We sincerely appreciate your understanding and continuing support.

It seems that the United States has weathered the worst of the current economic recession, however, the effects of the global financial crisis are still echoing through the markets of Europe and the United States. On the other hand, China and other emerging economies are trending toward recovery—gradual as that trend may be. Japan has been experiencing deteriorating corporate earnings and a difficult employment environment, as the nation suffers the impact of the global economic recession. Despite the lack of a clear future direction, we saw some signs of recovery in the business environment during the second half of the fiscal year.

(TOPCON Group Consolidated Net Sales)
The TOPCON Group saw significant improvements during the second half of the fiscal year. Looking at our full-year results, however, the impact of a stagnating market in Japan, as well as in the United States and Europe, combined with a drop in the projector business in China, made for an extremely difficult operating environment. As a result consolidated net sales for the fiscal year under review amounted to ¥94.862 billion, representing a 15.8% year-on-year decline.

(TOPCON Group Consolidated Profits)
Due to the concerted efforts of the entire organization, we were able to reduce fixed cost by a considerable amount. In addition, during the prior fiscal year we recorded expenses in connection with the revaluation of inventories. As a result of these factors, consolidated operating income amounted to ¥1.405 billion (an ¥8.349 billion year-on-year increase), and consolidated ordinary income amounted to ¥545 million (a ¥9.871 billion year-on-year increase). The TOPCON Group recorded consolidated net income of ¥133 million (a ¥10.126 billion year-on-year increase) for the fiscal year.

(Performance by Segment)
The Positioning Business experienced steady growth in China and other emerging markets. However, the economic downturn in Japan, in the United States and in Europe resulted in the Group recording consolidated net sales of ¥49.35 billion, representing a 15.0% year-on-year drop for the segment. Consolidated operating income amounted to ¥6 million (a ¥5.281 billion year-on-year increase), as fixed cost reduction measures improved the bottom line, despite the drop in net sales.

Our Eye Care Business accounted for ¥31.561 billion in consolidated net sales (5.8% year-on-year decrease), impacted heavily by the market stagnation in the United States and Europe. Consolidated operating income amounted to ¥1.963 billion (21.2% year-on-year increase), improved due to the success of our fixed cost reduction measures.

The Finetech Business recorded consolidated net sales of ¥13.95 billion, representing a 34.0% year-on-year decrease. Despite a strong performance during the prior fiscal year, projector-related products in China experienced a decline during the current fiscal year. While net sales dropped considerably, initiatives to reduce fixed costs and the recording of expenses related to inventory revaluation during the prior fiscal year combined to result in a consolidated operating loss of ¥564 million (a ¥2.724 billion year-on-year improvement) in the segment.

We expect to see a continuing gradual improvement in the global economy, led by growth in China and other emerging markets. We believe that the tone of recovery in Japan will be sustained with the support of exports, responding to a recovery in the worldwide economy. At the same time, stagnant personal consumption, diminishing returns in recovery measures employed by the leading economic nations, and financial restraints among the emerging economies contribute to a continued murky economic outlook. We expect the environment for our business to continue to be challenging.

Given these factors, we forecast consolidated net sales of ¥104.0 billion (9.6% year-on-year increase), consolidated operating income of ¥2.7 billion (92.2% year-on-year increase), and consolidated ordinary income of ¥1.4 billion (156.8% year-on-year increase) for the next fiscal year. We forecast consolidated net income of ¥200 million (49.5% year-on-year increase).

For the purposes of our full-year earnings forecasts, we have assumed exchange rates of ¥90/US$1 and ¥120/Euro1.

The TOPCON Group intends to compete and win in the global market, ensuring profitability and sustainable growth. In pursuit of the spirit of "monozukuri" (conscientious manufacturing)—the essence of the manufacturing industry—we are working to establish a reputation as a highly profitable firm, producing the best-quality products at the lowest cost. We will continue to pursue our TM-1 ("Time to Market No. 1") activities, adopting revolutionary approaches in each Group division and regional location to create a truly superior global company.

Co-existing with society is corporate philosophy of the TOPCON Group. Group companies are active in—and conscientious about—global environment programs, social contribution activities, corporate governance and compliance.

A top priority of the TOPCON Group is to be an entity that positively responds to the trust of shareholders, investors and other stakeholders. Our ideal is to be a company that continues profitable sustainability. We ask for your continued support in our efforts.