February 14, 2007


Revision of Operational Results Forecast

Fukuoka, February 14, 2007 - SANIX Inc. (Ticker: 4651, TSE/OSE/FSE, President & CEO: Shin-ichi Munemasa) announced downward revisions of its earnings forecasts for the full-year, previously announced on November 15, 2006.


1. Revision to Full-year Results Forecast
(1) Consolidated results forecast (April 1, 2006 to March 31, 2007)

iMillions of Yenj
Net Sales
Recurring Profit
Net Income
Previous Forecast
(as of November 15, 2006)
30,877 
(799) 
(929) 
Revised Forecast
29,250 
(1,794) 
(2,014) 
Difference
(1,627) 
(994) 
(1,084) 
% Change
(5.3%) 
Results from year before
36,509 
(3,479) 
(4,252) 

(2) Non-consolidated results forecast (April 1, 2006 to March 31, 2007)

iMillions of Yenj
Net Sales
Recurring Profit
Net Income
Previous Forecast
(as of November 15, 2006)
28,920 
(830) 
(900) 
Revised Forecast
27,640 
(1,800) 
(1,960) 
Difference
(1,280) 
(970) 
(1,060) 
% Change
(4.4%) 
Results from year before
35,031 
(3,580) 
(4,354) 


2. Reasons for the Downward Revision

Since the administrative punishments in July 2006, the HS Division has established internal rules to restrict sales activities to senior customers, conducted a compliance education meeting in each district in which all employees of the HS Division participated, and implemented other measures to ensure strict compliance and to prevent recurrence of similar misconducts. However, the impact of the administrative punishments still lingered during the third quarter. Thus, sales by the HS Division remained weak, and was lower than the planned level. As for the prospect for the fourth quarter, it is expected that sales recovery will continue. However, considering the conditions to date, we judged that the consolidated sales forecast for the full year announced last time needed modifications.

As for the operating profit, we implemented sales offices closing and consolidation, personnel reduction and radical cost reduction measures, as scheduled in the Announcement of Business Streamlining Plan released on August 9, 2006. As a result, fixed costs significantly decreased in the third quarter of the year. However, the decrease in sales during the nine months was greater than we expected, and the recovery in the fourth quarter is expected to be modest. Considering these facts and forecasts, we expect that the recurring profit and net income for the full year will not reach the level forecasted in the last announcement. Accordingly, the consolidated net income forecast for the full year announced last time is modified.

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 February 14, 2007. Actual results may be different from forecasts due to various unexpected factors in the future.

For more information, please contact:
Kozo Inoue, Managing Director