Income Analysis
Despite signs of a recovery in personal consumption,
conditions in the Japanese economy generally
remained rigorous in fiscal 1994, owing to a continued
slump in private-sector capital investment and the
further rise of the yen.
 Amid these conditions, net sales rose 6.9% from the
previous year, to ¥1335.6 billion, as growth in the
Electronics and Information Division and in U.S.-based
operations, as well as an increase in the number of
consolidated subsidiaries, offset a decline in the Iron
and Steel Sector precipitated by the Great Hanshin
Earthquake of January 1995. In addition, operating
income soared 75.4%, to ¥91.6 billion, lifting the
operating margin to 6.9%, from 4.2% in fiscal 1993.
 Sales in the Iron and Steel Sector, declined 6.4%, to
 ¥526.3 billion. During the term, the ongoing weakness
of construction-related demand had begun to be
countered by signs of a recovery in sales to the
automotive, electrical machinery, shipbuilding and
other manufacturing sectors, but the earthquake and a
rising yen disrupted this nascent upturn. Despite the
decline in sales, cost-cutting efforts helped boost
operating income 30.0%, to ¥32.7 billion.
 In the Aluminum and Copper Sector, sales increased
16.7%, to ¥279.8 billion, while operating income, at
¥13.7 billion, was double that of the previous term.
The sector's impressive performance was attributable
to a general upturn in demand for aluminum and
copper sheets in line with the economy's increasing
momentum, as well as a rise in demand for aluminum
prompted by 1994's record-hot summer.
 Sales in the Machinery Sector were up 11.2%, to
¥453.2 billion, with operating income also rising
substantially to reach ¥25.3 billion. These upturns were
underpinned by steady plant-related sales and a
moderate rise in sales of construction machinery,
which together offset delays in shipments and
construction necessitated by the earthquake.
 In the Electronics and Information Sector, sales
soared 97.5%, to ¥80.8 billion, owing to favorable
sales of semiconductor-related products amid robust
demand for personal computers in the United States.
 Sales from other business activities declined 12.0%,
to ¥82.6 billion, reflecting downturns in such areas as
leasing. Operating income was up 9.6%, to ¥6.8 billion.
 Excluding expenses incurred as a result of the
earthquake, net other expenses totaled ¥114.0 billion.
Together with the period's ¥66.6 billion in earthquake-
related expenses, this precipitated a loss before income
taxes of ¥89.0 billion, while adjustments for income
taxes, minority interests and investment loss based on
the equity method of calculation brought the net loss to
¥92.4 billion.

Analysis of Cash Flow and Financial Position
Operating, investing and financing activities
undertaken during fiscal 1994 led to a 6.2% net decline
in cash and cash equivalents during the period, to
¥103.9 billion.
 Net cash provided by operating activities totaled
¥77.3 billion, up from ¥20.3 billion in fiscal 1993.
 During the period, the Company allocated ¥84.1
billion toward the purchase of plant and equipment
and ¥49.0 billion toward the purchase of marketable
securities, investment and other assets. Meanwhile,
the sale of marketable securities, investments and other
assets generated ¥110.0 billion. Overall, net cash used 
in investing activities amounted to ¥13.1 billion.
 Net cash used in financing activities totaled ¥71.0
billion, compared with ¥85.5 billion in net cash
provided by financing activities in fiscal 1993. In
particular, the company took on an additional ¥17.0
billion in short-term debt and raised ¥119.3 billion
through the issuance of long-term debt and corporate
bonds. Meanwhile, ¥207.3 billion in outstanding debt
was repaid during the term.
 At March 31,1995, total assets stood at ¥2,390.3
billion, a figure essentially unchanged from a year
earlier. Total stockholders' equity was ¥264.8 billion,
down 28.7% from the previous year, bringing the net
worth ratio to 11.1%.