Fiscal Year ending October 31, 2007

Summary of Third Quarter Operating Results (Consolidated)
September 7, 2007

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. Operating Results for the Third Quarter of the Fiscal Year Ending October 31, 2007
(November 1, 2006 - July 31, 2007)(Numbers less than one million yen have been rounded down)(1) Consolidated Operating Results
Revenues

Fiscal Year Ending October
31, 2007: Third Quarter
Fiscal Year Ended October
31, 2006: Third Quarter(Reference) Fiscal Year
Ended October 31, 2006

Operating Income

Millions of yen%

Millions of yen%

Millions of yen%

52,237( 4.0 )

3,687

( 20.7 )3,915( 33.4 )50,226( 8.3 )

3,054

–

2,934

–

68,023

–

4,068

–

3,788

–

Net Income

Fiscal Year Ending October
31, 2007: Third Quarter
Fiscal Year Ended October
31, 2006: Third Quarter(Reference)

FiscalYear

Ended October 31, 2006

Ordinary Income

Net Income per ShareNet Income per Shareof Common Stockon a Fully Diluted Basis

Millions of yen

%

Yen

Yen

2,592

(138.1)

78.90

–

1,088

–

36.48

–

1,742

–

57.41

–

(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

(2) Change in Consolidated Financial Position(Numbers less than one million yen have been rounded down)

Fiscal Year Ending October
31, 2007: Third Quarter
Fiscal Year Ended October
31, 2006: Third Quarter(Reference) Fiscal Year
Ended October 31, 2006

Owners’Net Assets per

Equity Ratio

Share

Total Assets

Net Assets

Millions of yen

Millions of yen

87,121

39,94145.8

1,215.93

83,63934,67641.5

1,162.02

86,81538,05143.7

1,155.22%

Yen

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.1

(3) Consolidated Cash Flows(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

4,161－1,218－1,724

19,617

6,885

－151

－3,36817,473

8,414

－489

－3,635

18,398

Fiscal Year Ending October
31, 2007: Third Quarter
Fiscal Year Ended October
31, 2006: Third Quarter(Reference) Fiscal Year
Ended October 31, 2006
2. Dividends

Dividend per
Share(Date of Record)

Third Quarter
Yen

Fiscal Year Ending October－

31, 2007: Third Quarter
Fiscal Year Ended October－

31, 2006: Third Quarter

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2007
(November 1, 2006 - October 31, 2007) (Reference)
Revenues

Full-year

Ordinary Income
Millions of yen

Millions of yen%

Millions of yen%

68,700

1.0

4,600

13.1

Net Income

Full-year

Operating Income

4,700

%

24.1

Net income Per Share

Millions of yen

%

Yen

2,400

3.7

73.05

(Note) The percentages shown for revenues, operating income, ordinary income and net income are the percent increaseor decrease compared to the prior fiscal year

4. Other Matters(1) Were there any changes in material subsidiaries during the quarter under review (changes in
specific subsidiaries in conjunction with a change in the scope of consolidation)? No(2) Has the Company adopted simplified methods for accounting treatment? Yes(3) Are there any differences with the methods of recognition used in the accounting treatment for themost recent consolidated fiscal year? No(Note) For details see Page 7-8 (Qualitative information concerning the financial statements), 4. Other
matters

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.2

5. Summary of Non-consolidated Operating Results(November 1, 2006 - July 31, 2007) (Reference)
Revenues

Operating Income

Millions of yen%

Millions of yen%

Millions of yen%

46,728( 4.4 )

3,441

( 26.9 )3,869( 37.8 )44,745( 9.2 )

2,710

–

2,807

(951.9)60,753

–

3,715

–

3,739

–

Fiscal Year Ending October
31, 2007: Third Quarter
Fiscal Year Ended October
31, 2006: Third Quarter(Reference) Fiscal Year
Ended October 31, 2006

Net Income
Millions

Fiscal Year Ending October
31, 2007: Third Quarter
Fiscal Year Ended October
31, 2006: Third Quarter(Reference)

FiscalOrdinary Income

Year

Ended October 31, 2006

Net Income per ShareNet Income per Shareof Common Stockon a Fully Diluted Basis

of

%

Yen

2,660

(149.2)

80.99

–

1,067

–

35.78

–

1,720

–

56.67

–

Yen

(2) Non-consolidated Financial Position
Owners’Net Assets per

Equity Ratio

Share

Total Assets

Net Assets

Millions of yen

Millions of yen

84,09540,42748.1

1,230.70

80,30435,09443.7

1,176.04

83,51438,37646.0

1,167.90

Fiscal Year Ending October
31, 2007: Third Quarter
Fiscal Year Ended October
31, 2006: Third Quarter(Reference) Fiscal Year
Ended October 31, 2006%

Yen

6. Projected Non-consolidated Operating Results for the Fiscal Year Ending October 2007
(November 1, 2006 - October 31, 2007) (Reference)
Revenues

Full-year

Ordinary Income
Millions of yen

Millions of yen%

Millions of yen%

62,000

2.1

4,300

15.7

Net Income

Full-year

Operating Income

4,700

%

25.7

Net income Per Share

Millions of yen

%

Yen

3,000

74.4

91.31

(Note) The percentages shown for revenues, operating income, ordinary income and net income are the percent increaseor decrease compared to the prior fiscal year

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.3

Note: Explanation concerning appropriate use of the projected operating results and other items to note
The projected operating results were prepared based upon information available to the Company at thetime the projections were announced as well as various assumptions concerning the future economic andbusiness environment. Actual operating results may differ from the projected figures depending uponvarious factors in the future.

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.4

【Qualitative information and financial statements】
1. Qualitative information concerning consolidated operating results(1) < Management Environment >(From May 1, 2007 to July 31, 2007)
During the third quarter, Japan’s economy again maintained its recovery trend, as evidenced byincremental increases in land prices centered on the Tokyo metropolitan area and other positive changes.
Nevertheless, beginning with the growing sub-prime loan problem in the United States, clouds began
gathering over export-related industries, which have been expanding at a steady pace, and a sense ofunease concerning future developments was palpable.
At the same time, the yawning gap that has emerged between different regions in Japan proved
intractable, and personal consumption remained sluggish, affected substantive declines in real income as aresult of the abolition of preferential taxation and increases in the cost of living following the sharp rise in
crude oil prices.
For Kanamoto’s customers in construction-related industries, the severe management environment inlocal areas exhibited a similar pattern, again showing few positive signs of improvement.
(2) < Third Quarter Operating Results >(From May 1, 2007 to July 31, 2007)
Kanamoto’s third quarter overlaps the off season for construction demand. Nevertheless, inconstruction-related businesses that are Kanamoto’s main sector of operations, the Company grew strongly
in accordance with its initial plan as a result of successfully meeting steady demand for construction
equipment rentals. Sales of used construction equipment also increased as planned.
A summary of operating results for each of the Company’s businesses is described below.
[ Business related to the Construction Equipment Rental Division ]A breakdown of equipment rental revenue for the third period, which is included in construction-related
business revenues, shows revenue in the Hokkaido region increased 6.1% over the same period of the priorconsolidated fiscal year, as Kanamoto’s efforts to aggressively meet private sector demand throughout
Hokkaido as public works investment declines met with success. In the Tohoku Region, operating results
were flat year-on-year in both the Tohoku area where redevelopment projects in each prefecture werecompleted, and in the Kanto Shinetsu area, where demand slackened as special procurement related to the
Chuetsu Earthquake that was extended through the previous year came to an end.
In the Kinki-Chubu Region, rental revenue grew strongly because of vigorous equipment rental demand in
the Nagoya area. Lower demand in the Kobe area, however, acted as a significant braking factor, and for thearea overall revenue increased 12.8% year-on-year. In the Kyushu region, Kanamoto was comparatively
successful in capturing available demand, but compared with the same period of the prior consolidated fiscal
year, which was boosted by extensive disaster recovery demand, revenue fell 11.6%. As a result of thesefactors, rental revenue for the Construction Equipment Rental Division in the third quarter increased 2.5%
from the same period of the prior consolidated fiscal year.
Used equipment sales for the division during the third quarter increased 3.7% year-on-year. This was theresult of Kanamoto’s “Thanks Fair,” which the Company held in various areas of Japan for the second year
and established as a local event, and steadily growing sales of modular housing units for temporary use andother products. In addition, market prices for sales of used construction equipment soared as a result ofrobust overseas demand. While revenues from used equipment sales already exceed the Company’s initialplan because of interim period results, third quarter results were nearly identical to plan. Kanamoto willcontinue selling used construction equipment on a timely basis in the future, by monitoring the international
market while optimizing its rental equipment operating periods.
As a result of these changes, revenues for construction-related businesses for the third quarter were 2.9%
higher than in the same period of the prior consolidated fiscal year.

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.5

[ Business related to the Steel Sales Division ]In the steel products sales business, revenues fell 5.8% year-on-year. This mainly reflected a slowdown incondominium demand in the Doou area in Hokkaido.
[ Business related to the Information Products Division and Other Businesses ]In the Company’s information and telecommunications-related division, PC rentals were strong. Personal
computer sales were lackluster, however, as customers refrained from purchasing new models because ofconcerns regarding the installed software. As a result, revenues edged down 4.0% from the same period of
the prior consolidated fiscal year.
(3) < Cumulative Operating Results Since the Beginning of the Fiscal Year >(From November 1, 2006 to July 31, 2007)
Looking at cumulative operating results by business, in the construction-related business revenues
increased 6.2% over the same period of the prior consolidated fiscal year to ¥48,055 million, and operating
income rose sharply by 24.7% year-on-year to ¥3,564 million. In the steel products sales business,revenues fell 17.3% year-on-year to ¥3,857 million, and the division incurred an operating loss of ¥11
million compared with operating income of ¥28 million in the same period of the prior consolidated fiscal
year. The Company’s information and telecommunications-related division had revenues totaling ¥324
million, down 2.2% year-on-year, and operating income of ¥28 million, 1.9% higher than in the samenine-month period of the prior consolidated fiscal year.
As a result of the above, cumulative consolidated revenues through the third quarter of the fiscal year
ending October 2007 were ¥52,237 million, 4.0% higher than in the same period of the prior consolidated
fiscal year.
From an earnings perspective, Company measures to improve rental equipment asset operating efficiency
and reduce the depreciation burden proved effective for the second year. In addition, profit margins
improved because of excellent conditions in the used construction equipment market. As a result,year-to-date consolidated operating income increased 20.7% over the same nine-month period of the priorconsolidated fiscal year to ¥3,687 million.
Consolidated ordinary income for the nine months year-to-date was boosted by gains on the sale of stock
holdings and owned real estate, increasing 33.4% year-on-year to ¥3,915 million, and for the nine months
ended in the third quarter, consolidated net income soared 138.1% over the same period of the priorconsolidated fiscal year, to ¥2,592 million.
(4) < Business development issues deserving special mention and status of branch officechanges >During the third quarter under review, Kanamoto opened its new Hiroshima Branch (Asaminami-ku,
Hiroshima) in June. The Company did not close any branches during the quarter. Furthermore, on May 1
Kanamoto acquired all of outstanding shares of Assist Co., Ltd. (Futsuo Kimura, President andRepresentative Director; Head Office: Otaru, Japan), which is developing a construction industry safety
products rental business in Hokkaido, through an additional acquisition of shares, and converted thatcompany a wholly-owned subsidiary.
In actions taken after the close of the third quarter, the Company re-established a Kanazawa Branch(Kanazawa City, Ishikawa Prefecture) and Itoigawa Branch (Itoigawa City, Niigata Prefecture). Overseas, inJuly Kanamoto formed Shanghai Jinheyuan Equipment Rental Co., Ltd., a business tie-up with Shanghai
Mechanized Construction Co., Ltd. (Chairman of the Board: Cheung Lap Sun) that will focus on construction
equipment rentals. The alliance partner is a subsidiary of Shanghai Construction Group (Chairman of theBoard: Jiang Zhi Quan), a leading construction company that forms one of the largest concerns in Shanghai,
Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.6

China.
2. Qualitative information concerning consolidated financial position(1) Assets, liabilities and net assets
Compared with the end of the same quarter in the prior consolidated fiscal year, total assets increased¥3,481 million to ¥87,121 million. This mainly reflected a year-on-year increase in cash and deposits of¥2,141 million, and an increase in stock of affiliated companies of ¥1,252 million.
Total liabilities decreased ¥1,692 million compared with the end of the same period in the priorconsolidated fiscal year to ¥47,179 million. Major changes included reductions in long-term bank loans due
within one year and long-term bank loans of ¥1,021 million and ¥751 million, respectively, compared withthe end of the same period in the prior consolidated fiscal year.
Total net assets were ¥39,941 million. This was an increase of ¥5,265 million compared with the end of thesame period in the prior consolidated fiscal year. Paid-in capital increased ¥1,099 million year-on-year,
while capital surplus and earned surplus improved ¥1,240 million and ¥2,654 million, respectively,
compared with the end of the same period in the prior consolidated fiscal year.
(2) Consolidated cash flows
Cash flow from operating activities was ¥4,161 million, a decrease of ¥2,723 million compared with theend of the same period one year earlier. This mainly reflected income before taxes and adjustments of¥4,772 million and a large decrease in accounts receivable, trade of ¥2,289 million, a reduction in accounts
payable, trade of ¥1,573 million and payment of corporate and other taxes totaling ¥2,179 million.
Cash flow used in investing activities was ¥1,218 million, ¥1,066 million higher than in the same period of
the prior consolidated fiscal year. The major items affecting cash flow from investing activities were an
increase in funds provided from the sale of tangible fixed assets, which totaled ¥1,849 million, acquisitionsof subsidiary company stock of ¥1,567 million and funds used for the purchase of tangible fixed assets of¥1,841 million.
Cash flow used in financing activities was ¥1,724 million, or ¥1,644 million less than in the same period of
the prior consolidated fiscal year. This mainly reflected an increase in funds provided by long-term bankloans, to ¥8,750 million.
As a result of the above, cash and cash equivalents the end of the third quarter increased ¥2,144 million
compared with the end of the third quarter of the prior consolidated fiscal year, to ¥19,617 million.
3. Qualitative information concerning projected consolidated operating results
Kanamoto’s year-to-date operating results generally exceeded the Company’s initial plan. Afterconsidering the items that had not varied from its full-year projection when the Company released its interim
operating results in June, Kanamoto has not made any changes to its projected consolidated operating
results for the full year at the present time.
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.
4. Other matters(1)Changes in material subsidiaries during the period under review (changes in specific subsidiaries in
conjunction with a change in the scope of consolidation)
The Company had no material items to report.
(2)Adoption of the simplified methods for accounting treatment

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.7

The Company uses book value for inventory.
The Company charges an amount to its allowance for doubtful accounts based on actual loss experience inthe prior consolidated accounting fiscal year for normal accounts.
(3)Differences with the methods of recognition used in the accounting treatment for the most recent
consolidated fiscal year
The Company had no material items to report.

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.8

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

Accounting Fiscal
Accounting Fiscal
Year Ending
Year Ended
October 31,
October 31, 2006)
2007)

Item

(Reference)(Third Quarter of

Period the Consolidated the Consolidated

Consolidated
Accounting Fiscal
Year Ended
October 31, 2006

Change fromprior year

AmountAmountAmountPercent

Amount1．Cash and deposits

17,476,247

19,617,260

2,141,013

12.3%

18,398,312

2．Notes receivable, trade

13,056,302

12,669,492–386,809–3.0%

14,959,325

931,451

831,806–99,644–10.7%

560,2031,231,715

1,069,201–162,513–13.2%

1,193,669

5．Deferred tax assets

197,030

249,432

52,40226.6%

391,803

6．Other

695,956

423,194–272,761–39.2%

752,572

Allowance for doubtful
accounts–534,632–458,859

75,772–14.2%–523,650

Total current assets

33,054,070

34,401,529

1,347,459

4.1%

35,732,235

Rental(1) equipment assets

9,191,749

9,423,181

231,4312.5%

9,358,195

Buildings(2) and structures

6,162,181

6,735,764

573,583

9.3%

6,631,891(3) Land

25,888,335

26,268,316

379,980

1.5%

25,906,130(4) Other

1,486,833

1,037,449–449,384–30.2%

1,227,220

42,729,100

43,464,712

735,611

1.7%

43,123,437

357,245－–357,245-100.0%－－580,407580,407－395,109

Assets（I）

Current Assets

3．Inventory
4．Construction equipment

II

Fixed assets

1. Tangible fixed assets

Total tangible
assetsfixed

2. Intangible fixed assets
Consolidation(1) adjustment account(2) Goodwill(3) Other
Total intangible fixed
assetsInvestments and other3. assets

220,644

142,553–78,091–35.4%

141,585

577,890722,960

145,07025.1%

536,695(1) Investment securities

6,090,202

7,287,175

1,196,972

19.7%

6,224,097(2) Other

2,020,692

2,062,751

42,0592.1%

1,874,002

Allowancefor doubtful accounts–832,213–817,845

14,367–1.7%–674,876

Total
investments
and other assets

7,278,681

8,532,081

1,253,399

17.2%

7,423,223

Total fixed assets

50,585,673

52,719,754

2,134,081

4.2%

51,083,356

83,639,743

87,121,284

3,481,540

4.2%

86,815,592

Total Assets

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.9

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

Current Quarter(Third Quarter of(Third Quarter of
Period the Consolidated the Consolidated
Accounting Fiscal
Accounting Fiscal
Year Ending
Year Ended
October 31,
October 31, 2006)
2007)

Item

AmountAmount11,718,622

2．Short-term bank loansbank loans
3．Long-term
due within one year

(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2006

Change fromprior year

AmountPercent

Amount10,846,120–872,502–7.4%

12,419,337

475,000

425,000–50,000–10.5%

497,704

10,583,996

9,562,356–1,021,640–9.7%

10,077,496

726,130

1,208,615

482,48566.4%

1,365,479

214,603

210,590–4,013–1.9%

511,737

4,125－–4,125–100.0%5,500

7．Accounts payable, other

2,297,230

2,448,648

151,4176.6%

2,676,023

8．Other

1,357,958

779,547–578,410–42.6%

1,017,823

27,377,666

25,480,878–1,896,788–6.9%

28,571,100

17,830,485

17,079,294–751,191–4.2%

16,031,111

1,650,433

1,797,335

146,901

8.9%

1,681,719

125,013

128,714

3,701

3.0%

129,214

1,751,357

2,453,960

702,60340.1%

2,107,836

137,053239,244

102,19074.6%

242,843

21,494,342

21,698,548

204,206

1.0%

20,192,724

48,872,008

47,179,426–1,692,582–3.5%

48,763,825

91,354

－

－

－

－

(
I

Liabilities)

Current liabilities
and accounts
1．Notespayable, tradetaxes
4．Corporate
payablebonuses to
5．Accrued
employees

bonuses to
6．Accrued
directors and auditors

Total current liabilities
II

Long-term liabilities

1．Long-term bank loans
employees
2．Accrued
retirement benefits
Retirement allowances
3．to directors andauditors
accrued4．Long-term
expenses
5．Other
Total long-term
liabilities
Total Liabilities(M i n o r i t y i n t e r e s t s)
Minority interests（Shareholders’ Equity）
I

Common stock

8,596,737

－

－

－

－

II

Additional paid-in
capital

9,720,343

－

－

－

－

14,235,858

－

－

－

－

2,320,478

－

－

－

－

△ 197,037

－

－

－

－

34,676,380

－

－

－

－

83,639,743

－

－

－

－

III
IV
V

Consolidated retained
earnings
Valuation difference onother investment
securities
Treasury stock
Total Shareholders’EquityTotal Liabilities,
Minority Interests andShareholders’ Equity

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.10

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

Period the Consolidated the Consolidated

Accounting Fiscal Accounting Fiscal
Year EndedYear Ending
October 31, 2006) October 31, 2007)

Item

Amount（Net Assets

Amount(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2006

Change fromprior year

AmountPercent

Amount）I Owners’ equity
1. Paid-in capital－

9,696,717－－

9,696,717

2. Capital surplus－

10,960,869－－

10,960,869

3. Earned surplus－

16,890,353－－

14,889,638

4. Treasury stock－–17,053－－– 6,303－37,530,887－－

35,540,922

Valuation difference onother investment
securities－

2,410,970－－

2,418,684

Total Valuation andTranslation
Adjustments－

2,410,970－－

2,418,684

－

－

－

－

92,159Total Net Assets－

39,941,857－－

38,051,766

Total Liabilities and Net
Assets－87,121,284－－

86,815,592

Total Owners’ Equity
andII Valuationtranslation adjustments

III Minority interests

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.11

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

Period the Consolidated the Consolidated
Item

Accounting Fiscal Accounting Fiscal
Year EndedYear Ending
October 31, 2006) October 31, 2007)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2006

Change fromprior year

AmountAmountAmountPercent

AmountI Revenuesof revenues
II Costfrom operations

50,226,123

52,237,886

2,011,763

4.0%

68,023,782

36,699,903

37,424,123

724,220

2.0%

49,745,294

Gross profit

13,526,219

14,813,762

1,287,542

9.5%

18,278,487

Selling, general and
III administrative
expenses

10,471,336

11,126,047

654,711

6.3%

14,210,350

Operating income

3,054,883

3,687,714

632,830

20.7%

4,068,136

1. Interest revenue

451

18,65618,204－2,467

2. Dividend income

38,66950,126

11,45629.6%

40,396

Gain on sale of
3. investment securities

19,862

284,512

264,650－

24,883

4. Rents received

65,741

61,094–4,646–7.1%

90,902

5. Other124,328

199,997

75,66860.9%

157,013

249,053614,387

365,333

146.7%

315,662

1. Interest expense

262,756

304,675

41,91816.0%

357,750

2. Other

106,514

81,467–25,047–23.5%

237,590369,271

386,142

16,871

4.6%

595,340

2,934,666

3,915,959

981,292

33.4%

3,788,458

Gain on sale or
1. retirement of fixed
assets884

921,056

920,171－

50,018Gain on reversal of
2. allowance for
doubtful accounts

12,31020,965

8,655

70.3%

33,270––––275,500

24,977

7,239–17,737–71.0%

35,93638,172

949,261

911,089－394,726

Loss on sale or
1. retirement of fixed
assets

23,76654,967

31,201131.3%

52,366

2. Impairment loss

594,568890–593,678–99.9%

594,568

3. Other

27,17036,735

9,564

35.2%

82,666

IV Non-operating
revenues

Total non-operating
revenues
VNon-operating expenses

Total non-operating
expenses
Ordinary income
VI Extraordinary profits

3. Compensation
received
4. Other
Total extraordinary
profits
VII Extraordinary losses

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.12

Total extraordinary
losses645,504

92,592–552,911–85.7%

729,600

Income before taxes
and adjustments

2,327,333

4,772,627

2,445,293

105.1%

3,453,583

1,146,838

2,022,304

875,46676.3%

1,767,872

71,403

158,194

86,790121.5%–77,965

20,219－–20,219–100.0%21,024

1,088,872

2,592,128

1,503,256

138.1%

1,742,652

Corporate, local andbusiness taxes
Adjustment forcorporate and othertaxes
Minority interest inincomeNet income

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.13

3. (Summary) Third Quarter Consolidated Statement of Changes in Net Assets

Third Quarter of the Fiscal Year Ending October 31, 2007 (November 1, 2006 - July 31, 2007)(Thousands of yen)
Owners’ equity

Balance at the end of the priorconsolidated fiscal year
(October 31, 2006)

Paid-in capital

Capital surplus

Earned surplus

Treasury stock

9,696,717

10,960,869

14,889,638–6,303

Total owners’
equity35,540,922

Change of items during thethird quarter under review
Dividends from surplus–295,732–295,732

Dividends from surplus(interim dividend)–295,682–295,682

Third quarter net income

2,592,128

2,592,128

Purchase of treasury stock–10,749–10,749

Net change of items otherthan owners’ equity during
the third quarter underreview
Total change of items during thethird quarter under review
Balance at the end of thethird quarter under review(July 31, 2007)－－

2,000,714–10,749

1,989,965

9,696,717

10,960,869

16,890,353–17,053

37,530,887

Valuation and translation adjustments

Balance at the end of the priorconsolidated fiscal year
(October 31, 2006)

Valuationdifference on otherinvestment
securities

Total valuation andtranslation
adjustments

Minority interests

2,418,684

2,418,684

92,159Total net assets

38,051,766

Change of items during thethird quarter under review
Dividends from surplus－295,732

Dividends from surplus(interim dividend)－295,682

Third quarter net income

2,592,128

Purchase of treasury stock－10,749

Net change of items otherthan owners’ equity during
the third quarter underreview－7,714－7,714－92,159－99,874

Total change of items during thethird quarter under review－7,714－7,714－92,159

1,890,091

2,410,970

2,410,970－

39,941,857

Balance at the end of thethird quarter under review(July 31, 2007)

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.14

4. (Summary) Third Quarter Consolidated Statements of Cash Flows
Prior FY Quarter

PeriodItem(Unit: Thousands of yen)
Current Quarter(Reference)(Third Quarter of theConsolidated
Accounting Fiscal Year
Ended October 31,
2006)(Third Quarter of theConsolidated
Accounting Fiscal YearEnding October 31,
2007)

Consolidated
Accounting Fiscal Year
Ended October 31,
2006

AmountAmountAmountⅠ Cash flow from operating activities
Income before taxes andadjustments

2,327,333

4,772,627

3,453,583

Depreciation and amortization
expense3,508,240

3,375,363

4,792,624

Impairment loss

594,568890

594,568

Amortization of consolidation
adjustment account78,409－－－125,741

136,546

Gain on sale or retirement of fixed
assets–884－921,056–50,018

Loss on sale or retirement of fixed
assets

23,76654,96752,36645,92387,585125,132

6,162

23,2906,866

475,562

347,858

569,273–1,328,780–1,385,829–1,811,898

New share issuance costs－－

14,762

Valuation loss on investment
securities－

11,016－

Gain on sale of investment
securities–19,862–284,512–24,883

Increase (decrease) in allowancefor doubtful accounts–334,559

78,177–502,887

Decrease in accrued bonuses to
employees–301,192–301,146–4,059

Increase (decrease) in accrued
bonuses to directors and auditors

4,125－5,5005,500

Increase in accrued employees
retirement benefits

124,439

115,615

155,725

Increase (decrease) in retirement
allowances to directors and auditors

14,539–499

18,741

Interest revenue and dividend
income–39,121–68,782–42,863Interest expense on installment
purchases of rental assets

33,63632,27942,906

Interest expense

262,756

304,675

357,750

Increase (decrease) in accounts
receivable, trade

1,272,788

2,289,833–630,235

Increase in inventory assets–392,500–271,238–21,251

Increase (decrease) in accounts
payable, trade

881,004–1,573,216

1,581,719

Amortization of goodwill

Installment purchases of assets forsmall-value rentals
Reclassification of cost of sales
associated with disposal of
construction equipment
Reclassification of cost of sales
associated with disposal of rental
assetsExpenditures for acquisition ofrental assets

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.15

Increase (decrease) in accounts
payable, other76,525–45,067

428,072

Directors and auditors' bonuses
paid－7,300－－7,300

Other814,789–142,571

489,036

Subtotal

8,120,373

6,620,502

9,729,787

39,121

62,29142,863

Interest expense-298,130－341,914－400,061

Payment of corporate and othertaxes－976,278－2,179,169－957,962

Cash flow from operating activities

6,885,085

4,161,709

8,414,626

Interest and dividends received

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.16

Prior FY Quarter

PeriodItem(Unit: Thousands of yen)
Current Quarter(Reference)(Third Quarter of theConsolidated
Accounting Fiscal
Year Ended October
31, 2006)(First Quarter of theConsolidated
Accounting Fiscal
Year Ending October
31, 2007)

Consolidated
Accounting Fiscal
Year Ended October
31, 2006

AmountAmountAmountII Cash flow from investing activities
Funds provided from redemption ofterm deposits

－

－

3,018

Funds used for the purchase ofinvestment securities－409,241－74,572－465,832

Funds provided from sale of investment
securities

1,241,526

492,794

1,353,015

Funds used for the establishment ofaffiliated company－－34,778－

Funds used for the purchase of
consolidated subsidiary stock－－367,200－－50,025－1,199,992－50,025

－210

－

－

－949,875－1,841,359－2,248,477

Funds provided from the sale oftangible fixed assets

30,525

1,849,138

931,262

Funds used for the purchase ofintangible fixed assets－14,693－58,703－14,72960

15,9652,556－151,933－1,218,708－489,212

Decrease in short-term bank loans－102,364－72,704－79,660

Funds provided by long-term bankloans

7,600,000

8,750,000

8,200,000

Funds used to repay long-term bankloans

－8,547,622－8,216,957－11,453,496

Funds used for repayment of
installment obligations－1,771,057－1,582,227－2,271,544

Funds provided by issuance of stock－－

2,182,264

Funds provided from disposal oftreasury stock－－

335,552

Funds used for the purchase oftreasury stock－10,442－10,749－11,781

Payment of dividends to parent
company－537,300－591,414－537,300－3,368,787－1,724,052－3,635,966

Funds used for the purchase ofnon-consolidated subsidiary stock
Funds used for the payment ofinvestment capitalFunds used for the purchase of tangible
fixed assets

Other
Cash flow from investing activities
III

Cash flow from financing activities

Cash flow from financing activities
Ⅳ

Increase in cash and equivalents

3,364,365

1,218,948

4,289,448

Ⅴ

Balance of cash and equivalents at
beginning of period

14,108,863

18,398,312

14,108,863

Ⅵ

Balance of cash and equivalents at
end of the period

17,473,228

19,617,260

18,398,312

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.17

5. Business Segment Information[ Segment information by type of business ]Same quarter of the prior consolidated accounting fiscal year
(From November 1, 2005 to July 31, 2006)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

Revenues

45,229,634

4,664,264

332,223

Operatingexpenses

42,370,639

4,635,946

Operatingincome2,858,995

28,317

Eliminations
or entirecompany

Consolidated

50,226,123－

50,226,123

303,858

47,310,444－139,205

47,171,239

28,3652,915,678

139,205

3,054,883

Total

Current quarter (From November 1, 2006 to July 31, 2007)(Unit: Thousands of yen)
Construction
equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

Revenues

48,055,148

3,857,874

324,862

Operatingexpenses

44,490,188

3,869,794

Operatingincome3,564,959－11,919

Eliminations
or entirecompany

Consolidated

52,237,886－

52,237,886

295,954

48,655,937－105,765

48,550,171

28,9083,581,948

105,765

3,687,714

Total(Reference) Fiscal Year Ended October 31, 2006
(Unit: Thousands of yen)
Construction equipment
rentalbusiness

Steel sales
business

Information
products
businessand otherbusinesses

Revenues

61,102,406

6,485,485

435,890

Operatingexpenses

57,289,724

6,441,515

Operatingincome3,812,682

43,970Eliminations
or entirecompany

Consolidated

68,023,782－

68,023,782

404,783

64,136,023–180,377

63,955,645

31,106

3,887,758

180,377

4,068,136

Total[ Segment information by location ]Current quarter and third quarter of the prior consolidated fiscal year
The Company had no material items to report because the Company did not have any consolidated
subsidiaries or important offices located in countries or regions outside of Japan.

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.18

6. (Summary) Third Quarter Company Balance Sheets(Unit: Thousands of yen, %)Prior FY Quarter Current Quarter

PeriodItem(Third Quarter of (Third Quarter of
the Consolidated the Consolidated
Accounting Fiscal Accounting Fiscal
Year EndedYear Ending
October 31, 2006) October 31, 2007)(Reference)

Change fromprior year

Fiscal Year Ended
October 31, 2006

AmountAmountAmountPercent

Amount1．Cash and deposits
receivable,
2．Notestrade
receivable,
3．Accounts
trade16,529,713

18,871,893

2,342,179

14.2%

17,461,345

2,019,627

1,809,561–210,065–10.4%

2,876,924

9,665,617

9,263,499–402,118–4.2%

10,734,102

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

583,435

462,526–120,908–20.7%

320,863

1,014,695

820,314–194,381–19.2%

968,243

184,607242,886

58,27931.6%

384,442

611,270

319,876–291,394–47.7%

694,408–456,882–390,137

66,744–14.6%–456,245

30,152,085

31,400,420

1,248,335

4.1%

32,984,085(1) Rental equipment

8,893,925

9,191,222

297,297

3.3%

9,087,513(2) Buildings

5,106,472

5,546,665

440,192

8.6%

5,462,248(3) Structures

812,581

967,063

154,48119.0%

933,405(4) Land

25,616,441

25,996,422

379,980

1.5%

25,634,236(5) Other

1,446,314

1,006,025–440,289–30.4%

1,191,381

41,875,735

42,707,398

831,6622.0%

42,308,785

160,526

161,406880

0.5%

147,261

Investment(1) securities

5,979,954

5,923,246–56,708–0.9%

6,115,087

Stock of affiliated(2) companies

1,029,332

2,649,304

1,619,971

157.4%

1,029,332(3) Deferred tax assets

134,096

40,389–93,706–69.9%

50,9332,010,602

2,277,436

266,83413.3%

1,830,127–557,720–498,562

59,157–10.6%–385,941

Assets（）

I Current assets

7. Other
Allowance for
doubtful accounts
Total current assets
II

Fixed assets

1. Tangible fixed assets

Total tangible fixed
assetsfixed
2. Intangible
assetsTotal intangible
fixed assets
and
3. Investments
other assets(4) Other
Allowance for
doubtful accounts
Reserve forinvestment losses
Total investments
and other assets–480,173–565,171–84,99717.7%–565,171

8,116,092

9,826,642

1,710,550

21.1%

8,074,368

Total fixed assets

50,152,354

52,695,447

2,543,093

5.1%

50,530,415

Total Assets

80,304,439

84,095,868

3,791,428

4.7%

83,514,501

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.19

(Unit: Thousands of yen, %)Prior FY Quarter Current Quarter
Period (Third Quarter of (Third Quarter of
the Fiscal Yearthe Fiscal Year
Ended October 31, Ending October
2006)
31, 2007)

Item
（
I

Liabilities(Reference)

Change fromprior year

Fiscal Year Ended
October 31, 2006

AmountAmountAmountPercent

Amount7,924,888

7,458,550–466,338–5.9%

8,246,886）

Current liabilities

1．Notes payable, trade
payable,2．Accounts
tradebank loans
3．Long-term
due within one year

2,162,168

1,960,230–201,938–9.3%

2,522,512

10,435,000

9,408,000–1,027,000–9.8%

9,935,000

4．Accounts
other2,189,199

2,325,034

135,834

6.2%

2,562,743

639,978

1,100,475

460,49772.0%

1,291,556

145,532

152,618

7,086

4.9%

437,693

4,125－–4,125–100.0%5,500

1,450,114

827,333–622,780–42.9%

1,232,666

24,951,006

23,232,242–1,718,763–6.9%

26,234,559

II Long-term liabilities
bank
1．Long-term
loans

16,885,000

16,248,000–637,000–3.8%

15,120,000

accrued2．Long-term
expenses

1,661,177

2,320,538

659,360

39.7%

2,030,031

1,625,023

1,781,221

156,197

9.6%

1,663,537

payable,taxes
5．Corporate
payablebonuses to
6．Accrued
employees
bonuses to
7．Accrued
directors and auditors
8．Other
Total current liabilities

Accrued employees
3．retirement benefits
Retirement
to4．allowances
directors andauditors
Total
long-term
liabilities

87,47686,732

–744

–0.9%

90,261

20,258,676

20,436,491

177,8140.9%

18,903,829

Total Liabilities

45,209,682

43,668,734–1,540,948–3.4%

45,138,388（ Shareholders’ ）EquityI
Common stock

8,596,737

－

－

－

－

9,720,343

－

－

－

－

9,720,343

－

－

－

－

1,375,287

－

－

－

－

19,601－－－－

General reserve
Unappropriatedretained earnings

11,831,684

－

－

－

－

1,431,796

－

－

－

－

Total earned surplus

14,658,370

－

－

－

－

II

Capital surplus

Additional paid-in
capital
Total capitalsurplus
III Earned surplus
Legal earned surplus
Voluntary reserves
Reserve for advanced
depreciation of fixed
assetsSummary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.20

Ⅳ
Ⅴ

Valuation differenceon other investment
securities

2,316,342

－

－

－

－

Treasury stock–197,037

－

－

－

－

35,094,756

－

－

－

－

80,304,439

－

－

－

－

Total Shareholders’EquityTotal Liabilities andShareholders’ Equity

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.21

(Unit: Thousands of yen, %)Period Prior FY Quarter Current Quarter(Third Quarter of (Third Quarter of
the Fiscal Yearthe Fiscal Year
Ended October 31, Ending October
2006)
31, 2007)

Item

Amount（Net Assets

Amount(Reference)

Change fromprior year
AmountFiscal Year Ended
October 31, 2006

Percent

Amount）Ⅰ Owners’ equity
1．Paid-in capital－

9,696,717－－

9,696,717

Capital legal reserve－

10,817,389－－

10,817,389

Other capital surplus－

143,480－－

143,480－

10,960,869－－

10,960,869

2．Capital surplus

Total Capital Surplus

3．Earned surplus
Earned legal reserve

1,375,287

Other earned surplus－

16,005,039－－

13,935,479

Reserve for advanced
depreciation of fixed
assets－

19,601－－

19,601

General reserve－

12,931,684－－

11,831,684

Earned surplus brought
forward－3,053,752－－

2,084,192

Total earned surplus－

17,380,326－－

15,310,766－－17,053－－－6,303

Total owners' equity－

38,020,860－－

35,962,049

Valuation and translation
adjustments
Valuation difference onother investment
securities
Total valuation andtranslation adjustments－

2,406,273－－

2,414,062－

2,406,273－－

2,414,062

Total Net Assets－

40,427,134－－

38,376,112

Total Liabilities and Net
Assets－84,095,868－－

83,514,501

4．Treasury stockⅡ

1,375,287

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.22

7. (Summary) Third Quarter Company Statements of Income(Unit: Thousands of yen, %)Prior FY Quarter Current Quarter

Period (Third Quarter of (Third Quarter of

Item

the Fiscal Yearthe Fiscal Year
Ended October 31, Ending October
2006)
31, 2007)(Reference)

Change fromprior year

Fiscal Year Ended
October 31, 2006

AmountAmountAmountPercent

AmountⅠ Operating revenues

44,745,366

46,728,194

1,982,827

4.4%

60,753,945

Ⅱ Cost of revenues

33,099,255

33,791,092

691,837

2.1%

44,904,830

Gross profit

11,646,111

12,937,102

1,290,990

11.1%

15,849,115

Ⅲ administrative expenses

8,935,367

9,495,943

560,575

6.3%

12,133,316

Operating income

2,710,744

3,441,159

730,41426.9%

3,715,798

1． Interest and dividends

43,66873,332

29,66467.9%

47,758Gain on sale of investment2．
securities

19,862

284,512

264,650－

24,883

3． Rents received

185,291

193,808

8,516

4.6%

250,919

4． Other

187,555

233,261

45,70624.4%

237,818

436,378

784,915

348,537

79.9%

561,380

240,622

280,437

39,814

16.5%

326,636

98,87576,034－22,840－23.1%

211,290

339,498

356,472

16,974

5.0%

537,926

2,807,624

3,869,602

1,061,977

37.8%

3,739,252

Gain on disposal of fixed
assets884

920,700

919,815－50,018

2． Compensation received

－

－

－

－

255,500

17,287

26,574

9,286

53.7%

54,832

18,172

947,274

929,102－360,351

22,41752,54230,125134.4%

49,845

Selling, general andⅣ Non-operating revenues

Total non-operating
revenues
Ⅴ Non-operating expenses
1． Interest expense
2． Other
Total non-operating
expenses
Ordinary income
Ⅵ Extraordinary profits
1．

3． Other
Total extraordinary
profits
Ⅶ Extraordinary losses
1．

Loss on sale or disposalof fixed assets

2． Impairment loss

594,568890－593,678－99.9%

594,568

Transfer to reserve for3．
investment losses

－

－

－

－

84,997

Transfer to allowance for4． doubtful loans toaffiliates

－

－

－

－

17,786

11,88531,014

19,129161.0%

62,518628,870

84,447－544,423－86.6%

809,716

2,196,925

4,732,429

2,535,503

115.4%

3,289,887

1,060,751

1,914,075

853,32480.4%

1,684,230

68,368157,379

89,011130.2%－114,543

1,067,805

2,660,974

1,593,168

149.2%

1,720,201

5． Other
Total extraordinary
lossesIncome before taxes andadjustments
Corporate, local andbusiness taxes
Adjustment for corporate
and other taxes
Net income

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.23

Profit carry-forward fromprior period

632,613

－

－

－

－

Interim dividends

268,622

－

－

－

－

1,431,796

－

－

－

－

Unappropriated retained
earnings

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.24

8. (Summary) Third Quarter Company Statement of Changes in Net Assets

Third Quarter of the Fiscal Year Ending October 31, 2007 (November 1, 2006 - July 31, 2007)(Thousands of yen)
Owners’ Equity
Capital surplus

Earned surplus
Other earned surplus

Paid-in
capitalCapital legal
reserve

Other
capitalsurplusTotal
capitalsurplus10,817,389

143,480

10,960,869

Earned legal
reserve

Reserveforadvanceddepreciati
on of fixed
assets1,375,287

19,601

Generalreserve

Net earned
surplusbrought
forward

Total earned
surplus11,831,684

2,084,192

15,310,766

1,100,000–1,100,000―

Dividends from surplus–295,732–295,732

Dividends from surplus(interim dividend)–295,682–295,682

Third quarter net income

2,660,974

2,660,974

Balance at the end of the priorfiscal year (October 31, 2006)

9,696,717

Change of items during thethird quarter under review
Transfer to generalreserve

Purchase of treasury stock
Net change of items otherthan owners' equity during
the third quarter underreview
Total change of items during
the third quarter under review
Balance at the end of thethird quarter under review(July 31, 2007)

―

―

―

―

―

―

1,100,000

969,559

2,069,559

9,696,717

10,817,389

143,480

10,960,869

1,375,287

19,601

12,931,684

3,053,752

17,380,326

Owners’ Equity
Treasury stock
Balance at the end of the priorfiscal year (October 31, 2006)－6,303

Valuation and translation adjustments

Total Owners’ Equity

35,962,049

Valuation difference onother investment
securities

Total valuation andtranslation adjustments

2,414,062

2,414,062

Total Net Assets

38,376,112

Change of items during thethird quarter under review
Transfer to generalreserve――

Dividends from surplus－295,732－295,732

Dividends from surplus(interim dividend)–295,682–295,682

Third quarter net income

2,660,974

2,660,974－10,749－10,749

Purchase of treasury stock－10,749

Net change of items otherthan owners' equity during
the third quarter underreview－7,788－7,788－7,788

Total change of items during
the third quarter underreview－10,749

2,058,810－7,788－7,7882,051,021

Balance at the end of thethird quarter under review(July 31, 2007)－17,053

38,020,860

2,406,273

2,406,273

40,427,134

Summary of Third Quarter Operating Results (Consolidated)
Fiscal Year Ending October 31, 2007
P.25