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Meitec publishes financial report

During the nine months from April 1, 2013 to December 31, 2013, although a moderate recovery of the Japanese economy was seen, the future of the world economy remained uncertain due to the slowdown in economic growth in emerging markets.

Under such circumstances, many leading manufacturers, which are the major customers of the company, continued steady investments in technological development looking to the next generation despite the business conditions.

Thanks to a strong order environment, its utilization ratio during the third quarter, from October to December, steadily increased. As a result, consolidated net sales for the period under review increased &yen2,731 million, or 5.2%, from a year earlier to &yen55,071 million. Consolidated cost of sales rose &yen2,486 million, or 6.5%, from a year earlier to &yen40,472 million. Consolidated selling, general and administrative expenses rose &yen162 million, or 1.8%, from a year earlier to &yen9,333 million. Consolidated operating income increased &yen82 million, or 1.6%, from a year earlier to &yen5,265 million. Consolidated ordinary income increased &yen47 million, or 0.9%, to &yen5,293 million and consolidated net income advanced &yen52 million, or 1.7%, to &yen3,195 million.

Operating Results of Business Domains

Temporary Staffing Business

Net sales in the Temporary Staffing Business segment for the period under review increased &yen2,605 million, or 5.2%, from a year earlier to &yen52,747 million. The major reason for this increase was an increase in the number of engineers assigned to customers via reinforcing sales activities in the Temporary Staffing Business, which accounts for more than 90% of consolidated net sales, particularly in temporary engineer staffing, the core business of this segment. Operating income increased &yen49 million, or 1.0%, from a year earlier to &yen5,064 million.

The Company’s non-consolidated average utilization ratio (overall) was 93.9%, a slight decline from 95.1% a year earlier. A major reason for this decline was the hiring of 379 newly graduated engineers in April of this year, an increase of 159 over the previous year. The assignment of those newly graduated engineers was completed in the first half, roughly as planned. Also, working hours were steady at 8.90 hours/day (8.86 hours/day for the same period of the previous fiscal year).

Engineering Solutions Business

In the Engineering Solutions Business, the Company provides engineering services related to analytical technologies, prototype production, casting/metal mold production and technology support for printed-circuit boards.

Net sales in the Engineering Solutions Business for the period under review fell &yen43 million, or 2.3%, from a year earlier to &yen1,871 million, and operating income declined &yen36 million, or 50.3%, to &yen36 million. Sales increased at Meitec CAE from a year earlier, but profits decreased due to a deterioration in cost of sales ratio. The Apollo Giken Group posted an operating loss due to a decrease in orders received.

Global Business

The Global Business engages in job placement and vocational training for students to supply human resources for Japanese manufacturers that operate in the coastal areas of China. Net sales in the Global Business for the period under review increased &yen8 million, or 15.1%, from a year earlier to &yen65 million, and an operating loss of &yen70 million was posted compared with a loss of &yen36 million a year earlier. In light of such circumstances, Meitec plan to withdraw its vocational training business (Xian, Chengdu) as part of a review of the Group’s business strategy. The job placement business (Shanghai) will be continued. It plans to release details in its financial report for the fiscal year ending March 31, 2014.

Recruiting & Placement Business

The Recruiting & Placement Business involves the job placement and an information portal site business intended for engineers. Net sales in the Recruiting & Placement Business advanced &yen149 million, or 28.0%, from a year earlier to &yen681 million, and operating income increased &yen93 million, or 72.9%, to &yen221 million. Meitec Next achieved sales and profit growth due to an increasing number of job placements.

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