Summary of Consolidated Financial Statements for
the First Quarter of the Fiscal Year Ending March 31, 2008
July 31, 2007
Tokyo Stock Exchange, First Section
URL: http://www.nagase.co.jp/english

Nagase & Co., Ltd.
Code number: 8012
Representative: Hiroshi Nagase, President and Representative Director
Contact: Takahide Nagata, Manager of Accounting Division
Phone: +81-3-3665-3103

1. Results for the First Quarter of the Fiscal Year Ending March 31, 2008 (April 1, 2007 to June 30, 2007)(1) Consolidated Operating Results
Note: Amounts in this quarterly report are presented after rounding off numbers less than one million yen.
OperatingOrdinary
Net sales
Year-on-year
Year-on-year
Year-on-year
incomeincome(¥ million)change (%)
change (%)
change (%)(¥ million)(¥ million)
179,508
4.9
5,100
(7.4)
5,828
(6.4)
Three months ended June 30, 2007
Three months ended June 30, 2006
171,079
12.4
5,509
22.0
6,226
16.9
Year ended March 31, 2007——
23,231
701,321—
21,669Net income(loss)(¥ million)

Year-on-yearchange (%)(5,519)3,163
13,567—(2.2)—

Three months ended June 30, 2007
Three months ended June 30, 2006
Year ended March 31, 2007

Earnings per share(¥)

Earnings per share (diluted)(¥)(42.98)24.71
105.85—24.61
105.51(2) Consolidated Financial Position

As of June 30, 2007
As of June 30, 2006
As of March 31, 2007

(3)

Total assets(¥ million)
429,342
390,569
422,859

Net assets(¥ million)
205,980
200,240
211,672

Net worth ratio
(%)
46.4
49.8
48.5

Net assets
per share (¥)
1,550.04
1,518.15
1,597.27

Cash flows fromoperating activities(¥ million)

Cash flows frominvesting activities(¥ million)

Cash flows fromfinancing activities(¥ million)

Cash and cash
equivalents at end ofperiod (¥ million)

Consolidated Cash Flow

(2,024)(929)
10,855Three months ended June 30, 2007
Three months ended June 30, 2006
Year ended March 31, 2007

(2,618)(876)(5,203)276(4,390)(8,420)18,225
17,635
21,9192. Dividends
Not applicable, as the Company does not pay dividends based on first-quarter results.

3. Projected Consolidated Results for the Fiscal Year Ending March 31, 2008 (April 1, 2007 to March 31, 2008)(Percentages represent change compared to the previous interim period or fiscal year, as applicable)

Revenues
InterimFull year(¥ million)
376,000
752,000(%)
9.6
7.2

Operating income

Ordinary income(¥ million)
11,00021,900(¥ million)
11,90023,600(%)
3.8
1.1(%)
4.1
1.6

Net income(¥ million) (%)(500)—
7,100(47.7)

Earnings
per share(¥)(3.89)
55.27

4. Other(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries due to changes in the scopeof consolidation): No(2) Use of simplified accounting methods: Yes(3) Changes in consolidated accounting methods from the most recent fiscal year: NoSee “4. Other” of “Qualitative Information and Financial Statements” on page 3.
About the Projected Consolidated Results
The projected consolidated results for the fiscal year ending March 31, 2008 contained in this document are based on
information currently available to the Company and certain assumptions it considers reasonable. Due to various factors,
actual results may differ materially from the forecast. For cautionary remarks and other issues concerning use of theprojected results, please see “3. Qualitative Information on Projected Consolidated Results” on page 3.
1

Qualitative Information and Financial Statements
1. Qualitative Information on Consolidated Operating Results(1) Summary of Overall Performance
During the first quarter of the fiscal year ending March 31, 2008, the three months ended June 30, 2007, anincrease in capital investment fueled by improved corporate profitability and robust consumer spending supported
steady growth of the Japanese economy. Uncertainty continued, caused by factors including the slowing of theU.S. economy, worldwide stock market trends, persistently high crude oil prices and the prolonged weakness ofthe yen.
In these conditions, domestic sales increased 0.3 percent compared with the same quarter of the previous fiscal
year to ¥101.95 billion and overseas sales increased 11.7 percent to ¥77.54 billion for total net sales of ¥179.5billion, an increase of 4.9 percent.
As for profits, due to an increase in amortization of actuarial gain and other selling, general and administrative
expenses, operating income decreased 7.4 percent to ¥5.10 billion and ordinary income decreased 6.4 percent to¥5.82 billion. At an extraordinary meeting on July 11, 2007, the Board of Directors resolved to voluntarily recall
portable DVD players and other products sold by the Company. This recall resulted in an extraordinary loss of¥14.30 billion, and net loss of ¥5.51 billion for the quarter.
(2) Segment Summary[Chemicals]

Sales: ¥63.14 billion, a 3.8 percent increase from the first quarter of the previous fiscal year

Overall sales were strong in the Chemicals segment. Sales increased in the performance chemicals business,
which handles products such as raw materials for paint and urethane, and raw materials and additives for plastics,
as well as in the speciality chemicals business, which handles a wide range of products including surfactants,
centered on industrial oil solutions and cosmetic ingredients, fluorochemicals, silicone, and organic synthetic
materials, with a focus on liquid crystal. Sales in the color and imaging business, which handles pigments,
dyestuffs and other products related to color, were flat due to an inventory adjustment phase in the display andinkjet printer industries.
[Plastics]

Sales: ¥60.73 billion, a 2.1 percent increase from the first quarter of the previous fiscal year

Sales of engineering plastics for CDs, DVDs and other media decreased significantly, but sales by overseas
subsidiaries in Hong Kong, China and Thailand, mainly for automotive applications, were strong. As a result,overall sales in the Plastics segment increased slightly.
[Electronics]

Sales: ¥40.96 billion, a 12.0 percent from the first quarter of the previous fiscal year

Overall segment sales increased substantially due to growth of the display business caused by a significant
increase in electronics component processing, as well as increased sales of precision abrasive materials forsemiconductors and hard disks and encapsulants for semiconductors in the information and functional materials
business.
[Life Sciences]

Sales: ¥13.50 billion, a 7.1 percent increase from the first quarter of the previous fiscal
year
Sales decreased slightly in the beauty care products business, which handles cosmetics and health foods, but
sales of pharmaceutical intermediates in the fine chemicals business were strong. As a result, overall segment
sales were strong.

[Others]

Sales: ¥1.15 billion, a 26.4 percent from the first quarter of the previous fiscal year

Segment sales decreased due to factors including the transfer in the second half of the previous fiscal year of
the business of direct sales of products such as DVD movie software to end-users.

22. Information on Consolidated Financial Position(1) Assets, Liabilities and Net assets
Total assets increased ¥6.48 billion from the end of the previous fiscal year to ¥429.34 billion mainly due tofactors including an increase in other current assets resulting from an increase in deferred taxes in connection withestablishing a reserve for voluntary recall of products, as well as an increase in notes and accounts receivable due tothe increase in net sales.
Despite a decrease in notes and accounts payable, liabilities increased ¥12.17 billion from the end of the previous
fiscal year to ¥223.36 billion due to factors including the establishment of a reserve for voluntary recall of products
and an increase in short-term loans.
Net assets decreased ¥5.69 billion from the end of the previous fiscal year to ¥205.98 billion due to the net loss
and a decrease in retained earnings due to payment of dividends.
As a result, the net worth ratio decreased 2.1 percentage points to 46.4 percent from 48.5 percent at the end of theprevious fiscal year.
(2) Cash FlowsNet cash used in operating activities was ¥2.02 billion, due to factors including increases in working capital andpayment of income taxes.
Net cash used in investing activities was ¥2.61 billion, as a result of purchases of property and equipment andpurchases of intangible fixed assets.
Notwithstanding cash dividends paid, net cash provided by financing activities was ¥0.27 billion, due to anincrease in short-term loans.
As a result, the balance of cash and cash equivalents at June 30, 2007 was ¥18.22 billion, a decrease of ¥3.69
billion from the end of the previous fiscal year.
3. Qualitative Information on Projected Consolidated Results
Anticipating an extraordinary loss of ¥14.30 billion due to expenses in connection with a voluntary recall of
portable DVD players and other products it sold, on July 19, 2007 the Company announced its revised projectedinterim and full-year consolidated results. At present, there is no change to those projected consolidated results.
4. Other(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries due to changes in thescope of consolidation)
None applicable(2) Use of simplified of accounting methods
Some simplified accounting methods are used, including the estimation of annual tax rates based on theeffective tax rate.
(3) Changes in consolidated accounting methods from the most recent fiscal year
None applicable3