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November 9, 2006
Revision of Operational Results Forecast
Fukuoka, November 9, 2006 - SANIX Inc. (Ticker: 4651, TSE/OSE/FSE, President & CEO: Shin-ichi Munemasa) announced downward revisions of its earnings forecasts for the first half-year and full-year, previously announced on August 9, 2006.
1. Revision to First Half Results Forecast
(1) Consolidated results forecast (April 1, 2006 to September 30, 2006)
iMillions of Yenj
|
Net Sales
|
Recurring Profit
|
Net Income
|
Previous Forecast
(as of August 9, 2006)
|
16,426
|
(472)
|
(428)
|
|
Revised Forecast
|
15,532
|
(1,519)
|
(1,579)
|
|
Difference
|
(894)
|
(1,047)
|
(1,151)
|
|
% Change
|
(5.4%)
|
-
|
-
|
|
Results from year before
|
20,548
|
(840)
|
(1,292)
|
(2) Non-consolidated results forecast (April 1, 2006 to September 30, 2006)
iMillions of Yenj
|
Net Sales
|
Recurring Profit
|
Net Income
|
Previous Forecast
(as of August 9, 2006)
|
15,550
|
(490)
|
(430)
|
|
Revised Forecast
|
14,706
|
(1,526)
|
(1,537)
|
|
Difference
|
(844)
|
(1,036)
|
(1,107)
|
|
% Change
|
(5.4%)
|
-
|
-
|
|
Results from year before
|
19,774
|
(908)
|
(1,330)
|
2. Revision to Full-year Results Forecast
(1) Consolidated results forecast (April 1, 2006 to March 31, 2007)
iMillions of Yenj
|
Net Sales
|
Recurring Profit
|
Net Income
|
Previous Forecast
(as of August 9, 2006)
|
32,921
|
1,899
|
1,863
|
|
Revised Forecast
|
30,877
|
(799)
|
(929)
|
|
Difference
|
(2,044)
|
(2,698)
|
(2,792)
|
|
% Change
|
(6.2%)
|
-
|
-
|
|
Results from year before
|
36,509
|
(3,479)
|
(4,252)
|
(2) Non-consolidated results forecast (April 1, 2006 to March 31, 2007)
iMillions of Yenj
|
Net Sales
|
Recurring Profit
|
Net Income
|
Previous Forecast
(as of August 9, 2006)
|
30,960
|
1,800
|
1,800
|
|
Revised Forecast
|
28,920
|
(830)
|
(900)
|
|
Difference
|
(2,040)
|
(2,630)
|
(2,700)
|
|
% Change
|
(6.6%)
|
-
|
-
|
|
Results from year before
|
35,031
|
(3,580)
|
(4,354)
|
3. Reasons for the Downward Revision
On July 7, 2006, the Ministry of Economy, Trade and Industry issued to SANIX, according to the provisions in Article 8, Paragraph 1 of Specific Commercial Transactions Law (hereinafter the "Law"), an order to suspend six sales offices of the HS Division from conducting certain home-call sales activities as defined in Article 2, Paragraph 1 of the Law, from July 8, 2006 to October 7, 2006; and directions in accordance with Article 7 of the Law. Since then, we have sought to prevent recurrence and improve compliance, while working to restore our operating results.
Under these circumstances, Affected by the administrative measures more strongly than anticipated, the Divisionfs sales for the first half of the current year are expected to be lower than the earlier projection. Regarding sales for the second half of the current year and thereafter, the extent of recovery of the Divisionfs business results has been reviewed from a more conservative stance, using as a basis of estimation the sales amount in October 2006, when business was resumed by shops whose operation had been suspended until then. Consequently, the consolidated sales forecasts for the first half-year and the full-year announced last time have been modified.
As mentioned in gAnnouncement on gBusiness Streamlining Planh and Revision of Operational Results Forecastg, which was released on August 9, 2006, profits will be secured by reducing fixed expenses through such steps as shop elimination and consolidation, wage cuts, personnel downsizing and drastic cost reduction. However, due to decreased earnings in the HS Division, operating profits for the first half of the current year and current net profit are expected to dip from previously forecast figures. Operating profits and net profit for the second half of the current year are also expected to dip from previously projected figures, as a result of the sales forecast revision. Operating expenses for the second half of the current year has been reviewed from a more conservative stance, using as a basis of expenses amount in September and October 2006.
Based on these facts and assumptions, the consolidated recurring profit and net income forecasts for the first half-year and the full-year announced last time have been modified.
Semi-annual and annual forecasts of non-consolidated operating results have also been modified accordingly, for the same reasons.
(Note) These forecasts are based on information available as of November 9, 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 |