Summery of Consolidated Business Results for the First Quarter Ended June 2006
July 31, 2006
Company Name
Nagase & Co., Ltd
Listing Code8012(URL http://www.nagase.co.jp/)
Representative
Position
President
Contact Details
Position
Accounting Division, Manager

Stock Exchanges Listed: Tokyo, Osaka
Location of Head Office: Osaka Prefecture
Hiroshi Nagase
Takahide Osada

Telephone (03) 3665-3103

1. Matters concerning the preparation of the Summary of Business Results for the First Quarter of fiscal 2006
(1) Use of simplified accounting procedures:(Description):
Accounting standard of income and other taxes: The amount of these taxes was calculated using the estimated yearly tax rates
based on the legal effective tax rates.
For some account items with minor effects, a simpler calculation method was used.
(2) Changes in accounting policies compared to recent consolidated fiscal year: Yes(Description):
Change of segment classify(3) Change in the applicable scope of the consolidation and equity method: The applicable scope was changed.
Consolidated Subsidiaries: New: 7 Excluded: 0 Equity method: New: 2 Excluded: 02. Consolidated Business Results for the First Quarter Ended June 2006 (April 1, 2006 – June 30, 2006)
1)Consolidated Operating Results(Note: Amounts have been rounded off to the nearest million yen)
Net SalesFirst Quarter Ended June 2006
First Quarter Ended June 2005
(Reference)
Period Ended March 31, 2006

¥ Millions
171,079
152,182

Operating Income%
12.4
7.8

¥ Millions
5,509
4,515

648,023

Recurring income%
22.0
33.0

¥ Millions
6,226
5,325

17,596

Net (quarterly) income%
16.9
21.4

18,798EPS (quarterly)

Fully Diluted EPS (quarterly)¥ Millions
3,163
3,233%-2.2
21.7

¥
24.71
25.39

¥
First Quarter Ended June 200624.61
First Quarter Ended June 2005
25.33
(Reference)
12,892100.33100.05Period Ended March 31, 2006
Notes:
Figures shown in percentage of sales, operating income and other items show the ratios of sequential changes comparedwith the first quarter of 2005.

Total Assets

Shareholder's Equity Shareholder's Equity Ratio2) Consolidated Financial Position

First Quarter Ended June 2006
First Quarter Ended June 2005
(Reference)
Period Ended March 31, 2006

¥ Millions
390,569
341,891¥ Millions
200,240
168,965

%
49.8
49.4

Shareholders Equity PerShare¥
1,518.15
1,326.64

396,773196,620

49.6

1,535.70

Net Cash Used for
Financial Activities¥ Millions-4,390
829

Balance of Cash and Cash
Equivalents at Term End¥ Millions
17,63521,9849,33022,9363)Consolidated Cash FlowsFirst Quarter Ended June 2006
First Quarter Ended June 2005
(Reference)
Period Ended March 31, 2006

Net Cash fromNet Cash Used for
operating activities Investment Activities¥ Millions¥ Millions-929-876
2,332
554-2,341-3,809

3. Consolidated Forecasts for the Year Ended March 31, 2007 (April 1, 2006 - March 31, 2007)
No change has been made to the forecasts published on April 28, 2006 both for the subsequent quarters and for the entire fiscal year.
Net Sales
Recurring Income
Net Income¥ Millions¥ Millions¥ Millions
Interim Period
347,000
11,3006,700
Whole Year
694,000
22,70013,600(Reference) Expected EPS(Whole Year) ¥ 106.24*The above forecasts were prepared on the basis of information available on the date of release. Actual results may differ from these
forecasts due to various factors.

Business Performance and Financial Position[Business Performance]

Summary of Overall Company Performance
The Japanese economy in the first quarter of the fiscal year continued to experience steady expansion on
the back of the increase in capital investment by companies and the growth in consumer spending. On theother hand, uncertainties remain as exemplified by concerns over the slowdown of the U.S. economy,
trends in domestic and overseas stock markets, the surge in crude oil prices, etc.
Under these circumstances, our quarterly business performance was 101.63 billion yen in domestic sales,
up 8.2% year-on-year, and 69.44 billion yen in overseas sales, up 19.1% year-on-year, resulting in net salesof 171.07 billion yen, up 12.4% year-on-year.
On the income front, operating income increased 22.0% year-on-year to 5.5 billion yen, thanks to thegrowth in sales, etc. However, net income for the quarter decreased 2.2% year-on-year to 3.16 billion yen,partly due to the substantial decrease in the gain on sale of property, plant and equipment compared to theprevious corresponding period.

Segment Summary
Some business segments have been redefined for this fiscal year.
redefinition, please refer to “4. Segment Information” on page 6.

For further information on the[Chemicals]
Sales: 60.84 billion yen

Year-On-Year Comparison: Up 11.3%

In the chemicals segment, sales substantially increased in the Performance Chemicals Department
including automotive-related products such as paint materials and urethane materials on the back of briskoverseas sales. Furthermore, sales expanded in the Colors & Imaging Department, which deals in“colors” such as pigments including printer and copier inks and toner materials, as well as in the Specialty
Chemicals Department, which deals in raw materials of specialty chemicals such as surface active agentsand industrial oil solutions. As a result, the chemicals segment performed well across the board.

[Plastics]
Sales: 59.48 billion yen

Year-On-Year Comparison: Up 13.9%

In the plastics segment, sales of engineering plastics for armoring materials for precision equipment such as
printers and copiers and general-purpose plastics continued to grow by a large margin in the so-called
Greater China region (China plus Hong Kong and Taiwan). Sales also substantially increased in theASEAN region, especially in Thailand and Singapore. Sales in the Automotive Solutions Department-2-expanded, while sales of housing equipment and construction materials also increased.
the plastics segment performed well as a whole.

Consequently,[Electronics]
Sales: 36.56 billion yen

Year-On-Year Comparison: Up 24.8%

In the electronics segment, the Electronics Chemicals Department—which deals in formulated epoxy resins
and photolithography chemicals used in the pre-process of liquid crystals and semiconductors—performed
well, as did the Display & Electronics Components Department, which is primarily involved in the
post-process of liquid crystals. Additionally, sales substantially grew in the Information & Functional
Materials Department, which is engaged in the post-process of semiconductors and deals in fine polishingabrasives, surface inspection systems, etc. As a result, sales in the electronics segment dramaticallyincreased overall.

[Life Science]
Sales: 12.6 billion yen

Year-On-Year Comparison: Down 10.8%

In the life science segment, sales of pharmaceutical ingredients and intermediates in the Fine Chemicals
Department decreased, while sales also slightly fell in the Beauty Care Products Department, which sells
cosmetics and health foods. Sales in the life science segment decreased as a whole, due in part to theimpact of the radical review including closing down the underperforming medical care business in theprevious year.

[Others]
Sales: 1.57 billion yen

Year-On-Year Comparison: Down 16.6%

In the field of other products, equipment sales including DVD players with LCD screens more or lessremained at the previous year’s level, but direct sales of DVD movie titles, etc. to general consumers
decreased. Consequently, sales in the field of other products declined overall.

[Financial Position]
Total assets amounted to 390.56 billion yen, a decrease of 6.2 billion yen compared to the end of theprevious fiscal year, primarily due to the decrease in investments in securities associated with the fall instock price, which outweighed the increase in accounts receivable attributable to the increase in sales.
Liabilities amounted to 190.32 billion yen, a decrease of 4.06 billion yen compared to the previous fiscalyear end, mainly due to the decrease in commercial papers and the reduction in deferred tax liabilities
associated with the fall in stock price.
Net assets including minority interests amounted to 200.24 billion yen, a decrease of 2.13 billion yen
compared to the end of the previous fiscal year, mainly due to the decrease in other unrealized holding gain-3-

on securities, which outweighed the increase in retained earnings sourced by quarterly net income.
As a result of the above, the equity ratio increased to 49.8%, an increase of 0.2 percentage points from
49.6% at the previous fiscal year end.

[Status of Consolidated Cash Flow]
Net cash used in operating activities amounted to 920 million yen, as quarterly net income before income
taxes and minority interests in the amount of 6.44 billion yen was outweighed by the increase in operating
capital and the payment of corporate income tax, etc.
Net cash used in investing activities amounted to 870 million yen, as the sale of some investments insecurities was outweighed by capital investment, etc.
Net cash used in financing activities amounted to 4.39 billion yen, mainly due to the repayment ofcommercial papers and borrowings as well as the payment of dividends, etc.
After making adjustments to these figures, including the increase in cash and cash equivalents in theamount of 780 million yen associated with the consolidation of a new subsidiary, the balance of cash andcash equivalents at the end of this first quarter decreased by 5.3 billion yen from the previous fiscal year
end to 17.63 billion yen.

[Financial Forecasts]
At this point in time, no changes have been made to the respective figures in our consolidated interim andfull-year financial forecasts announced on April 28, 2006. No changes have been made to ournon-consolidated financial forecasts either.

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