Fiscal Year ending October 31, 2006

Summary of Third Quarter Operating Results (Consolidated)
September 1, 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 Third 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?
Yes
Beginning from the current consolidated fiscal year, the Company will apply
the Accounting Standard for Impairment of Fixed Assets.
③ Are than any changes in the scope of consolidation and/or application of theequity method? No
2. Operating Results for the Third Quarter of the Fiscal Year Ending October 31, 2006
(November 1, 2005 - July 31, 2006)(1) Consolidated Operating Results(Numbers less than one million yen have been rounded down)

Revenues

Operating Income

Millions of yen％

Millions of yen

Fiscal Year Ending October
31, 2006: Third Quarter

50,226 (8.3 )3,054 (

Fiscal Year Ending October
31, 2005: Third Quarter

46,374 (4.3 )(Reference) Fiscal YearEnding October 31, 2005

63,975Net Income
Millions of yen

Ordinary Income

％

−

)

Millions of yen

2,934 (

170 (-74.4 )

％

−

)

14 (-97.5 )

1,404

1,550

Net Income per Shareof Common StockNet Income per Shareon a Fully Diluted Basis

％

Yen

Yen

Fiscal Year Ending October
31, 2006: Third Quarter

1,088 (

−

)

36.48

−

Fiscal Year Ending October
31, 2005: Third Quarter-349 (−)-11.71−(Reference) Fiscal YearEnding October 31, 2005

352

11.57

−

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

Summary of Third 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 July 31, 2006)
Despite the effects from negative factors such as high crude oil prices and the risk of an increase in interest
rates, capital investment in sectors such as manufacturing remained on an upward trend, and until the third
quarter, Japan’s economy continued to grow at a steady pace.
Real estate-related activity also remained strong. Nevertheless, for income brackets and regions comprisedof so-called economically weak individuals and areas, there was no change as conditions unrelieved by asense of economic recovery continued. This was reflected in factors such as a slowdown in personal
consumption beginning from June, which until then had been one sign of the economic recovery.
Third Quarter Operating Results
Even though this period included the season when public works are slow, in Kanamoto’s main business in theconstruction-related equipment rental industry construction equipment rentals remained strong, as a resultof the Company’s aggressive business development efforts to secure private sector demand. Equipment
sales in this business also were robust, as both domestic and overseas sales of used equipment exceeded
the same period of the prior consolidated accounting fiscal year.
In the Company’s steel products sales business, orders received for private capital investment, including
new construction of stores and new manufacturing plants in the Sapporo metropolitan area, werecomparatively higher. Kanamoto's information products-related business also achieved stronger
performance, including sales of minicomputers and other products. Operating results in both businesses
improved and exceeded the same period in the prior consolidated accounting fiscal year.
From an earnings perspective, measures implemented over the past several years, including programs to
improve rental equipment asset operating efficiency, maintain unit prices and reduce the depreciation andamortization burden, are now providing tangible benefits. Operating income, ordinary income and net
incomes were all substantially higher than in the same period one year ago.
As a result, consolidated revenues for the third quarter of the fiscal year ending October 31, 2006 increased
8.3% from the same period of the prior consolidated accounting fiscal year to ¥50,226 million. Operating
income increased 1694.6% year-on-year to ¥3,054 million, ordinary income soared 20094.5% over thesame period one year earlier to ¥2,934 million, and net income rose 411.4% over the same period of theprior consolidated accounting fiscal year to ¥1,088 million. Based on the Accounting Standard for
Impairment of Fixed Assets, which Kanamoto will apply from the current consolidated accounting fiscal year,
the Company booked ¥594 million as an impairment loss in the third quarter under review.
A summary of operating results for each of the Company's businesses, and business development issues
deserving special mention, are described below.
< Summary of operating results by business >[ Business related to the Construction Equipment Rental Division ]As stated above, the third quarter of the Company’s fiscal year overlaps the slow season for public works
construction. As the result of aggressively pursuing sales efforts in the private construction sector, however,Kanamoto achieved an upturn in revenues throughout Japan, and positive growth compared with the same
period of the prior consolidated accounting fiscal year.
Looking at construction equipment rental revenues in the third quarter by region, there was no change in the
Hokkaido Region compared with the same period of the prior consolidated accounting fiscal year, while in the
Honshu Region, revenues achieved nearly double-digit growth. Cumulative revenues since the first quarter
also showed similar growth rates when compared with the same period one year earlier. Disaster recovery
work was also a factor behind this improvement, including Kagoshima Prefecture, where recovery work
continues following damage from heavy rains, and Niigata Prefecture, which is recovering from theSummary of Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.2

Niigata-Chuetsu Earthquake.
Looking at other regions, in the Hokkaido Region rentals of equipment such as safety products andtemporary scaffolding were strong. Rentals of temporary scaffolding in particular rose substantially,
increasing 29.5% year-on-year.
Equipment sales by this division were higher both domestically and internationally. This reflected factors
such as steady sales of used equipment in overseas markets, as well as domestic sales, which were boosted
by a sales campaign.
As a result, cumulative revenues since the beginning of the fiscal year for Kanamoto’s construction-related
business rose 8.4% from the same period of the prior consolidated accounting fiscal year.
[ Business related to the Steel Sales Division ]Third quarter revenues increased 7.3% from the same period of the prior consolidated accounting fiscal year.
Orders received for capital investment by private sector firms increased, including condominium
construction in the Sapporo metropolitan area and construction of new manufacturing plants.
[ Business related to the Information Products Division and Other Businesses ]Computer rentals through the third quarter declined 3.0% year-on-year. Sales of information products,
however, recovered and jumped 64.4% compared to the same period of the prior consolidated accounting
fiscal year. As a result, revenues for this division increased 3.2% year-on-year.
< Business development issues deserving special mention and status of branch office changes >During the third quarter under review, in May Kanamoto opened its new Sanjo Branch in Sanjo, Niigata
Prefecture and the Shimukappu Sub-branch in Yufutsu-gun, Hokkaido Prefecture. The Company did not
close any branches during the quarter.
During the fourth quarter, the Company plans to establish two new offices, tentatively named the Omiya
Branch (Nishi-ku, Saitama) and the Chiba Shinko Branch (Mihama-ku, Chiba).
Furthermore, as already reported on August 31, the Company established Shanghai Jinyuan Rental Co., Ltd.
in Shanghai City, China through a joint venture. This firm represents Kanamoto’s first overseas businessventure.

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

Total Assets

Shareholders’EquityMillions of yen

Millions of yen

Shareholders’Equity Ratio％

Shareholders’Equity per Share
Yen

Fiscal Year Ending October
31, 2006: Third Quarter

83,63934,67641.5

1,162.02

Fiscal Year Ending October
31, 2005: Third Quarter

86,15232,31937.5

1,082.53(Reference) Fiscal YearEnding October 31, 2005

81,97733,46540.8

1,120.76

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

P.3

[Consolidated Cash Flows](Numbers less than one million yen have been rounded down)

Balance of Cash
Cash Flow from
Cash Flow from
Cash Flow fromand Equivalents at
Operating
Investing Activities Financing Activities
End of Period
Activities
Millions of yen

Millions of yen

Millions of yen

Millions of yen

Fiscal Year Ending October
31, 2006: Third Quarter

6,885

-151

-3,36817,473Fiscal Year Ending October
31, 2005: Third Quarter

11,609-440-2,745

20,158(Reference) Fiscal YearEnding October 31, 2005

10,219-11-7,833

14,108(Qualitative information concerning change in consolidated financial position)
Compared with the end of the prior consolidated accounting fiscal year, total assets at the end of the third
quarter under review increased ¥1,662 million to ¥83,639 million. This change was mainly from increases incash and deposits, notes payable, trade, consolidated retained earnings and valuation difference on otherinvestment securities.
Net assets increased by ¥1,210 million compared with the end of the prior consolidated accounting fiscal
year to ¥34,676 million yen. The shareholders' equity ratio was 41.5%.
(Cash flow from operating activities)
Cash flow from operating activities was ¥6,885 million yen, a decrease of ¥4,724 million from the same
period of the prior consolidated accounting fiscal year. Although net income before taxes and adjustments
increased, this change mainly reflected the fact that during the current consolidated accounting fiscal year,
the decline in the amount of accounts receivable, trade accompanying the liquidation of bill receivables
scheme introduced in the prior consolidated accounting fiscal year reached a stable level.
(Cash flow from investing activities)
Cash flow used in investing activities decreased ¥288 million from the same period of the prior consolidated
accounting fiscal year to ¥151 million. This mainly reflected an increase in funds used for the purchase of
tangible fixed assets, a decrease in funds used for the purchase of investment securities and an increase infunds provided from sale of investment securities.
(Cash flow from financing activities)
Cash flow used in financing activities was ¥3,368 million, an increase of ¥623 million from the same periodof the prior consolidated accounting fiscal year. This mainly reflected an increase in funds provided bylong-term bank loans and a decrease in funds used for repayment of installment obligations, and a decreasein short-term bank loans.
As a result of the above, the balance of cash and cash equivalents at the end of the third quarter underreview increased ¥3,364 million from the end of the prior consolidated accounting fiscal year to ¥17,473
million.

Summary of Third 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)

F u l l - y e a r

Projected
Revenues

Projected
Operating
IncomeMillions of yen

Millions of yen

Millions of yen

Millions of yen

66,050

3,630

3,420

1,260

Projected
Ordinary Income

Projected Net
Income(Reference) Projected net income per share (full-year) ¥42.21(Qualitative information concerning projected operating results)
Operating results through the third quarter have improved roughly in line with the revised plan Kanamoto
released on May 25. However, although public works will face construction delays from August because of
unseasonable summer heat and typhoons, and small local public work projects also are expected to bedelayed, the Company has not revised the projected consolidated accounting fiscal year operating results it
released previously (also included in the Interim Financial Statements Bulletin released on June 9, 2006).
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 Third Quarter Operating Results (Consolidated),
Fiscal Year Ending October 31, 2006

P.5

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

PeriodItem(Third Quarter of(Third Quarter of
the Consolidated
the Consolidated
Accounting Fiscal Accounting Fiscal
Year Ending
Year Ending
October 31, 2006) October 31, 2005)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2005

Change fromprior year

AmountAmountAmountPercent

Amount1．Cash and deposits

17,476,247

20,166,799-2,690,552-13.3

14,111,882

2．Notes and accounts
receivable, trade

13,056,302

11,331,353

1,724,948

15.2

14,329,090

931,451

781,963

149,48719.1

538,951

1,231,715

1,587,776-356,061-22.4

1,469,376

5．Deferred tax assets

197,030

222,939-25,908-11.6

318,999

6．Other

695,956

1,074,291-378,335-35.2

873,516

Allowance for
doubtful accounts-534,632-650,006

115,374-17.7-923,256

Total Current Assets

33,054,070

34,515,117-1,461,047-4.2

30,718,560(1) Rental equipment

9,191,749

10,247,862-1,056,112-10.3

9,811,304

Buildings and(2) structures

6,162,181

6,605,139-442,958-6.7

6,501,912(3) Land

25,888,335

26,205,408-317,072-1.2

26,140,976(4) Other

1,486,833

1,451,143

35,6902.5

1,084,721

42,729,100

44,509,554-1,780,453-4.0

43,538,915

357,245461,806-104,560-22.6

435,655

220,644

262,825-42,181-16.0

252,765

Total Intangible Fixed
Assets577,890724,632-146,741-20.3

688,421

Investments andOther Assets
Investment
securities(1)

6,090,202

4,941,219

1,148,983

23.3

5,753,056−

506,587-506,587-100.0302,2382,020,692

2,178,856-158,163-7.3

1,754,473（
Ⅰ

Assets）Current Assets

3．Inventory
4．Construction
equipment

Ⅱ

Fixed Assets

1. Tangible Fixed Assets

Total Tangible Fixed
AssetsIntangible Fixed
AssetsConsolidation(1) adjustment account(2) Other(2) Deferred tax assets(3) Other
Allowance for doubtful
accounts
Total Investments andOther Assets-832,213-1,223,694

391,481-32.0-778,148

7,278,681

6,402,968

875,71313.7

7,031,620

Total Fixed Assets

50,585,673

51,637,154-1,051,481-2.0

51,258,957

Total Assets

83,639,743

86,152,272-2,512,528-2.9

81,977,517

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

P.6

(Unit: Thousands of yen, %)Current Quarter

PeriodItem

Prior FY Quarter(Third Quarter of(Third 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

11,718,622

11,779,663-61,040-0.5

10,837,618

475,000

3,558,376-3,083,376-86.7

577,364

10,583,996

10,818,496-234,500-2.2

10,718,496

726,130

142,574

583,556409.3

555,570

214,603

201,137

13,466

6.7

515,796

4,125

−

4,125

−

−

2,297,230

3,142,784-845,554-26.9

2,464,772

1,357,958

641,505

716,453111.7

467,946

Total Current Liabilities

27,377,666

30,284,537-2,906,871-9.6

26,137,564

Long-term
Liabilities
1．Long-term bank loans

17,830,485

19,904,981-2,074,496-10.4

18,643,607

1,650,433

1,425,908

224,525

15.7

1,525,993

125,013125,254

-241

-0.2

110,473

1,751,357

1,964,226-212,869-10.8

1,968,265

137,053

62,19074,863120.4

55,003

Total Long-term
Liabilities

21,494,342

23,482,560-1,988,218-8.5

22,303,342

Total Liabilities

48,872,008

53,767,098-4,895,089-9.1

48,440,907

91,35465,732

25,62239.0

71,1358,596,737

8,596,737−−

8,596,737

9,720,343

9,720,343−−

9,720,343

14,235,858

12,989,248

1,246,609

9.6

13,691,585

2,320,478

1,198,040

1,122,438

93.7

1,643,403-197,037-184,927-12,109

6.5-186,594

34,676,380

32,319,441

2,356,938

7.3

33,465,475

83,639,743

86,152,272-2,512,528-2.9

81,977,517（

Liabilities

Amount）Current Liabilities
1．Notes and accounts
payable, trade
2．Short-term bank loans

Ⅰ

3．Long-term bank loans
due within one year
4．Corporate taxes
payable5．Accrued bonuses to
employees
6．Accrued bonuses todirectors and auditors
7．Accounts payable, other
8．OtherⅡ

2．Accrued employees
retirement benefits
Retirement allowances
3．to directors anddit
4．Long-term accrued
expenses
5．Other

Minority）
Interests
Minority Interests（（ Shareholders’ ）EquityⅠ
Ⅱ
Ⅲ
ⅣⅤ

Common stock
Additional paid-in
capitalConsolidated retained
earnings
Valuation difference onother investment
iti
Treasury stock
Total Shareholders’EquityTotal Liabilities,
Minority Interests andShareholders’ Equity

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

P.7

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

PeriodItem
Ⅰ
Ⅱ

Revenues
Cost of revenues fromoperations

Gross profit
Selling, general andⅢ administrative
Operating income
Ⅳ Non-operating
revenues
1．Interest revenue
2．Dividend incomeon sale of
3．Gaininvestment securities
4．Rents received
5．Other
Total non-operating
revenues
Ⅴ Non-operating
expenses
1．Interest expense
2．Others
Total non-operating
expenses
Ordinary income
Extraordinary profits
1．Gain on sale orretirement of fixedGain on reversal of
2． allowance for
doubtful accounts
3． Other
Total extraordinary
profits
Ⅶ Extraordinary losses
Loss on sale or
1． retirement of fixed
assets
2． Impairment loss

Prior FY Quarter(Third Quarter of(Third Quarter of
the Consolidated
the Consolidated
Accounting Fiscal Accounting Fiscal
Year EndedYear Ending
October 31, 2006) October 31, 2005)(Reference)

Consolidated
Accounting Fiscal
Year Ended
October 31, 2005

Change fromprior year

AmountAmountAmountPercent

Amount50,226,123

46,374,018

3,852,104

8.3

63,975,212

36,699,903

36,019,255

680,647

1.9

48,735,074

13,526,219

10,354,762

3,171,457

30.6

15,240,137

10,471,336

10,184,534

286,801

2.8

13,835,766

3,054,883

170,227

2,884,655−

1,404,371

451

3,472

-3,021

-87.0

3,756

38,66947,026-8,356-17.8

57,14919,862

28,044-8,181-29.2

363,963

65,741

68,194-2,452-3.6

94,173

124,328

144,263-19,934-13.8

197,506

249,053

291,001-41,947-14.4

716,548

262,756

268,393-5,636-2.1

353,256

106,514

178,304-71,789-40.3

217,449

369,271446,697-77,425-17.3

570,705

2,934,666

14,5322,920,134−

1,550,213

884

5,238

-4,354-83.1

57,93012,31090,422-78,112-86.4

24,174

24,977

12,181

12,795105.0

38,92038,172

107,843-69,671-64.6

121,025

23,766

53,957-30,191-56.0

147,388594,568−

594,568−−−

192,465-192,465-100.0255,724

27,17041,397-14,226-34.4

142,271645,504

287,820357,684124.3

545,383

2,327,333-165,444

2,492,778−

1,125,855

1,146,838

83,384

1,063,453−

858,422

71,403

94,398-22,994-24.4-97,079

20,2196,486

13,732211.7

11,8891,088,872-349,714

1,438,586−

352,623

Ⅵ

Transfer to allowance
3． for doubtful accounts
at affiliates
4．Other
Total extraordinary
lossesCurrent quarter (fiscal
year) income (loss) before
taxes and adjustments

Corporate, local andbusiness taxes
Adjustment for corporate
and other taxes
Minority interest inincome or loss
Current quarter (fiscal
year) net income (loss)

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

P.8

3. (Summary) Third Quarter Consolidated Statements of Cash Flows
PeriodItem
I Cash flow from operating activities
Current quarter (fiscal year)
income (loss) before taxes andadjustments
Depreciation and amortization
expenseImpairment loss
Amortization of consolidation
adjustment accountGain on sale or retirement of
fixed assets
Loss on sale or retirement of
fixed assets
Installment purchases of assets
for small-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
Valuation loss on investment
securities
Gain on sale of investment
securities
Increase (decrease) in allowancefor doubtful accounts
Increase (decrease) in accrued
bonuses to employees
Increase in accrued bonuses todirectors and auditors
Increase (decrease) in accrued
employees retirement benefits
Increase (decrease) in
retirement allowances todirectors and auditors
Interest revenue and dividend
incomeInterest expense on installment
purchases of rental assets
Interest expense(Increase) decrease in accounts
receivable, trade(Increase) decrease in inventory
assetsIncrease (decrease) in accounts
payable, trade
Increase (decrease) in accounts
payable, other
Directors and auditors' bonuses
paid
Other
Subtotal

Current Quarter(Unit: Thousands of yen)
(Reference)
Prior FY Quarter(Third Quarter of theConsolidated Accounting
Fiscal Year Ending
October 31, 2006)(Third Quarter of theConsolidated Accounting
Fiscal Year Ended
October 31, 2005)

Consolidated
Accounting Fiscal
Year Ended
October 31,
2005

AmountAmountAmount2,327,333-165,444

1,125,855

3,508,240

3,808,178

5,211,105

594,568−−

78,40978,760106,781-884-5,238-57,930

23,766

53,957

147,388

45,92350,12769,455

6,162

6,110

7,442

475,562

775,411564,032-1,328,780-2,177,107-2,465,393−

372

84,961-19,862-28,044-363,963-334,559-517,963-690,259-301,192-279,459

35,198

4,125

−

−

124,439

197,078

297,163

14,53928,972

14,191-39,121-50,499-60,905

33,63652,223

68,120262,756

268,393353,256

1,272,788

12,149,195

9,151,458-392,500-78,903

164,108

881,004-1,625,939-2,567,984

76,525144,253-195,552-7,300-7,300-7,300814,789-489,937

256,190

8,120,373

12,187,197

11,247,422

Interest and dividends received

39,12150,49960,905Interest expense
Payment of corporate and other
taxes
Increase (decrease) in accounts
payable, trade-298,130-318,283-417,194-976,278-309,624-671,665

6,885,085

11,609,789

10,219,467

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

P.9

(Unit: Thousands of yen)
PeriodItem

Current Quarter

Prior FY Quarter(Reference)(Third Quarter of theConsolidated Accounting
Fiscal Year Ending
October 31, 2006)(Third Quarter of theConsolidated Accounting
Fiscal Year Ended
October 31, 2005)

Consolidated
Accounting Fiscal Year
Ended
October 31, 2005

AmountAmountAmountII Cash flow from investing activities
Funds used for investments interm deposits

−

−

5,000

Funds used for the purchase of
tangible fixed assets-949,875-534,146-484,985

Funds provided from the sale oftangible fixed assets

30,525

132,867

314,122

Funds used for the purchase ofintangible fixed assets-14,693-44,770-50,730

Funds used for the purchase ofinvestment securities-409,241-670,709-1,188,707

Funds provided from sale ofinvestment securities

1,241,526

672,827

1,386,291

Funds used for purchase ofinvestments

-210

−

−

−

2,902

2,902

-50,025

−

−

60

888

4,741

-151,933-440,140-11,364

Increase (decrease) in short-termbank loans-102,364

2,881,736-99,275

Funds provided by long-term bankloans

7,600,000

6,400,000

7,900,000

Funds used to repay long-termbank loans-8,547,622-8,564,122-11,425,496

Funds used for repayment of
installment obligations-1,771,057-2,893,020-3,637,197

Funds used for the purchase oftreasury stock-10,442-2,312-4,118

Payment of dividends to parent
company-537,300-567,305-567,305

Cash flow from financing activities-3,368,787-2,745,023-7,833,393

Increase (decrease) in cash andⅣ equivalents

3,364,365

8,424,626

2,374,708

Balance of cash and equivalents at
Ⅴ beginning of period

14,108,863

11,734,154

11,734,154

Balance of cash and equivalents at
end of the period

17,473,228

20,158,780

14,108,863

Funds provided from the sale ofsubsidiary company stock
Funds used for the purchase ofnon-consolidated subsidiary stock
Other
Cash flow from investing activities
ⅢCash flow from financing activities

Ⅵ

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

P.10

4. Business Segment Information[ Segment information by type of business ]Third quarter (From Nov 1, 2005 to July 31, 2006)(Unit: Thousands of yen)

Steel sales
business

Information
products
business andotherbusinesses

Total

45,229,634

4,664,264

332,223

Operatingexpenses

42,370,639

4,635,946

Operatingincome2,858,995

28,317

Construction
equipment
rentalbusiness
Revenues

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

Third quarter of the prior consolidated accounting fiscal year
(From Nov 1, 2004 to July 31, 2005)(Unit: Thousands of yen)
Construction
equipment

Steel sales
business

Information
products

Total

Eliminations
or entire

Consolidated

Revenues

41,706,993

4,345,045

321,978

46,374,018−

46,374,018

Operatingexpenses

41,692,551

4,325,462

305,937

46,323,951-120,160

46,203,790

Operatingincome14,442

19,583

16,04150,067

120,160

170,227[ Segment information by location ]Third quarter and third quarter of the prior consolidated accounting fiscal year
The Company does not report segment information by location because the Company does not haveany 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, 2006

P.11

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

PeriodItem
Assets（Prior FY Quarter(Third Quarter of(Third 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

Amount16,529,713

18,959,754-2,430,041-12.8

13,230,849

2,019,627

1,975,570

44,0562.2

2,583,873

9,665,617

8,202,178

1,463,438

17.8

10,665,107

583,435

539,782

43,6538.1

311,947

1,014,695

1,301,876-287,180-22.1

1,207,108

184,607

197,621-13,014-6.6

367,932）

Current Assets

Ⅰ

1．Cash and deposits
2．Notes receivable,trade
3．Accounts receivable,
trade
4．Inventory
5．Construction
equipment
6．Deferred tax assets
7. Other

611,270

1,463,223-851,952-58.2

1,299,485

Allowance for doubtful
accounts-456,882-549,346

92,464-16.8-1,001,255

Total Current Assets

30,152,085

32,090,660-1,938,574-6.0

28,665,048(1) Rental equipment

8,893,925

9,844,436-950,511-9.7

9,453,886(2) Building

5,106,472

5,440,032-333,560-6.1

5,344,822(3) Structures

812,581903,681-91,099-10.1

903,297(4) Land

25,616,441

25,933,514-317,072-1.2

25,869,082(5) Other
Total Tangible Fixed
Assets1,446,314

1,412,296

34,0182.4

1,051,658

41,875,735

43,533,961-1,658,225-3.8

42,622,746

160,526

195,097-34,571-17.7

187,284

5,979,954

4,818,752

1,161,202

24.1

5,684,987

1,029,332

1,034,307-4,975-0.5

979,307

134,096

600,860-466,763-77.7

479,224

2,010,602

1,517,556

493,04632.5

1,221,113-557,720-638,224

80,504-12.6-321,855-480,173-280,000-200,173

71.5-480,173

8,116,092

7,053,252

1,062,840

15.1

7,562,603

50,152,354

50,782,311-629,957-1.2

50,372,634

80,304,439

82,872,971-2,568,532-3.1

79,037,683

Fixed Assets
Tangible Fixed
1.
AssetsⅡ

Intangible Fixed
AssetsTotal Intangible
Fixed Assets
Investments and3.
Other Assets
Investment(1) securities
Stock of affiliated(2) companies(3) Deferred tax assets2.

(4) Other
Allowance for
doubtful accounts
Reserve forinvestment losses
Total investments
and other assets
Total Fixed Assets
Total Assets

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

P.12

(Unit: Thousands of yen, %)Current Quarter

PeriodItem（
Ⅰ

Liabilities

Prior FY Quarter(Third Quarter of(Third 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

Amount7,924,888

8,309,802-384,914-4.6

7,214,389

2,162,168

1,917,873

244,29412.7

2,425,623−

3,000,000-3,000,000-100.0−10,435,000

10,650,000-215,000-2.0

10,555,000

2,189,199

3,049,042-859,842-28.2

2,389,330

639,978

120,463519,514431.3

530,934

145,532

147,792-2,260-1.5

448,076

4,125

−

4,125

−

−

1,450,114

714,985

735,128102.8

518,770

24,951,006

27,909,960-2,958,953-10.6

24,082,124

16,885,000

18,800,000-1,915,000-10.2

17,590,000

1,661,177

1,862,211-201,034-10.8

1,876,971

1,625,023

1,399,999

225,024

16.1

1,506,210

87,476

95,352-7,876-8.3

79,121

20,258,676

22,157,563-1,898,887-8.6

21,052,303

45,209,682

50,067,523-4,857,841-9.7

45,134,428

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

1,431,796

268,296

1,163,500

433.7

928,192

14,658,370

13,475,268

1,183,102

8.8

14,135,164

2,316,342

1,198,026

1,118,315

93.3

1,637,603-197,037-184,927-12,109

6.5-186,594

35,094,756

32,805,447

2,289,308

7.0

33,903,254

80,304,439

82,872,971-2,568,532-3.1

79,037,683）

Current Liabilities

1．Notes payable, trade
2．Accounts payable,trade
3．Short-term bank loans
4．Long-term bank loans
due within one year
5．Accounts payable,
other
6．Corporate taxes
payable7．Accrued bonuses to
employees
8．Accrued bonuses todirectors and auditors
9．Other
Total Current
Liabilities
Long-term
Liabilities
1．Long-term bankloans
2．Long-term accrued
expenses
3．Accrued employees
retirement benefits
4．Retirement allowances
to directors andTotal
Long-term
Liabilities
Total Liabilities

Ⅱ

Ⅰ
Ⅱ

Ⅲ

（ Shareholders’ ）EquityCommon stock
Capital surplus
Additional paid-in
capital
Total capitalsurplus
Earned surplus
Legal earned surplus

Ⅳ
Ⅴ

Voluntary reserves
Reserve for advanced
depreciation of fixed
assetsGeneral reserve
Unappropriatedretained earnings
Total earned surplus
Valuation differenceon other investment
Treasury stock
Total Shareholders’EquityTotal Liabilities andShareholders’ Equity

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

P.13

6. (Summary) Third Quarter Company Statements of Income
Current Quarter

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

Ⅰ

Operating revenues

44,745,366

40,975,456

3,769,910

9.2

57,202,641

Ⅱ

Cost of revenues

33,099,255

32,056,353

1,042,901

3.3

43,789,520

11,646,111

8,919,103

2,727,008

30.6

13,413,121

Ⅲ

Gross profit
Selling, general andadministrative expenses
Operating income

8,935,367

8,726,448

208,919

2.4

11,886,610

2,710,744

192,6542,518,089−

1,526,510

1．Interest and dividends

43,66854,938-11,269-20.5

66,7752．Gain on sale ofinvestment securities

19,862

27,890-8,027-28.8

359,093

3．Rents received

185,291

179,910

5,381

3.0

244,052

4．Other

187,555

178,213

9,342

5.2

254,021436,378

440,952-4,574-1.0

923,943

1．Interest expense

240,622

237,877

2,744

1.2

317,034

2．Other
Total non-operating
expenses
Ordinary income

98,875

128,830-29,954-23.3

172,555

339,498

366,708-27,209-7.4

489,5902,807,624

266,899

2,540,725

951.9

1,960,863

884

4,742

-3,857-81.3

57,433

17,287

95,497-78,209-81.9

12,014

18,172100,239-82,067-81.9

69,44722,41742,863-20,445-47.7

120,158594,568−

594,568

−

−

−

−

−

−

29,589−−−−55,000−−−−200,173−

192,465-192,465-100.0407,149

11,88524,358-12,472-51.2

25,275

628,870259,687

369,183142.2

837,348

2,196,925

107,451

2,089,474−

1,192,962

1,060,751

61,322

999,429−

833,579

68,36896,808-28,439-29.4-249,835

1,067,805-50,678

1,118,484−

609,217632,613587,686

44,927

7.6

587,686

268,622

268,711-88-0.0

268,711

1,431,796

268,296

1,163,500

433.7

928,192

Ⅳ

Ⅴ

AmountNon-operating revenues

Total non-operating
revenues
Non-operating expenses

Extraordinary profits
1．Gain on disposal of
fixed assets
2． Other
Total extraordinary
profits
Ⅶ E x t r ao r di n a r y l o s s e s
1． Loss on sale or disposalof fixed assets
2． Impairment loss
3． Valuation loss on
investment securities
4． Valuation loss onaffiliated company stock
5． Transfer to reserve forinvestment losses
Ⅵ

Transfer to allowance for6． doubtful accounts ataffiliates

7． Other
Total extraordinary
lossesIncome before taxes andadjustments
Corporate, local and business
taxes
Adjustment for corporate andother taxes
Current quarter (fiscal year)
net income (loss)
Profit carry-forward from priorperiodCash dividends
Unappropriated retained
earnings

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

P.14