SUMMARY OF CONSOLIDATED FINANCIAL STATEMENTS
Third Quarter of FY 2008 (from July 1, 2007 to March 31, 2008)
May 13, 2008
The English Edition is digested translation of Japanese financial statements, which are prepared in accordance with generally accepted accounting principles in Japan.

Company Name: Precision System Science Co., Ltd.
Listed on: Hercules Market at Osaka Securities Exchange; Code Number: 7707
1. Consolidated financial data for nine months ended March 31, 2008
(From July 1, 2007 to March 31, 2008)
(1) Consolidated
operating
results

(Million yen, fractional amounts rounded down to the nearest million yen)

Sales
Operating income
Ordinary income

Million yen %
Million yen %

Million yen %
Nine months ended March 31, 2008
2,335 (13.0)
(192) -
(299) -
Nine months ended March 31, 2007
2,684 5.7
(125) - (129)
-
Full year of FY 2007
3,698 1.7
(57)
(65)
Net income
Net income per
share
Net income per share
adjusted for full dilution

Million yen %
Yen Yen
Nine months ended March 31, 2008
(427) -
(9,986.43)
-
Nine months ended March 31, 2007
(181) -
(4,248.13)
-
Full year of FY 2007
(143) (3,357.11)

(2) Consolidated financial condition

Total assets
Net Assets
Equity ratio
Net Assets per share
of common stock

Million yen
Million yen
%
Yen
As of March 31, 2008
4,278
2,369
55.4 55,308.87
As of March 31, 2007
4,948
2,781
56.2 64,932.30
As of June 30, 2007
5,169
2,854
55.2 66,629.42

(3) Consolidated cash flows

Net cash flows
from operating
activities
Net cash flows from
investing activities
Net cash flows from
financing activities
Cash and cash
equivalents at the
end of FY

Million yen
Million yen
Million yen

Million yen
Nine months ended March 31, 2008
55
(84)
(367) 1,066
Nine months ended March 31, 2007
-

-

-

-
Full year of FY 2007
(51)
(123)
420
1,478

2. Forecasts for the fiscal year 2008 ending June 30, 2008
(From July 1, 2007 to June 30, 2008)

Sales
Operating income
Ordinary income
Net income
Net income
per share

Million yen %
Million yen %
Million yen %
Million yen %
For fiscal year ending
June 30, 2008
3,400 (8.1)
(180) -

(270) -
(420) -
(9,803.92)
* The above forecast contains forward-looking statements based on information currently available.
Consequently the Company’s actual results may differ materially from the projected values due to various
future factors.

Operating results and financial conditions
I. Analysis of operating results 1. Operating results
During the period, there was change in accounting method on sales recognition for an oversea
OEM client from FOB to DDU standard. The change negatively affected the net sales by 112 million yen compared to the amount if it were recognized in the previous accounting method.
As the timing of upgrading for major instruments has been approaching, on the other hand,
shipment of DNA extractors to OEM clients was slower than expected. Due to the those factors, which are unusual and limited to this fiscal year, net sales for the 9 months declined to 2,335 million yen (down 13.0% compared to the same period in previous year). Affected by sales decline, the gross profit decreased to 985 million yen (down 9.9% yoy) Selling, general, and administrative expenses slightly reduced to 1,177 million yen (3.5% down compared to the same period of previous fiscal year). As a result, operating loss was recorded as 192 million yen and ordinary loss was recorded as 299 million yen, while net loss became 427 million yen. Sales classification by customers:
For nine months ended
March 31, 2007
For nine months ended
March 31, 2008
Year-on-year changes
Amount
Percentage
Amount Percentage
Million
yen
% Million yen
%
%
ROCHE Group
1,207
45.0
963
41.3
(20.2)
QIAGEN Group
706
26.3
528
22.6
(25.1)
Mitsubishi Kagaku Medience, Inc.
200 7.5
378
16.2
88.2
Others 570
21.2
464
19.9
(18.5)
Total 2,684
100.0
2,335
100.0
(13.0)
The sales to Roche Group and Qiagen Group declined due to the above mentioned reasons, while the sales to Mitsubishi Kagaku Medience, Inc. expanded. The sales to other customers were negatively affected by sales decline of specially ordered systems to clinical
testing institutes.

Information by business segments is as follows: 1. Bio-related Business In bio-related business, the net sales decreased 12.9% to 2,316 million yen, while operating loss expanded to 81 million yen. The sales of bio-related business by each product category: For
nine
months
ended
March 31, 2007
For nine months
ended
March 31, 2008
Year-on-yea
r changes
Amount

Amount
Million yen
% Million yen
%
%
DNA auto extractors
1,297
48.8
977
42.2
(24.6)
Other laboratory equipment
279
10.5
98
4.3
(64.8)
Other products
292
11.0
355
15.3
21.6
Merchandise (plastic consumables)
790
29.7
884
38.2
11.9
Total 2,659
100.0
2,316
100.0
(12.9)
1) DNA auto-extractors This category consists of automated systems utilizing the Company’s internationally patented Magtration
Ⓡ
Technology. In addition to DNA auto-extractors, this category includes
immunochemical luminescent measuring system. With progress being made in the bioresearch field and the ensuing need for speedy processing of multiple specimens, we believe that this category has strong potential for future market growth. During the nine months ended March 31, 2008, due to the weak sales to Roche Group and Qiagen Group, the overall sales of this category resulted in 542 units or 977million yen (24.6% down year on year). The quarterly sales units and amount of DNA auto-extractors are shown in below chart
(Thousand yen)

Fiscal year ended June 30, 2006

Third quarter Fourth quarter
Units sold
275
258
Amount 558,781
531,153
Unit price
2,031
2,058

Fiscal year ended June 30, 2007

First quarter Second quarter Third quarter
Fourth quarter
Units sold
190
231
191
258
Amount 389,197
486,681
421,369
507,934
Unit price
2,048
2,106
2,206
1,968

Fiscal year ended June 30, 2008

First quarter
Second quarter Third quarter
Units sold
113
220
209
Amount 210,315
383,145
384,498
Unit price
1,861
1,741
1,839
2) Other laboratory equipment This category consists of automated instruments used in institutions such as research facilities, as well as developmental projects commissioned by governmental ministries, agencies and affiliated organizations. During the FY 2008 third quarter, the sales of this category decreased 64.8% year on year to 98 million yen. The sales in this category tend to be significantly impacted by the number of orders received for specially ordered systems. 3) Other products This category includes sales generated from spare parts (replacement) and maintenance of equipment, pre-packaged reagents for the extraction and purification of nucleic acid used in the Company’s DNA auto-extractors, and software development. During the FY 2008 third quarter, sales in this category amounted to 355 million yen (21.6% increase compared to the previous year). Since sales derived from spare parts and equipment maintenance tends to increase in direct proportion to the cumulative number of systems sold, steady growth in the sales of this category is expected. 4) Merchandise (plastic consumables) This category consists of disposable plastic parts such as tips and cartridges consumed in the use of systems. Consumables designed exclusively for use in the PSS manufactured DNA auto-extractors comprise the major part of this category. During the FY 2008 third quarter, sales in this category expanded to 884 million yen (11.9% increase compared to the previous year). Since the sales derived from plastic consumables tend to increase in direct proportion to the cumulative number of systems sold, steady growth in the sales of this category is expected in the future. 2. Investment Business In investment business, the net sales were 18 million yen and operating income was 8 million yen, respectively as management fee revenue was recorded in PSS Capital Co., Ltd., which co-manages Bio-contents fund LLP. Below are the investment achievements by Bio-contents fund LLP. Companies invested
When invested
Amount (thousand yen)
May, 2007
60,000
Genetain
September, 2007
60,000
Haplo Phama
August, 2007
30,030
PaGE Science
January, 2008
22,100
Total 172,130