71.9

147,388

−

−

−

−

29,961−−−−55,000Ⅰ
Ⅱ

Ⅲ

Ⅳ

Non-operating
expenses

Total non-operating
expenses
Ordinary income
Ⅵ

Extraordinary profits

3． Other
Total extraordinary
profits
Ⅶ

AmountNon-operating
revenues

Total non-operating
revenues
V

Percent

Extraordinary losses

Loss on sale or
1．retirement of fixed
assets
2．Loss on valuation of
investment securities
Loss on valuation of
3．affiliated company
stock

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.8

Transfer to allowance
4．for doubtful loans toaffiliates
5．Impairment loss

−

−

−

−

255,724

344,417−344,417

−

−

2,961

−

2,961

−

57,310Total extraordinary
losses353,294

21,065332,228−

545,383

Income before taxes
and adjustments

895,007855,376

39,6304.6

1,125,855

581,060

364,862

216,198

59.3

858,422-38,235

61,575-99,810-162.1-97,079

34,78230,815

3,966

12.9

11,889317,398

398,123-80,724-20.3

352,623

6． Other

Corporate, local andbusiness taxes
Adjustment forcorporate and othertaxes
Corporate, local andbusiness taxes
Adjustment forcorporate and othertaxes

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.9

3. (Summary) First Quarter Consolidated Statements of Cash Flows
Current Quarter

PeriodItem(First Quarter of theConsolidated
Accounting Fiscal YearEnding October 31,
2006)

Amount(Unit: Thousands of yen)
Prior FY Quarter(First Quarter of the
ChangeConsolidated
from
Accounting Fiscal Year
prior
Ended October 31,
year
2005)

AmountAmountI Cash flow from operating activities
Depreciation and amortization
expenseDepreciation and amortization
expense895,007855,376

1,125,855

1,102,864

1,162,277

5,211,105

Impairment loss

344,417−−

Amortization of consolidation
adjustment account26,13627,129106,781Gain on sale or retirement of fixed
assets−-4,254-57,930

Loss on sale or retirement of fixed
assets

5,915

21,065

147,388

Installment purchases of assets
for small-value rentals

46,50588,23869,455

Reclassification of cost of sales
associated with disposal of
construction equipment

645

4,572

7,442

42,008

84,117564,032-266,388-639,893-2,465,393−−

84,961Gain on sale of investment
securities-8,388-12,659-363,963

Increase (decrease) in allowancefor doubtful accounts

38,937-137,405-690,259

Increase in accrued bonuses to
employees

151,216

164,074

35,198

Increase (decrease) in accrued
employees retirement benefits

22,89735,084

297,163

Increase (decrease) in retirement
allowances to directors andauditors

26,386

19,017

14,191

Interest revenue and dividend
income-9,855-12,495-60,905

Interest expense on installment
purchases of rental assets

12,094

20,59868,120Interest expense

84,62888,755353,256

Increase (decrease) in accounts
receivable, trade78,6458,414,666

9,151,458(Increase) decrease in inventory
assets-6,56639,924

164,108

Increase (decrease) in accounts
payable, trade

1,390,245-324,281-2,567,984

Reclassification of cost of sales
associated with disposal of rental
assetsExpenditures for acquisition ofrental assets
Valuation loss on investment
securities

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.10

Increase (decrease) in accounts
payable, other

71,440-234,156-195,552

Directors and auditors' bonuses
paid-7,300-7,300-7,300Other366,309-71,822

256,190

Subtotal

4,407,804

9,580,629

11,247,422

9,855

12,49560,905Interest expense-100,780-113,825-417,194

Payment of corporate and othertaxes-540,411-304,371-671,665

Cash flow from operating activities

3,776,468

9,174,928

10,219,467

Interest and dividends received

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.11

Current Quarter

PeriodItem(Unit: Thousands of yen)
Prior FY Quarter(First Quarter of theConsolidated
Accounting Fiscal YearEnding October 31,
2006)(First Quarter of theConsolidated
Accounting Fiscal Year
Ended October 31,
2005)

AmountAmountChange fromprior year
AmountⅡ Cash flow from investing activities
Funds provided from redemptionof term deposits
Funds used for the purchase of
tangible fixed assets
Funds provided from the sale oftangible fixed assets
Funds used for the purchase ofintangible fixed assets
Funds used for the purchase ofinvestment securities
Funds provided from sale ofinvestment securities
Funds used for purchase of
subsidiary company stock
Other

−

−

5,000

-89,835-78,963-484,985

857

65,899314,122-1,400-2,030-50,730-176,183-294,279-1,188,707

98,195

342,796

1,386,291

−

−

2,902

-200

-50

4,741

-168,566

33,373-11,364

Increase (decrease) in short-termbank loans

2,073,571

114,381-99,275

Funds provided by long-term bankloans

2,700,000

900,000

7,900,000

Funds used to repay long-termbank loans-2,880,874-2,894,874-11,425,496

Funds used for repayment of
installment obligations-628,617-1,151,550-3,637,197

Funds used for the purchase oftreasury stock-1,765-1,070-4,118

Payment of dividends to parent
company-268,677-298,594-567,305

Cash flow from financing activities

993,635-3,331,708-7,833,393

Ⅳ

Increase (decrease) in cash andequivalents

4,601,537

5,876,593

2,374,708

Ⅴ

Balance of cash and equivalents
at beginning of period

14,108,863

11,734,154

11,734,154

Ⅵ

Balance of cash and equivalents
at end of the period

18,710,400

17,610,748

14,108,863

Cash flow from investing activities
Ⅲ Cash flow from financing activities

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.12

4. Business Segment Information[ Segment information by type of business ]Current quarter (From November 1, 2005 to January 31, 2006)(Unit: Thousands of yen)
Steel sales
business

Information
products
business andotherbusinesses

Total

16,082,315

1,312,201

108,908

Operatingexpenses

14,847,599

1,314,738

Operatingincome1,234,715-2,536

Construction
equipment
rentalbusiness
Revenues

Eliminations
or entirecompany

Consolidated

17,503,425−

17,503,425

101,061

16,263,399-50,138

16,213,260

7,846

1,240,025

50,1381,290,164

Same quarter of the prior consolidated accounting fiscal year
(From November 1, 2004 to January 1, 2005)(Unit: Thousands of yen)

Steel sales
business

Information
products
business andotherbusinesses

Total

15,905,693

1,600,404

106,883

Operatingexpenses

15,203,633

1,594,863

Operatingincome702,059

5,541

Construction
equipment
rentalbusiness
Revenues

Eliminations
or entirecompany

Consolidated

17,612,980−

17,612,980

106,637

16,905,134-40,788

16,864,345

245

707,846

40,788748,635[ Segment information by location ]Current quarter and same quarter of the prior consolidated accounting fiscal year
The Company does not report segment information by location because the Company does not have any
consolidated subsidiaries or important offices located in countries or regions outside of Japan.

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.13

5. (Summary) First Quarter Company Balance Sheets(Unit: Thousands of yen, %)PeriodItem
Assets（Current Quarter Prior FY Quarter(First Quarter of (First Quarter of
the Fiscal Yearthe Fiscal YearEnding October Ended October 31,
31, 2006)
2005)(Reference)

Change fromprior year

Fiscal Year Ended
October 31, 2005

AmountAmountAmountPercent

Amount17,889,861

16,676,341

1,213,519

7.3

13,230,849

2,838,609

3,521,707-683,098-19.4

2,583,873

9,889,272

9,825,504

63,767

0.6

10,665,107

316,670

330,561-13,891-4.2

311,947

1,143,789

1,473,192-329,402-22.4

1,207,108382,619259,709

122,91047.3

367,932）

Cash and deposits
1．Notes receivable,trade
2．Accounts receivable,trade
3．Cash and deposits

Ⅰ

4．Inventory
5．Construction
equipment
6．Deferred tax assets
7. Other

2,246,468

794,667

1,451,800

182.7

1,299,485

Allowance for
doubtful accounts-981,080-446,738-534,342-119.6-1,001,255

Total Current Assets

33,726,209

32,434,945

1,291,263

4.0

28,665,048

Fixed Assets
1. Tangible Fixed
Assets(1) Rental equipment

9,359,278

10,134,553-775,275-7.6

9,453,886(2) Building

5,249,177

5,616,672-367,494-6.5

5,344,822(3) Structures

869,472

964,390-94,918-9.8

903,297(4) Land

25,524,664

25,786,514-261,849-1.0

25,869,082(5) Other

1,075,354

1,272,632-197,277-15.5

1,051,658

42,077,947

43,774,762-1,696,815-3.9

42,622,746

174,898

213,356-38,458-18.0

187,284

6,006,321

4,074,226

1,932,094

47.4

5,684,987

Stock of affiliated(2) companies

979,307

1,037,210-57,902-5.6

979,307(3) Deferred tax assets

18,352813,092-794,740-97.7

479,224

1,261,561

1,577,585-316,024-20.0

1,221,113-385,619-599,731

214,11135.7-321,855

Ⅱ

Total Tangible
Fixed Assets
2. Intangible Fixed
AssetsTotal Intangible
Fixed Assets
3. Investments andOther Assets
Investment(1) securities(4) Other
Allowance for
doubtful accounts
Reserve forinvestment losses
Total investments
and other assets-480,173-280,000-200,173-71.5-480,173

7,399,748

6,622,384

777,36411.7

7,562,603

Total Fixed Assets

49,652,594

50,610,503-957,909-1.9

50,372,634

Total Assets

83,378,804

83,045,449

333,354

0.4

79,037,683

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.14

(Unit: Thousands of yen, %)PeriodItem

Current Quarter Prior FY Quarter(First Quarter of (First Quarter of
the Fiscal Yearthe Fiscal YearEnding October Ended October 31,
31, 2006)
2005)(Reference)

Change fromprior year

Fiscal Year Ended
October 31, 2005

AmountAmountAmount1．Notes payable, trade

8,789,391

9,467,415-678,023-7.2

7,214,389

2．Accounts payable, trade

2,016,186

1,978,243

37,9421.9

2,425,623

3．Short-term bank loans

2,000,000−

2,000,000−−

4．Long-term bank loans
due within one year

10,580,000

10,513,000

67,0000.6

10,555,000

5．Accounts payable, other

2,349,402

3,415,761-1,066,358-31.2

2,389,330

6．Corporate taxes payable542,141

387,751

154,39039.8

530,934

612,083

598,290

13,7932.3

448,076

927,528

677,868

249,65936.8

518,770

27,816,733

27,038,329

778,403

2.9

24,082,124

17,425,000

19,025,000-1,600,000-8.4

17,590,000

1,882,788

2,424,409-541,621-22.3

1,876,971

102,969

88,874

14,09415.9

79,121

1,525,607

1,261,932

263,67420.9

1,506,210

20,936,365

22,800,217-1,863,851-8.2

21,052,303

Total Liabilities

48,753,099

49,838,547-1,085,447-2.2

45,134,428（ Shareholders’ ）EquityCommon stock

8,596,737

8,596,737−−

8,596,737

9,720,343

9,720,343−−

9,720,343

9,720,343

9,720,343−−

9,720,343

1,375,287

1,375,287−−

1,375,287

19,601−

19,601−−

11,831,684

11,831,684−−

11,831,684

918,075

1,023,152-105,076-10.3

928,192

Total earned surplus

14,144,649

14,230,124-85,475-0.6

14,135,164

Valuation difference onother investmentii

2,352,335

843,243

1,509,091

179.0

1,637,603（

Liabilities

Percent

Amount）Ⅰ Current Liabilities

7．Accrued bonuses to
employees
8．Other
Total Current Liabilities
Ⅱ Long-term
Liabilities
bank
1．Long-term
loans
2．Long-term accrued
expenses
Retirement
3．allowances todirectors and auditors
employees
4．Accrued
retirement benefits
TotalLong-term
Liabilities

Ⅰ
Ⅱ

Ⅲ

Capital surplus
Additional paid-in
capital
Total capitalsurplus
Earned surplus
Legal earned surplus
Voluntary reserves
Reserve for advanced
depreciation of fixed
assetsGeneral reserve
Unappropriatedretained earnings
Ⅳ

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.15

Ⅴ

Treasury stock
Total Shareholders’EquityTotal Liabilities andShareholders’ Equity-188,360-183,546-4,813

2.6-186,594

34,625,704

33,206,902

1,418,802

4.3

33,903,254

83,378,804

83,045,449

333,354

0.4

79,037,683

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.16

6. (Summary) First Quarter Company Statements of Income(Unit: Thousands of yen, %)PeriodItem

Current Quarter Prior FY Quarter(First Quarter of (First Quarter of
the Fiscal Yearthe Fiscal YearEnding October Ended October 31,
31, 2006)
2005)

AmountAmount(Reference)

Change fromprior year
AmountFiscal Year Ended
October 31, 2005

Percent

AmountⅠ

Operating revenues

15,585,121

15,475,649

109,471

0.7

57,202,641

Ⅱ

Cost of revenues

10,997,572

11,359,033-361,461-3.2

43,789,520

Gross profit

4,587,549

4,116,615

470,933

11.4

13,413,121

Selling, general andadministrative
expenses

3,492,128

3,464,406

27,721

0.8

11,886,610

Operating income

1,095,421

652,209443,21268.0

1,526,510

1．Interest and dividends

11,587

15,110-3,523-23.3

66,7752．Gain on sale ofinvestment securities

8,388

12,659-4,271-33.7

359,093

3． Rents received

63,50361,431

2,071

3.4

244,052

4． Other

63,842

57,614

6,228

10.8

254,021

147,321

146,816505

0.3

923,943

1． Interest expense

75,60678,545-2,939-3.7

317,034

2． Other

44,40930,924

13,484

43.6

172,555

120,015

109,470

10,545

9.6

489,590

1,122,727

689,555

433,17262.8

1,960,863

−

4,254

-4,254-100.057,433

Ⅲ

Ⅳ

Ⅴ

Non-operating
revenues

Total non-operating
revenues
Non-operating
expenses

Total non-operating
expenses
Ordinary income
Ⅵ

Extraordinary profits

1． Gain on disposal of
fixed assets
Gain on reversal of
2． allowance for doubtful
accounts
3． Other−147,200-147,200-100.0

−

846

116

729

625.5

12,014

Total extraordinary
profits

846

151,571-150,725-99.4

69,447

4,939

19,730-14,791-75.0

120,158

344,417−344,417−−

3． Valuation loss on
investment securities

−

−

−

−

29,589Loss on valuation of
4． affiliated company
stock

−

−

−

−

55,0005． Transfer to reserve forinvestment losses

−

−

−

−

200,173

Transfer to allowance
6． for doubtful loans toaffiliates

−

−

−

−

407,149

7． Other

−

−

−

−

25,275Ⅶ

Extraordinary losses

Loss on sale or
1． disposal of fixed
assets
2． Impairment loss

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.17

Total extraordinary
lossesIncome before taxes andadjustments
Corporate, local andbusiness taxes
Adjustment for corporate
and other taxes

349,356

19,730329,626−

837,348774,217821,396-47,179-5.7

1,192,962

527,052

322,952

204,099

63.2

833,579-38,297

62,977-101,275-160.8-249,835

Net income

285,462

435,466-150,004-34.4

609,217

Profit carry-forward fromprior period

632,613587,686

44,927

7.6

587,686

−

−

−

−

268,711

918,075

1,023,152-105,076-10.3

928,192

Cash dividends
Unappropriated retained
earnings

Summary of First Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.18