Translation

Member of the Financial Accounting Standards Foundation

April 13, 2009

Consolidated Financial Results
for the Nine Months ended February 28, 2009
Listed company name:
Stock exchange listing:Stock code:
Location of headquarters:
Website:Representative:
Contact:
TEL:
Scheduled date for submissionof quarterly report:
Scheduled date for beginning of dividend payments:

Toyo Tanso Co., Ltd.
Tokyo Stock Exchange, 1st Section
5310
Osaka, Japan
http://www.toyotanso.co.jp
Junko Kondo, President & Chief Operating Officer
Toshimi Boki, Executive Officer, General Manager,
Accounting Department
81-6-6451-2114 (from overseas)
April 14, 2009-

1. Consolidated financial results for the nine months ended February 28, 2009
(From June 1, 2008 to February 28, 2009)(1) Operating results (cumulative total)(Millions of yen, rounded down)
Percentages indicate changes from the same period in the previous fiscal year.

Net sales

Operating profit

Recurring profit%
Nine months ended
February 28, 2009
Nine months ended
February 29, 2008

Net income

%

%

%

24,554

-

4,478

-

4,106

-

2,416

-

25,676

13.2

6,029

22.1

5,680

11.8

3,516

18.3

Net income per share

Nine months ended
February 28, 2009
Nine months ended
February 29, 2008

Diluted net income
per share

yen

yen

116.55-168.96-(2) Financial position(Millions of yen, rounded down)
Percentages indicate changes from the same period in the previous fiscal year.
Total assets

EquityEquity ratio

Equity per share%yen

As of February 28, 2009

57,21547,82981.7

2,253.38

As of May 31, 2008

57,706

46,52379.0

2,198.73

Reference: Shareholders’ equity
February 28, 2009
May 31, 2008

46,723 million yen
45,606 million yen

12. Dividends
Dividends per share (yen)(Record date)

First quarter end

Interim-end-

Third quarter end

Year-end

0.00

-

0.00
(Actual)Year ending May 31, 2009
(Forecast)
Note: Revision of projected dividends in the quarter under review: None-

Year ended May 31, 2008
Year ending May 31, 2009

Total (Full year)

15.00

15.00
-

-

20.00

20.00

3. Consolidated results forecast for the fiscal year ending May 31, 2009
(From June 1, 2008 to May 31, 2009)

Net sales

Full year

30,500Operating profit%%(11.7)

4,600 (42.7)(Millions of yen)
Percentages indicate changes on a year-on-year basis.
Net income
Recurring profit
Net income
per share%
4,300(44.8)

2,400

%

yen

(53.3)

115.75

Note: Revision of consolidated results forecast in the quarter under review: Yes

4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation): None
(2) Adoption of simple accounting methods and accounting methods specific to the preparation ofquarterly consolidated financial statements: Yes
Note: For details, please refer to ‘4. Others’ in Qualitative Information and Financial Statements on page6.
(3) Changes in accounting policies, procedures, and methods of presentation for preparing theconsolidated quarterly financial statements(those to be described in the section Changes in Significant Items That Form the Basis of Preparations for
Consolidated Quarterly Financial Statements)
i. Changes due to amendment of accounting standards: Yes
ii. Changes due to other reasons: Yes
Note: For details, please refer to ‘4. Others’ in Qualitative Information and Financial Statements on
page 6.
(4) Number of shares outstanding (common stock)i. Number of shares outstanding and issued at the end of period (including treasury stock)
As of February 28, 2009
20,750,688 shares
As of May 31, 2008
20,750,688 shares
ii. Number of treasury stock at the end of period
As of February 28, 2009
16,065 shares
As of May 31, 2008
15,430 sharesiii. Average number of shares during the period (quarter; cumulative period)
Third quarter ended February 28, 2009
20,734,894 shares
Third quarter ended February 29, 2008
20,736,150 shares

2

* Disclaimer regarding appropriate use of forecasts and related points of note
1. Commencing the current fiscal year, the Company is applying the Accounting Standard for
Quarterly Financial Reporting (Accounting Standards Board of Japan Statement No. 12 issued on
March 14, 2007) and the Guidance on Accounting Standard for Quarterly Financial Reporting(ASBJ Guidance No. 14 issued on March 14, 2007). Quarterly consolidated financial statements areprepared according to the Rules for Quarterly Consolidated Financial Statements.
2. The results forecast has been prepared based on information that was available on the date of releaseof this document. Actual results may differ from the forecast depending on various factors. For
further information on the results forecast, please refer to ‘3. Qualitative Information Regarding
Consolidated Results Forecast’ in Qualitative Information and Financial Statements on page 5.
(Reference)Non-consolidated results forecast for the fiscal year ending May 31, 2009
(From June 1, 2008 to May 31, 2009)

Net sales

Full year

22,500Operating profit%%(14.2)

1,100 (75.3)(Millions of yen)
Percentages indicate changes on a year-on-year basis.
Net income
Recurring profit
Net income
per share%
1,600(Note) Revision of non-consolidated results forecast in the quarter under review: Yes

3(62.8)

1,000

%

yen

(65.5)

48.23

[Qualitative Information and Financial Statements]
1. Qualitative Information Regarding Consolidated Operating Results
During the nine months ended February 28, 2009, in addition to dramatic exchange rate
fluctuations, the Japanese economy saw the impact of the increased effects of the financial crisis(originally triggered by the US economy) on the real economy, leading to a rapid deteriorationof economic conditions towards the latter half of the period, including a sharp decline in capital
expenditure and exports. The downward trend in economic conditions in emerging countries
such as China strengthened; this expresses the picture in terms of the global recession as awhole.
In these circumstances, the Toyo Tanso group has focused its efforts on initiatives toencourage domestic and foreign demand, such as promoting a shift towards fast-growing
sectors/regions with a focus on environmental and energy-related products including the priority
field of solar cells; however, the third quarter in particular saw the impact of a trend developingat all companies towards dramatic production and inventory adjustments.
With regard to special graphite products, in addition to requiring a certain level ofadjustments for products used in the processing of single crystal silicon (including 300-mm
wafers) due to the slowdown in the semiconductor market, mainstay Chinese demand for
products used in manufacturing solar cells, which had driven the market as a whole up until thefirst half of the year, entered a major adjustment phase, leading to the beginning of adeceleration in demand in the electronics sector, with the exception of some products such aspolysilicon. The general industries sector as a whole saw a decline, with the slowdown
continuing in products used for electrical discharge machining (EDM) electrodes andmetallurgical products due to the effects of the sluggish auto and construction industries.
In the field of carbon products for general industries, carbon products for mechanicalapplications showed signs of declining from what had been a period of steady growth, including
products used as bearings and sealing materials. Sales of carbon products for electricalapplications saw further declines in demand as a result of the worsening slump in the US andEuropean economies.
In the field of compound materials and other products, despite a good showing by solar cells,
particularly C/C composites, sales of all products weakened due to the impact of falling demandin semiconductors, especially from the third quarter onwards.
As a result of the above performance, consolidated sales for the nine months ended February
28, 2009 fell 4.4% year on year to 24,554 million yen due to the effect of rising raw material
prices in addition to declining sales volumes, along with the rapidly falling demand thatemerged in all sectors, particularly in the third quarter. Operating profit fell 25.7% to 4,478
million yen, recurring profit declined 27.7% to 4,106 million yen, and quarterly net income
slipped 31.3% to 2,416 million yen.
The table below shows sales by product category in the nine months under review.
(Thousands of yen)
Products
Special graphite products
Carbon products for generalindustries(for mechanical applications)
Carbon products for generalindustries(for electrical applications)Compound materials andother products
Related goods
Total

Nine months ended
February 28, 2009
(thousand yen)
12,941,025

Nine months ended
February 29, 2008
(thousand yen)
13,292,404

2,136,619

2,150,521(0.6)

3,186,421

3,657,873(12.9)

5,666,274

5,722,286(1.0)

624,077

853,821(26.9)

24,554,417

25,676,907

(4.4)

4

Year on year (%)(2.6)

2. Qualitative Information Regarding Consolidated Financial Position
Total assets as of February 28, 2009 decreased by 490 million yen from the end of theprevious fiscal year. This was mainly because of a fall in trade notes and accounts receivableof 1,996 million yen as a result of falling sales, a fall of 452 million yen in the life insurance
fund and a 143 million yen appraisal loss on investment securities, despite an increase of 2,165
million yen in inventory due to customers’ stock adjustment and the restoration of a shortage inintermediate stock.
Total liabilities fell 1,797 million yen from the end of the previous fiscal year. This wascaused by a fall of 680 million yen in income taxes payable, a fall of 599 million yen inborrowings and a fall of 514 million yen in other fixed liabilities as a result of factors such as
the payment of retirement benefits for directors after the death of the company’s representative
chairman.
Equity increased by 1,306 million yen from the end of the previous fiscal year following arise in retained earnings as a result of a quarterly net income of 2,416 million yen.
3. Qualitative Information Regarding Consolidated Results Forecast
For the future economic environment, it is expected that the difficult economic conditions
will continue both in Japan and globally for the foreseeable future as a result of the economic
slowdown in the newly emerging economies combined with the large-scale economic downturn
being seen in Japan and the West. Although a trend towards improvements can be seen insome sectors, it would appear that time is still required for a real bottoming out to occur.
With regard to the environment surrounding the Toyo Tanso group, there was a much larger
impact than expected from declining demand because of production and inventory adjustments
for all products as a result of the worsening global recession, and tough underlying conditions
are expected to continue. In the medium and long term, it is expected that demand will start
expanding for high-performance carbon products in the environment and energy-related sector,
including expectations for an expansion in the nuclear power sector and solar cells, for which
global growth is expected, and the progress that has been made with inventory adjustments forcertain products. Under these market conditions, the Toyo Tanso Group will seek to improveunderlying results through measures such as thorough cuts in costs and expenses and thepromotion of improvements to operational efficiency; at the same time, we intend to promote
investments in high-growth and high-added value sectors and strengthen the organization with aview to the future, and are making steady preparations for a recovery in economic conditions.
Based on the above situation, we have altered as follows the forecast for the full fiscal year
ending May 31, 2009, as announced on January 13, 2009.
Revision of consolidated results forecast
Net sales

OperatingprofitForecast previously announced (A)Forecast newly revised (B)33,00030,500

4,600

4,300

2,400

115.75

Change (B-A)(2,500)(1,800)(1,700)(1,300)-(7.6)(28.1)(28.3)(35.1)-

34,531

8,031

7,795

5,143

247.33

Ratio of Change (%)(Reference)
Fiscal year ended May 31, 2008

6,400

Recurringprofit56,000(Millions of yen)
Net income
Net income
per share
(yen)
3,700
178.44

4. Others(1) Changes in significant subsidiaries during the period(changes in specified subsidiaries accompanying changes in scope of consolidation)
None(2) Adoption of simple accounting methods and accounting methods specific to the
preparation of quarterly consolidated financial statements(i) Evaluation methods for inventory assets
Inventory assets for the end of the third quarter under review are calculated by omitting aphysical inspection and using a rational method based upon the physical inspection amountcalculated at the end of the second quarter.
(ii) Tax expense calculation
Tax expenses are calculated by multiplying profit before income taxes by the effective tax
rate, which is reasonably estimated by applying tax-effect accounting to the estimated profit
before income taxes for the fiscal year, including the third quarter under review.
The income taxes-deferred is included in income taxes.
(3) Changes in accounting policies, procedures, and methods of presentation for preparing
the consolidated quarterly financial statements(i) Commencing the current fiscal year, the Company is applying the Accounting Standard for
Quarterly Financial Reporting (Accounting Standards Board of Japan Statement No. 12
issued on March 14, 2007) and the Guidance on Accounting Standard for Quarterly Financial
Reporting (ASBJ Guidance No. 14 issued on March 14, 2007). Quarterly consolidated
financial statements are prepared according to the Rules for Quarterly Consolidated Financial
Statements.
(ii) Changes in evaluation criteria and evaluation method for inventories
Commencing the first quarter under review, the Company is applying the AccountingStandard for Measurement of Inventories (ASBJ Statement No. 9 issued on July 5, 2006).
The evaluation method has been changed from the cost method to the cost method where thebook value (balance sheet value) is reduced in accordance with decreases in profitability.
The effect of the changes on operating profit, recurring profit, and profit before income
taxes is minor.
(iii) Commencing the first quarter under review, the Company is applying the Practical
Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements (Practical Issues Task Force No. 18 issued on May 17,2006) and is making the necessary adjustments for consolidated accounting.
In association with this, retained earnings at the beginning of the quarter increased by 42
million yen. The impact on operating profit, recurring profit, and profit before income taxes
is minor.
(iv) Change in the method of converting the revenue and expenditure of foreign subsidiaries
The revenue and expenditure of foreign subsidiaries were previously converted into yen
based on the spot exchange rate on the closing date. However, commencing the first quarter
under review, they are converted into yen based on the average exchange rate for the period.
The change was made to eliminate the influence of short-term exchange rate fluctuations,and to calculate earnings for the quarter more appropriately in line with the increasing
importance of foreign subsidiaries’ production and sales transactions.
Accordingly, sales increased by 1,088 million yen, operating profit by 264 million yen,recurring profit by 266 million yen and net income before taxes and other adjustments by 266
million yen compared to those under the traditional method.
The effects of the change are described in ‘(5) Segment information’ under Consolidated
Quarterly Financial Statements on page 12.
(v) Application of Accounting Standard for Lease Transactions
6

Finance lease transactions that do not transfer ownership were previously accounted for ina manner similar to accounting for ordinary operating lease transactions. Commencing thefirst quarter under review, however, finance lease transactions are accounted for in a manner
similar to the accounting treatment for ordinary sale and purchase transactions under the
Accounting Standard for Lease Transactions (ASBJ Statement No. 13 issued by the First
Subcommittee of the Business Accounting Council on June 17, 1993 and revised on March 30,2007) and the Guidance on Accounting Standard for Lease Transactions (ASBJ Guidance No.
16 issued by the Accounting Committee of the Japanese Institute of Certified Public
Accountants on January 18, 1994 and revised on March 30, 2007). This is because theaccounting standard and guidance are now applicable to quarterly consolidated financial
statements related to consolidated accounting periods commencing on or after April 1, 2008.
In depreciating the leased assets related to finance lease transactions that do not transfer
ownership, we consider the lease period to be durable years and use the straight-line method,
setting the residual value to zero.
The change has no effect on operating profit, recurring profit, or profit before income
taxes.
Finance lease transactions that do not transfer ownership, which commenced prior to thebeginning of the first fiscal year in which the standard and guidance are applied, continue tobe accounted for in a manner similar to accounting for ordinary lease transactions.
(4) Additional information
Changes in the durable years of tangible fixed assets
Commencing the first quarter under review, the Company and its domestic consolidated
subsidiaries reviewed and shortened the durable years of tangible fixed assets in the wake of therevision of the legal durable years of machinery and equipment in the tax system revision forfiscal 2008.
Accordingly, operating profit, recurring profit and net income before taxes and otheradjustments decreased by 274 million yen respectively.
The effects of the changes are also described in ‘(5) Segment information’ under Consolidated
Quarterly Financial Statements on page 12.

7

5. Consolidated Quarterly Financial Statements(1) Consolidated balance sheets(Thousands of yen, rounded down)
As of February 28, 2009
AmountAssetsCurrent assets
Cash on hand and in banks
Trade notes and accounts receivable
Merchandise and finished goods
Work in process
Raw materials and stores
Other
Allowance for doubtful accounts
Total current assets
Fixed assets. Tangible fixed assets
Buildings and structures
Machinery, equipment, and vehicles
Land
Construction in progress
Other
Total tangible fixed assets
Intangible fixed assets
Investments and other assets
Total fixed assets
Total assets

8

As of May 31, 2008
Amount13,595,056
8,995,668
4,134,890
4,088,255
1,167,026
1,811,269(115,014)
33,677,152

13,642,899
10,992,382
2,915,957
3,276,681
1,031,929
1,261,971(139,261)
32,982,561

6,133,452
8,422,882
5,343,390
794,483
495,643
21,189,851
357,806
1,990,865
23,538,523
57,215,675

6,176,874
8,755,666
5,380,948
475,397
480,917
21,269,806
376,647
3,077,541
24,723,995
57,706,556

(Thousands of yen, rounded down)
As of February 28, 2009

As of May 31, 2008

AmountAmountLiabilities
Current liabilities
Trade notes and accounts payable
Short-term borrowings
Accrued amount payable
Income taxes payable
Reserve for employees’ bonuses
Reserve for directors’ and corporate
auditors’ bonuses
Other
Total current liabilities
Long-term liabilities
Long-term borrowings
Reserve for employees’ retirement
benefits
Other
Total long-term liabilities
Total liabilities

2,807,060
1,009,707
2,446,840
288,801
503,225

2,309,322
1,277,401
2,694,254
969,107880,30938,88051,842

1,452,966
8,547,482

1,279,782
9,462,020

92,112423,980

308,072

147,111

438,045838,231
9,385,713

1,149,846
1,720,938
11,182,958

7,692,575
9,534,686
30,706,482(56,820)47,876,923

7,692,575
9,534,686
28,558,305(53,599)
45,731,968

855

29,684(1,154,703)(1,153,848)(155,283)(125,598)

1,106,885
47,829,961
57,215,675

917,228
46,523,598
57,706,556

EquityCommon Stock
Capital surplus
Retained earnings
Treasury stock - at cost
Total Shareholders’ Equity
Unrealized gains (losses) on
available-for-sale securities
Foreign currency translation adjustments
Total
Minority interests
Total equity
Total liabilities and equity9(2) Consolidated quarterly statements of income
Nine months ended February 28, 2009
(Thousands of yen, rounded down)Nine months ended February 28, 2009
Amount24,554,417
15,435,547
9,118,869
4,640,124
4,478,745

Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Dividend income
Dividends earned
Gain on foreign currency option
Other
Total non-operating income
Non-operating expenses
Interest expenses
Valuation loss on investment securities
Foreign exchange loss
Other
Total non-operating expenses
Recurring profit
Extraordinary profit
Gain on sale of fixed assets
Gain on sale of investment securities
Insurance benefits received
Subsidies received
Total extraordinary profit
Extraordinary losses
Loss on sale of fixed assets
Loss on disposal of fixed assets
Valuation loss on investment securities

74,0297,847
108,479
30,508220,864
26,801
141,872
412,40212,489593,565
4,106,044
1,033
100
134,001
5,626
140,760
1,118
27,051
1,798

Total extraordinary losses

29,967

Profit before income taxes

4,216,836

Income taxes
Minority interests
Net income

1,455,840
344,418
2,416,577

10

(3) Consolidated quarterly statements of cash flows(Thousands of yen, rounded down)Nine months ended February 28, 2009
AmountCash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill

4,216,836
2,402,109
8,179
148,155

Increase (decrease) in reserve for employees’ retirement benefits
Insurance benefits received
Decrease in long-term accrued amount payable (directors’
retirement benefits)
Increase (decrease) in reserve for employees’ bonuses
Increase (decrease) in reserve for directors’ bonuses
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Foreign exchange loss (gain)
Valuation loss (gain) on investment securities
Gain on sale of tangible fixed assets
Loss on disposal and sale of tangible fixed assets
Decrease (increase) in notes and accounts receivable - trade
Decrease (Increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Other
Sub-total(699,000)(315,118)(12,962)(3,342)(81,877)
26,801
412,402
143,670(1,033)28,1691,634,895(2,593,968)
769,471(140,988)
5,808,399

Interest and dividend received
Interest paid
Insurance benefits received
Income taxes paid

81,741(22,728)
603,869(2,300,593)

Net cash provided by operating activities

4,170,688(134,001)

Cash flows from investing activities
Payments for time deposits
Proceeds from time deposits
Payments for acquisition of tangible fixed assets
Proceeds from sale of tangible fixed assets
Payments for acquisition of intangible fixed assets
Proceeds on redemption of investment securities
Other
Net cash used in investing activities(5,362,645)
2,353,719(3,313,762)
2,470(36,682)
500,000
11,599(5,845,300)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings
Repayment of long-term borrowings
Repayment of finance lease payables
Payments for acquisition of treasury stock
Payments for dividends
Payments for dividends to minority interests
Net cash provided by (used in) financing activities(70,945)(444,718)(1,883)(3,221)(311,028)(22,196)(853,994)(371,838)(2,900,444)
10,491,890
7,591,445

Effect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

11Starting the current fiscal year, the Company applies the Accounting Standard for Quarterly Financial Reporting(Accounting Standards Board of Japan Statement No. 12 issued on March 14, 2007) and the Guidance on
Accounting Standard for Quarterly Financial Reporting (ASBJ Guidance No. 14 issued on March 14, 2007).
Quarterly consolidated financial statements are prepared under the Rules for Quarterly Consolidated Financial
Statements.

(4) Notes regarding the premise of a going concern
Not applicable.
(5) Segment information
a. Business Segment Information
From June 1, 2008 to February 28, 2009
Business segment information has been omitted because the entire business of the Company and its
subsidiaries falls under the single business category of carbon product related business.
b. Geographic Segment Information(From June 1, 2008 to February 28, 2009)(Thousands of yen, rounded down)
Japan

North
America

Europe

Asia

Total

Corporateand Elim.

Consolidated(1) Sales to unaffiliated customers

13,173,867

2,645,825

2,226,109

6,508,615(2) Intersegment sales or transfers

4,414,035

89,241

4,268

79,56924,554,417-

24,554,417

4,587,114(4,587,114)

Total

17,587,902

2,735,066

2,230,377-

6,588,185

29,141,532(4,587,114)

24,554,417

1,773,156

479,223

285,480

1,871,103

4,408,963

69,781

4,478,745

Sales

Operating Profit(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America:United States(2) Europe:France, Germany, Italy(3) Asia:China, Taiwan
3. Unallocated amounts for operating expenses for the above period are not included in Corporate and Eliminations.
4. Change in the method of converting the revenues and expenditure of foreign subsidiaries:
The revenue and expenditure of foreign subsidiaries were previously converted into yen based on the spot exchange
rate on the closing date. However, commencing the first quarter under review, they are converted into yen based on the
average exchange rate for the period. In accordance with this change, sales in “North America,” “Europe,” and “Asia,”
for the nine months ended February 28, 2009 increased by 65,250 thousand yen, 291,966 thousand yen, and 731,063
thousand yen, respectively, compared to those under the traditional method. Operating profit also increased by 11,121
thousand yen, 36,064 thousand yen, and 216,915 thousand yen, respectively.
5. Change in the durable years of tangible fixed assets:
As stated in Additional Information, the Company and its domestic consolidated subsidiaries reviewed and shortened
the durable years of tangible fixed assets for the first quarter under review, in the wake of the revision of the legal
durable years of machinery and equipment in the tax system revision for fiscal 2008. Accordingly, the operating profit of“Japan” for the nine months ended February 28, 2009 decreased by 274,601 thousand yen.

c. Overseas Sales
Nine months ended February 28, 2009 (From June 1, 2008 to February 28, 2009)(Thousands of yen, rounded down)

I

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

North
America

EuropeAsia

Rest of
World

Total

2,461,251

2,680,934

8,375,867

272,603

13,790,656

-

-

-

-

24,554,417

10.0

11.0

34.1

1.1

56.2

(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

(6) Notes if the amount of shareholders’ equity has changed significantly
Not applicable.
12Reference materials
Financial Statements for the Previous Third Quarter(1) (Condensed) Third Quarter Consolidated Statements of Income for Previous Fiscal Year(thousands of yen, rounded down)Nine months ended February 29, 2008
AmountI.

Net sales%
25,676,907

100.0

II. Cost of goods sold15,054,465

58.6

Gross profit

10,622,442

41.4

4,593,146

17.9

6,029,295

23.5

188,6790.7

537,1132.1

5,680,861

22.1

109,970

0.4

60,1880.2

Profit before income taxes

5,730,642

22.3

Income taxes

1,965,962

7.6

248,675

1.0

3,516,004

13.7

III. Selling, general and administrative expenses
Operating profit
IV. Non-operating income

V.

1. Interest income

63,0002. Net realized gain on crude oil swap contracts

79,996

3. Other

45,682Non-operating expenses
1. Interest expenses

58,082

2. Valuation loss on investment securities based on method inwhich valuation losses are recognized as net loss

86,502

3. Net realized loss on crude oil swap contracts

52,396

4. Foreign exchange loss

315,680

5. Other

24,451

Recurring profit
VI. Extraordinary profit
1. Gain on sale of fixed assets

1,305

2. Gain on sale of investment securities

13,5003. Subsidies received

95,164

VII. Extraordinary losses
1. Loss on disposal of fixed assets

55,147

2. Loss on sale of fixed assets

4,262

3. Loss on revaluation of investments in securities

779

Minority interests
Net income13(2) (Condensed) Third Quarter Consolidated Statements of Cash Flows for Previous Fiscal Year(thousands of yen, rounded down)Nine months ended February 29, 2008
AmountI.

Cash flows from operating activities
1. Net income before taxes and other adjustments

5,730,642

2. Depreciation

1,992,815

3. Amortization of goodwill

7,894

4. Decrease in reserve for employees’ retirement benefits
5. Decrease in reserve for retirement benefits for directors andcorporate auditors
6. Decrease in reserve for employees’ bonuses(5,763)(298,707)

7. Decrease in reserve for directors’ bonuses(13,638)

8. Increase in allowance for doubtful accounts

12,592

9. Interest and dividend income(71,689)

10. Interest expenses

58,082

11. Foreign exchange loss

315,680(2,300)12. Loss on revaluation of investments in securities
13. Valuation loss on investment securities based on method inwhich valuation losses are recognized as net loss
14. Gain on sale of tangible fixed assets

779(1,305)

15. Loss on disposal and sale of tangible fixed assets

59,40916. Gain on sale of investment securities(13,500)

17. Decrease in notes and accounts receivable-trade(111,439)

18. Increase in inventories(834,678)

19. Decrease in notes and accounts payable-trade689,743

20. Other(263,472)

86,502Sub-total

7,337,648

21. Interest and dividend received

70,183

22. Interest paid

(54,437)

23. Income taxes paid

(3,229,540)

Net cash provided by operating activities

4,123,854

II. Cash flows from investing activities
1. Payments for time deposits(6,578,402)

2. Proceeds from time deposits

2,441,953

3. Proceeds from redemption of mortgage-backed securities

500,000

4. Payments for acquisition of tangible fixed assets(3,775,562)

5. Proceeds from sale of tangible fixed assets

5,574

6. Payments for acquisition of intangible fixed assets(20,830)

7. Payments for acquisition of investment securities(537,152)

8. Proceeds from sale of investment securities

113,500

9. Payments for additional acquisition of subsidiary’s stocks(124,461)

10. Payments for contribution to capital(10)

11. Other(107,530)

Net cash used in investing activities(8,082,924)14

(thousands of yen, rounded down)Nine months ended February 29, 2008
AmountIII. Cash flows from financing activities
1. Net increase (decrease) in short-term borrowings

60,749

2. Proceeds from long-term borrowings

50,0003. Repayment of long-term borrowings(1,084,279)

4. Payments for acquisition of treasury stock(43,423)

5. Payments for dividends(165,918)

6. Payments for dividends to minority interests(23,899)

Net cash provided by (used in) financing activities(1,206,771)

IV. Effect of exchange rate changes on cash and cash equivalents

1,702

V. Decrease in cash and cash equivalents(5,164,138)

VI. Cash and cash equivalents at beginning of period

11,558,559

VII. Increase in cash and cash equivalents accompanying new
consolidation

76,943

VIII. Cash and cash equivalents at end of period

6,471,36515

(3) Segment Information
a. Business Segment Information
From June 1, 2007 to February 29, 2008
Business segment information has been omitted because the entire business of the Company and its
subsidiaries falls under the single business category of carbon-product-related business.

b. Geographic Segment Information(From June 1, 2007 to February 29, 2008)(Thousands of yen, rounded down)
Japan

North
America

Europe

Asia

Total

15,090,483

2,445,985

2,507,593

5,632,845

25,676,907

Corporateand Elim.

Consolidated-

25,676,907

Sales(1) Sales to unaffiliated customers

4,075,155

137,651

9,713

72,7104,295,230(4,295,230)

-

Total

(2) Intersegment sales or transfers

19,165,638

2,583,637

2,517,306

5,705,555

29,972,138(4,295,230)

25,676,907

Operating Profit

4,053,140

352,359

294,277

1,397,319

6,097,096(67,800)

6,029,295(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. Unallocated amounts for operating expenses for the above period are not included in Corporate and Eliminations.

c. Overseas Sales
Nine months ended February 29, 2008 (From June 1, 2007 to February 29, 2008)(Thousands of yen, rounded down)North
AmericaI

Overseas Sales

II

Consolidated Sales

III

Overseas sales as a proportion of consolidated sales (%)

EuropeRest of
World

Asia

Total

2,378,619

3,001,230

7,540,926

174,993

13,095,770

-

-

-

-

25,676,907

9.2

11.7

29.4

0.7

51.0

(Notes) 1. Countries or regions are grouped together based on geographic proximity.
2. The major countries or regions included in each geographic segment (except Japan) are listed below.
(1) North America: United States(2) Europe: France, Germany, Italy(3) Asia: China, Taiwan
3. The overseas sales are the sales of the Company or its consolidated subsidiaries in countries or regions excluding Japan.

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