Business Results
For the six months ended June 30, 2009

August 19, 2009WORLD INTEC CO., LTD.

ＪＡＳＤＡＱ（２４２９）Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

Contents
1. Summary of Business Results for the 2nd Quarterof Fiscal Year Ending December 31, 2009 ・・・・・・・・・・・・・・・・・・・・・・・・・3~8
2. Earnings Forecast for Fiscal Year Ending December 31, 2009 ・・・・・・・9~11
3. Emergency Measures (Report) ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・12~13

4. Impact from External Environment Changes (Addendum) ・・・・・・・・・・14~17
5. Outlook and Industry Trends ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・18~24
6. Our Initiatives ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・25~30

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved2Summary of Business Results for the 2nd Quarterof Fiscal Year Ending December 31, 2009

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

3

Net Sales

Significant decline in the number of onsite workers
due to production cutbacks by client-manufacturers

Operating
IncomeResults from adopted structural reforms

Ordinary
IncomeIncrease due to employment adjustment subsidy
Loss due mainly to corporate income tax andminority shareholders’ interest

Consolidated(¥Million)

FY12/08 2Q
ActualFY12/09 2Q
ActualYear-on-Year Change
AmountRatio

Net Sales

25,552

14,728△10,824△42.4%

Operating income

1,017

56

△961

△94.5%

4.0%

0.4%

ー

ー

Ordinary income

1,230

111

△1,118△90.9%

Ordinary margin

4.8%

0.8%

ー

ー

564

△11

△576

ー

2.2%

△0.1%

ー

ー

Operating margin

Net income
Net margin

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved4Consolidated Net Sales and Operating Margin (FY12/05 3Q – FY12/09 2Q)▌ Both hit hard by the recession up to March 2009

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved5Summary of Business Results by Business Segment (Year-on-Year Change)
Year-on-Year Change
AmountRatio

FY12/08 2Q
ActualFY12/09 2Q
Actual

15,777

6,759△9,018△57.2%

1,207

237

△970

△80.3%

7.7%

3.5%

ー

ー

3,732

2,936

△795

△21.3%

259

138

△ 121

△46.8%

6.9%

4.7%

ー

ー

Net Sales

900

1,002

102

11.3%

Operating income

75

76

0

1.0%

Operating margin

8.4%

7.6%

ー

ー

Information Technology Net Sales& Telecommunications
Operating income
Services
Operating margin

4,472

3,533

△938

△21.0%

54

112

58

107.2%

1.2%

3.2%

ー

ー

Net Sales

670

497

△173

△25.8%

Operating income

△29

△27

2

ー

△4.4%

△5.4%

ー

ー

Net Sales

25,552

14,728△ 10,824△42.4%

Elimination

△549

△480

68

ー

Operating income

1,017

56

△ 961

△94.5%

4.0%

0.4%

ー

ー

(¥Million)
Manufacturing
Net Sales
temporary
Placement/Contracting Operating income
Operating margin

Technology Oriented
Placement

Net Sales
Operating income
Operating margin

R&D Placement

Marketing Sales
Services

Operating margin
Total

Operating i margin

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

6Summary of Consolidated Statements of Cash Flows(Consolidated)(¥Million)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Amortization of goodwill
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accrued expenses
Increase (decrease) in accrued consumption taxes
OthersInterest and dividends income received
Interest expenses paid
Income taxes paid
Cash flows from investing activities
Purchase of short-term investment securities
Proceeds from sales of short-term investment securities
Purchase of property, plant and equipment
Purchase of investment securities
OthersCash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Others
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of term
Cash and cash equivalents, end of term

FY12/08 2Q
Actual
61
1,223
79
46
△389
△98
124
253
△268
△222
6
△6
△686
△108
ー
ー
△38
△107
36
△201
166
ー
△296
△71
1
△247
4,152
3,905

△541
111
63
47
987
131
123

Year-on-Year
ChangeValue△603△1,111△15
11,376 * Impact by reduced number
229 of employees
0△1,285
△345
△202
3
△17
△159
104
△64
164
△18
△2
25
837
873
400
△333
△101
4
405
3,717
4,122

△1,538 * Impact by reduced number△77 of employees
19
△2
△10
526
213
△64
164
20
104
△11
1,038
706 * To secure liquidity on hand
400 * Internal control expenses
△37
△30
3
652
△435
217

FY12/09 2Q
ActualCopyright © WORLD INTEC CO.,LTD. All Rights Reserved

7Summary of Consolidated Balance Sheets(Consolidated)(¥Million)
Total Assets
Current assets
Cash and deposits
Notes and accounts receivable-trade
Inventories
OthersNoncurrent assets
Property, plant and equipment
Intangible assets
Investments and other assets
Total liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Accrued expenses
Income taxes payable
Accrued consumption taxes
OthersNoncurrent liabilities
Long-term loans payable
Provision for retirement benefits
Provision for directors' retirement benefits
OthersTotal net assets
Capital stock
Capital surplus
Retained earnings
Treasury stock
Valuation and translation adjustments
Subscription rights to shares
Minority interests
Total liabilities and net assets

FY6/08 2Q
Actual

FY6/09 2Q
Actual12,78010,567
3,947
5,541
493
584
2,213
849
397
965

10,442
8,142
4,154
3,156
414
415
2,300
715
186
1,398

7,712
6,884
627
720
3,763
612
389
771
828
611
196
18
2
5,067
696
859
3,014
△70
ー
ー
567
12,780

5,816
4,973
539
1,628
1,853
144
179
626
843
616
203
21
2
4,626
697
860
2,558
△100
△8
－
618
10,442Year-on-Year Change
Amount△2,337△2,425207△2,384 * Impacted by
net sales decline△78

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

△168
87
△134
△210
432
△1,895△1911△88
908 * To secure liquidity on hand
△1,909 * Impacted by net sales decline
△467
△209
△145
15
5
6
3
0
△441
0
0
△455
△30 * Acquired 1,172 shares△8
0
50△2,337

8

Earnings Forecast
for Fiscal Year Ending December 31,2009

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

9Consolidated Earnings Forecast Outline for FY12/09▌ Given the manufacturing industry’s environment and outlook, our earnings

forecast was revised on July 31.

(Consolidated)(￥Million)

FY12/08
ActualFY12/09 1HF
ActualFY12/09 2HF
Forecast

Year-on-Year Change

FY12/09
Forecast

AmountRatio

Net Sales

48,767

14,728

13,571

28,300△20,467△42.0%

Operating income

1,089

56

283

340

△749

△68.8%

2.2%

0.4%

2.1%

1.2%

ー

ー

1,278

111

248

360

△918

△71.8%

2.6%

0.8%

1.8%

1.3%

ー

ー

192

△11

61

50

△142

△74.0%

0.4%

△0.1%

0.4%

0.2%

ー

ー

Operating income margin

Ordinary income
Ordinary income margin

Net income
Net income margin

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

10Summary for Business Forecast by Business Segment
FY12/08
Actual(¥Million)

FY12/09 1HF
ActualFY12/09 2HF
Forecast

FY12/09
Forecast

Year-on-Year Change
Amount

Ratio

ManufacturingTemporary
Placement/
Contracting

Net Sales

29,380

6,759

5,644

12,403△16,977△57.8％

Operating income

1,920

237

339

576

△1,344△70.0％

6.5%

3.5%

6.0％

4.6％

ー

ー

Technology
Oriented
Placement

Net Sales

8,021

2,936

3,116

6,052

△1,969△24.5％

468

138

245

383

△85

△18.2％

5.8%

4.7%

7.9％

6.3%

ー

ー

1,905

1,002

1,110

2,112

207

10.9％

139

76

116

192

53

38.1％

Operating margin

7.3%

7.6%

10.5％

9.1％

ー

ー

Information
Net Sales
Technology &Operating income
Telecommunications
Services
Operating margin

8,202

3,533

3,193

6,726

△1,476△18.0％

178

112

94

206

28

15.7％

2.2%

3.2%

2.9％

3.1％

ー

ー

Marketing Sales
Services

Net Sales

1,257

497

510

1,007

△250

△19.9％

Operating income

△132

△ 27

△20

△47

85

ー

△10.5％

△5.4%

△3.9％

△4.7％

ー

ー

Net Sales

48,767

14,728

13,57228,300△20,467△42.0％

Elimination△1,485

△ 480

△490

△970

515

―

1,089

56

284

340

△749

△68.8％

2.2%

0.4%

2.1％

1.2％

ー

ー

Operating margin

Operating income

Operating margin
R&D Placement

Net Sales
Operating income

Operating margin
Total

Operating income

Operating margin

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

11Progress Report on Emergency Measures

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

12Progress Report on Emergency Measures▌ The emergency measures announced at the end of last year are proving effective.

《Reduction in Offices》
・ Manufacturing Temporary Placement/Contracting Business:
Sales offices reduced from 25 to 21 (4 closed; 1 consolidated)
・ Technology Oriented Placement Business:
Sales offices reduced from 17 to 14 (3 closed)
・ R&D Placement Business:
Sales offices reduced from 8 to 7 (1 closed)《 Reduction of Expenses》
・ Expenses cut back, including cost of labor,
advertisement, travelling, fuel and rent(¥Million)
2500
2000
1500

Reduced by approx.
¥ 660 million

1000

500
0
FY12/08 2Q

FY12/09 2Q

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

13Impact from External Environment Changes (Addendum)

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

14

Manufacturing Temporary Placement/Contracting Business
Trends in Onsite Workers and Outlook on the Future《 1Q/2Q Trends 》
While the number of onsite workers was significantly reduced, we believe labor adjustments resulting
from the recession ended in March. Since then, cancellations of worker contracts have tapered off,
but a rebound has yet to occur as order placements have been postponed. From March, we focused
our sales effort on specific industries and manufacturers, and project that order inflows will increase
from the 2nd half and beyond. As for our PL, the fundamentals have already shown improvement in the
1st half.

《 Outlook 》
We expect client orders will be concentrated on outsourcing providers that are fully compliance capableand have sound financials. We are confident that we can secure orders from the 2nd half by further
emphasizing the superiority of outsourced contracting versus other placement services and by creatinga framework that takes legal revisions into full account.
Unit: Person
10,000＊ Onsite workers at the last month of each quarter

9,000
8,000

7,000

Declined by approx. 5,200

6,000
5,000
4,000
3,000

Forecast

2,000

1,000
0
Mar

Jun

Sep

Dec

Mar

Jun

2008
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

Sep

Dec

2009

15

Technology Oriented Placement Business
Trends in Onsite Workers and Outlook on the Future《 1Q/2Q Trends 》
We reduced 30% of our onsite workers in the wake of contract cancellations from the start of the year
to the end of March, at which time we focused on earnings over sales growth. We also streamlined ourorganization and reduced costs to improve profitability.

《 Outlook 》
While we do not see contract cancellations on the scale of that which occurred during the 1 st half,
the placement pace remains sluggish; aggressive measures will be needed to maintain the situation
as it exists now. Instead, we see the present as a step to prepare for a recovery from next fiscal year.
Unit: Person＊ Onsite workers at the last month of each quarter

2,000
1,800
1,600

Declined by approx. 620

1,400
1,200
1,000
800
600
400

Forecast

200
0
Mar

Jun

Sep

Dec

Mar

Jun

2008

Sep

Dec

2009
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

16

R&D Placement Business
Trends in Onsite Workers and Outlook on the Future《 1Q/2Q Trends 》
Because we specialize in placement services for researchers, we were spared from adverse impact.
Pharmaceutical manufacturers were also spared from the recession, while chemical companies were lessfortunate. Given the situation, we redirected our workers to work sites where their skills were compatible.
As a result, the reallocation of employees on standby proceeded smoothly.

《 Outlook 》
Compared to the 1st half, demand from chemical manufacturers is on the rise. Manufacturers that previously
refrained from hiring graduates are now starting to hire them, and our R&D Placement Division is moving
aggressively to meet our clients’ needs.
Unit: Person＊ Onsite workers at the last month of each quarter

400

350
300

250
200
150
100

Forecast

50

0
Mar

Jun

Sep

Dec

Mar

Jun

2008

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

Sep

Dec

2009

17

Outlook and Industry Trends

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved18Outlook
GDP: Expecting a major recovery in January-March 2010 as specific industries rush to meet demandin advance. The key will be what production methodologies manufacturers will adopt at that time.
Unemployment Rate: Shifting from stagnant to recovery. Employment had been stable as companies
shifted from permanent to non-permanent workers and offered varied compensation packages. But thecollapse of Lehman Brothers and its aftermath led to a rapid deterioration. We expect the jobless rate
to recover at a gradual rate in line with the GDP recovery.

Forecast
14000

8
6

12000

4
10000

2

8000

0

6000

-2
-4

4000

-6
2000

-8

0

-10

Onsite Workers

Net Sales

Real GDP

Unemployment Rate

Source: Estimates based on the Health, Labour and Welfare Ministry’s ―Trends and Features of the Labour Economy‖ andannual real growth rates announced by the Cabinet Office.
。
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

19Developments Brought on by Environmental Changes
Key to outsourced contracting services for clients is whether the provider is fully compliant
with regulations
・ Providers with weak financial fundamentals are losing orders as they cannot afford the investment
to fulfill their outsourced contracting contract
・ The larger the client-manufacturer, the more demanding they are for confirmation of a provider’sfinancial fundamentals and compliance framework when a new outsourced contracting contract isabout to be concluded or when transitioning to such a contract
・ The provider that offers fully compliant services, which reduces risks to the client, has the competitiveedge and will see higher order inflows

Reasons for Increased Orders

Current Situation

In the Future

Outsourced Contracting Contracts< Temporary Placement Contracts

Outsourced Contracting Contracts> Temporary Placement Contracts

Compliance Framework → Easy

Compliance Framework → Difficult

Financial Fundamentals → Weak

Financial Fundamentals → Strong

Providers with weak financial fundamentals cannot afford to fulfill outsourced
contracting contract. Clients clearly assume risks with such providers.
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved20Legal Revisions (Risk Factor)
When the law is revised, the manufacturing outsourcing industry will evolve even further.
・ Divided between providers that can cope with the legal revision and those that cannot, the latter will be
incurring a major risk. Providers that can cope will enhance their competitive edge.
《Political Parties》
・ Prohibition of
manufacturing temporary
placement
・ Prohibition of per diem
placement《Supervising Ministries
and Agencies》
・ Promoting outsourced
contracting《Outsourcing providers
who can’t cope with legal
changes》
・ Decreased sales fromtemp placement services
・ Decreased sales
from outsourced
contracting services

Shakeout
will worsen

・ Outsourced contracting expertise・ Financial strength to invest in human resources development, regulatory complianceand tangible assets

Providers with these two strengths will further accelerate the industry’s evolution

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

21

Seminars on Outsourced Contracting
Directly instruct supervisors of client manufacturing sites—those using other providers and facing
outsourced contracting issues—on outsourced contracting.

Clients’ Needs and Major Issues
Clients are seeking specific solutions enabling them to convert temporary placement to outsourced contracting contracts
at the shop floor-level.
・ Beginning with the 2009 Issue, makers want to convert to outsourced contracting but can’t, fearing that it would cause
too much confusion on the shop floor.
・ Makers adopt outsourced contracting that abides by Notification No. 37 but it is too inflexible and unrealistic,
and thus unable to meet the real-world demands of the shop floor.
・ The conversion to outsourced contracting stalls, overwhelmed by a host of minor unresolved issues, and the makerresorts to direct employment as a result.

Main Purpose of Seminar
The point is not to develop an outsourced contracting model that abides by Notification No. 37, but to develop one
abiding by the notification together with our clients and their people on the shop floor.

Seminars leads to orders received from 10 makers for 500 workers in 6 months
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

22

Our Evolving Outsourced Contracting Expertise
Clients choose us because our outsourced contracting service is based on and shaped by pastexamples and experiences
・ The outsourced contracting model that we co-developed with client-manufacturers and supervising public agencies,
serves as a knowledge base to secure new contracts.
・ We have a track record of success, securing regulatory verification for each and every outsourced contracting chartdeveloped for each and every client.
・ This track record not only reinforces our knowledge base, it is our core competitive strength.

Outsourced Contracting Expertise《 Chart of Outsourced Contracting Model 》《 Actual Examples of Outsourced Contracting 》

Outsourced Contracting Ratio

65％（as the end of December）

100.0%

37％（ as the end of June） 80.0%
60.0%

Temp Placement
Sales

40.0%

20.0%

Outsourced
Contracting
Sales

0.0%
Jan Feb Mar Apr May Jun

Jul Aug Sep Oct Nov Dec

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved23

Our View on Human Resource Usage
DirectEmployment

・ Permanent Employees: No restriction on employment period, but costly
・ Seasonal employees: 3-year restriction on contract term・ Part-timers: No restriction on contract term, but employers must offer compensation similar tothat given to a permanent employee if the part-timer carries out similar tasks or assignments;
turnover and layoffs are a risk

Manufacturing
Temp Placement

・ Best as short- and medium-term solution
Not a long-term solution due to contract term restriction

Outsourced
Contracting

・ Best as mid- to long-term solution
・ Allows for cost reduction and can improve production system and product quality
・ Conversion to outsourced contracting requires more time to complete
・ Providers lacking proper knowledge base cannot offer the service

Directemployment

Permanent
workers
Seasonal
workers

Contract Term Cost

Production Swings
Response

Hired byAdministration

Risks

No restriction HighBy Client

By client

By client

Costs are fixed

Up to 3 years Medium By Client

By client

By clientCan’t extend longer than 3 years

By Client

By client

By client

If duties can’t be separated, thenequal pay for equal work

By temp staff firms(workforce adjustment)
By outsourced
contracting providers(production output
adjustment)

Temp staff
agencyTemp staff
agencyRetention rate volatility

Outsourcing
agencyOutsourcing
agencyTakes time to start up

Part-time workers No restriction Low
Temp staff at manufacturing sites Up to 3 years Medium

Outsourced contracting

No restriction Low

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved24Our Initiatives

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

25Government Contract Business
Human Resource Development = New Partnerships
The business involves the government and 300 companies, including TOSHIBA CORP., TOYOTA MOTOR
KYUSHU, INC., Oita Canon, Inc., Asahi KASEI MICROSYSTEMS KYUSHU CO., LTD. and NEC Corp.,
to develop human resources.

《 Projects Contracted Since 2008 》
Contracted Projects

Client

IKKAN

Kyushu Bureau of Economy, Trade andIndustry

Human resource development for the semiconductor
and related industries

Kitakyushu Foundation for the Advancementof Industry Science and Technology

Human resource development for manufacturing
companies

Fukuoka Prefectural Government

Human resource development for companies in the
Kitakyushu area

Kitakyushu City Government

Overseas alliance businesses

Kyushu Bureau of Economy, Trade andIndustry

Human resource development program for local
automotive electronics firms

Kitakyushu Foundation for the Advancementof Industry Science and Technology

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

26

Government Contract Business

IKKAN
Objective
To develop and secure human resources for the purpose of enhancing the competitivenessof the semiconductor industry in Kyushu
The goal of the IKKAN project is to develop human resources to enhance the competitivenessof the Kyushu-area semiconductor industry. It offers training programs so that university undergraduatesand graduate students can gain knowledge and firsthand experience of chip making processes in their
entirety. In doing so, the hope is to recruit a steady pool of young talent for the industry at a time
when Japan faces a conflicting dynamic in which the population is growing older, yet the birthrate
is declining, and an increasingly number of youth are showing little interest in engineering and the sciences.

《 Target Group 》
University undergrads and graduate students《 Participants To Date 》
91 students《 Participating Companies 》
・Asahi KASEI MICROSYSTEMS KYUSHU CO., LTD.
・NEC Corp.,
・Oita Canon, Inc.,
・Sony Semiconductor Kyushu Corp.,
・TOSHIBA CORP.,
・TOYOTA MOTOR KYUSHU, INC., (in alphabetical order)•

Through this and other initiatives, IKKAN aims to train a total ofsome 400 people—or 1% of the approx. 40,000 workers engaged
in Kyushu’s semiconductor industry—by the end of fiscal 2010.
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved27Government Contract Business
Human resource development for manufacturing companies
Objective
To properly sustain and carry forward superior expertise by developing and securing a pool ofyoung workers
In order to encourage the men and women who are to shoulder the future, we are conducting a series ofseminars so that young people may acquire an interest in and find occupations in the manufacturing sector.

《 Recruitment Website 》《 Specific Initiatives 》
・ Seminars on manufacturing
・ Company tours
・ One-day courses
・ Seminars on human resources development
・ Company forums《 Target Group 》
Job seekers aged in their lower 30s《Target Number of Participants》
500 people

http://www.witc.co.jp/mono/
Copyright © WORLD INTEC CO.,LTD. All Rights Reserved28

Government Contract Business
Rather than developing standard B2B worker placement business models, we aim todevelop a new B2C business model for human resources development that specificallyaddresses the need of each individual over the long-term.

Human Resources

Human Resources
Business(Human Resources
Development)

Public Sector

Developed Human
Resources
Revitalized Local
Communities

Private Sector

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved

29Initiatives for Future Growth

Building Trust with Clients
Changes in the environment surrounding the industry
Initiatives as a powerful partner working with clientmanufacturers to ensure mutual survival and trust

Carrying forward production expertise and technologies●Partnership with the government●Seminars on outsourced contracting●Programs on human resource usage

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved30

Contact Information

WORLD INTEC CO., LTD.
Hiroshi Kudo (Mr.)
Corporate Spokesperson
Corporate Management OfficePhone+81-3-3516-1122

E-Mailirinfo＠witc.co.jp

URL

http://www.witc.co.jp/

A cautionary note on forward-looking statements:
This material contains forward-looking statements on the Company and its future businessperformance. The forecasts are developed from a broad base of information collected andcollated by the Company as of the day the business results are announced. Actual results,
however, may differ materially from those projected. Neither the Company nor provider of theinformation contained herein may be held liable or responsible for any loss or damages
resulting from investment decisions based on the content of this presentation.

Copyright © WORLD INTEC CO.,LTD. All Rights Reserved31