April 21, 2006

Sanix Revises Full-Year Financial Results and Dividend Forecasts


Fukuoka, April 21, 2006 - SANIX Incorporated (Ticker: 4651, TSE/OSE/FSE, President & CEO: Shin-ichi Munemasa) has revised consolidated and non-consolidated financial results forecasts for the year ended March 31, 2006 as well as year-end dividend per share forecast, previously announced on November 16, 2005.

1. Details of revision to financial results
1) Revision to full-year consolidated results forecast

(April 1, 2005 to March 31, 2006)

(Millions of yen)
Net Sales
Recurring Profit
Net Income
Previous Forecast
(as of November 16, 2005)
41,098 
(640) 
(1,452) 
Revised Forecast
36,500 
(3,480) 
(4,260) 
Difference
(4,598) 
(2,840) 
(2,808) 
% Change
(11.2) 
- 
- 
Results from year before
44,083 
(73) 
(10,010) 

2) Revision to full-year non-consolidated results forecast

(April 1, 2005 to March 31, 2006)

(Millions of yen)
Net Sales
Recurring Profit
Net Income
Previous Forecast
(as of November 16, 2005)
39,360 
(760) 
(1,530) 
Revised Forecast
35,040 
(3,590) 
(4,320) 
Difference
(4,320) 
(2,830) 
(2,790) 
% Change
(11.0) 
- 
- 
Results from year before
42,008 
(70) 
(10,099) 

3) Reasons for the downward revision:
During the financial year ended March 31, 2006, fraudulent acts by dishonest housing improvement operators became a serious social issue, giving negative effect to the entire environmental sanitation industry, and discouraging consumers’ trust against door-to-door sales. Under the circumstances, the HS division made effort to improve business performance by emphasizing compliance with applicable laws and regulations to ensure protecting consumers.

However, following the third quarter, the HS divisional sales during the fourth quarter are expected to be significantly less than the previous forecast, which was announced in the Company’s interim financial report. In the ERD division, after Tomakomai power plant had a fire in August, the power plant restarted its operation in December. Though the plant ensured a stable operation, the Company is expecting a decline in revenues from electric power sales compared to the previous forecast as calorific value of plastic fuel was lower than expected. As a result, Sanix is obliged to revise our previous forecast of its consolidated sales for the full year ended March 31, 2006.

Regarding profit/loss, the Company is expecting more recurring loss than the prior forecast due to a decline in revenues in HS division where the marginal profit ratio is high. Consequently, the Company expects more net loss than the previous forecast. As a result, Sanix is obliged to modify the previous forecast of consolidated recurring profit/loss and consolidated net profit/loss for the full year ended March 31, 2006. For the same reason above, the Company has also modified its forecast of non-consolidated sales, recurring profit/loss and net profit/loss for the full year ended March 31, 2006.

2. Details of revision to year-end dividend per share forecast
1) Reasons for the revision:
The Company places returning profits to shareholders as the most important issue in our management policy. However, considering expected net loss in our non-consolidated operating results, we are sorry to inform shareholders that we now plan non payment of year-end dividends, for which we will make a full effort to enable an early resumption of dividends, and we sincerely hope to have the understanding of shareholders and interested parties of the Company.

2) Revision to year-end dividend per share forecast
 (April 1, 2005 to March 31, 2006)
Interim
Year-End
Full Year
Forecast as of November 16, 2005
0.00yen 
10.00 yen 
10.00 yen 
Revised forecast
0.00yen 
0.00 yen 
0.00 yen 
Previous year
0.00yen 
10.00 yen 
10.00 yen 
(Note) These forecasts are based on information available as of April 21, 2006. Actual results may be different from forecasts due to various unexpected factors in the future.
 

For more information, please contact:
Kozo Inoue, Managing Director
E-mail: k-inoue@sanix.co.jp