(Translation)

Financial Information [Japanese GAAP] (Consolidated)
Third Quarter of the Fiscal Year Ending March 31, 2011

January 31, 2011

Listed company name: Noritsu Koki Co., Ltd.
Stock exchange listings: Tokyo and Osaka
Code number: 7744 URL: http://www.noritsu.co.jp
Representative: (Position) Representative Director, President
(Name) Hirotsugu Nishimoto
Responsible contact person: (Position) General Manager, Management Administration Unit
(Name) Hironori Taniguchi
Telephone: +81-73-454-0307
Scheduled filing date of quarterly securities report: February 10, 2011
Scheduled dividend payment commencement date: -
Preparation of supplemental explanatory materials for the quarterly closing: No
Holding of explanatory meeting for the quarterly closing: No

(Amounts were rounded downward to the nearest million yen.)

1. Qualitative Information on Consolidated Financial Results, etc. for the Current Quarter

(1) Qualitative Information Regarding Consolidated Operating Results
The economic environment surrounding the Noritsu Group during the nine months ended December 31, 2010, continued to go through an uncertain phase due to stagnant exports and the effect of continued yen appreciation, despite indications of partial recovery driven by various stimulus policies.
In our related markets, photo-printing demand has declined significantly due to a diversifying current photography needs and the effect of consumer trends. As a result, the business environment surrounding our Company in both developed and emerging countries continued to be severe due to the decreasing profitability of minilab stores and faltering investment attitudes.
Under these circumstances, the Group positioned the current year as a rebirth of its business with the new brand statement "Face the NEXT," and aggressively took on corporate-wide zero-based structural reforms to recover the profitability of our imaging business, the Company’s core business since its foundation.
At the same time, we view our new growth areas to be our new businesses related to medical care, environment and food. We proactively endeavored to establish a new business portfolio utilizing M&A and taking advantage of our manufacturing creativity, sales, service, and IT capabilities.
As a result, net sales for the nine months ended December 31, 2010, were ¥22,611 million, up 2.0% from the same prior year period, despite the drastic yen appreciation. This was mainly attributable to an increase in sales to major North American customers and the effect of the new inclusion of Doctor-NET Inc. in the scope of consolidation. The net sales consisted of domestic sales of ¥4,334 million (down 3.8% from the same prior year period), and overseas sales of ¥18,276 million (up 3.4% from the same prior year period). The ratio of overseas sales to total consolidated sales was 80.8%, up 1.1 points from the same prior year period.
As for profitability, primarily due to the increased ratio of high cost product sales to major North American customers, the cost-to-sales ratio increased from 45.8% to 50.8%, up 5 points from the same prior year period, and gross profit was ¥11,128 million (down 7.4% from the same prior year period).
Selling, general and administrative expenses were ¥11,060 million, down 31.2% or ¥5,016 million from the same prior year period, as we once again reviewed cost structures on a Group-wide basis and were successful in our exhaustive efforts to reduce costs. As a result, operating income was ¥68 million (operating loss of ¥4,054 million for the same prior year period), an improvement of ¥4,122 million compared with the same prior year period.
As for non-operating income and expenses, accelerated yen appreciation due to the uncertain outlook for the U.S. economy and financial instability in Europe, caused the foreign exchange loss to increase by ¥913 million compared with the same prior year period. There was also a ¥529 million investment loss based on the equity method of accounting. The ordinary loss for the period was ¥962 million (ordinary loss of ¥3,463 million for the same prior year period). The net loss for the period was ¥1,886 million (net loss of ¥3,716 million for the same prior year period) after adjusting income taxes, etc. and recording structural reform expenses of ¥519 million as special losses.

Operating results by segment are as follows:
(i) Japan
Although sales of Doctor-NET Inc., a remote medical support business, were included in the sales of new businesses, our imaging business suffered from restrained capital investments and lower sales levels. Total sales for the period were ¥13,102 million (down 14.2% from the same prior year period).
Operating expenses were reduced significantly to ¥12,533 million (down 34.6% from the same prior year period) with emerging effects of improvements from structural reforms implemented in the prior year. As a result, operating income improved significantly to ¥568 million (operating loss of ¥3,904 million for the same prior year period).
(ii) North America
North America is the most important region, representing approximately 40% of consolidated sales. We aggressively developed business models concentrating on major customers and have strengthened our market-oriented sales strategies.
Despite the continuing trend of yen appreciation against the U.S. dollar of 5.6%, total sales for the period were ¥9,144 million (up 32.5% from the same prior year period) due to expanded product sales to major customers of our subsidiaries in North America. Operating expenses were ¥9,090 million (up 35.1% from the same prior year period), in line with the sales increase.
Operating income was ¥54 million (down 68.5% from the same prior year period), mainly due to an increased proportion of sales of higher cost products to the major customers.
(iii) Central and South America
Sales in Brazil, our major market, remained strong, contributing to overall sales in Central and South America. Total sales for the period were ¥1,630 million (up 6.6% from the same prior year period).
Operating expenses were ¥1,637 million, approximately the level of the same prior year period. The operating loss was ¥6 million (operating loss of ¥107 million for the same prior year period).
(iv) Europe
Total sales for the period were ¥2,589 million (down 22.1% from the same prior year period).
Operating expenses were ¥3,081 million (down 22.6% from the same prior year period), supported by the cost-cutting effects of the structural reforms. The operating loss was ¥491 million (operating loss of ¥653 million for the same prior year period).
In line with our structural reforms, the Company resolved at the Board of Directors’ meeting held on November 16, 2010 to liquidate NORITSU (DEUTSCHLAND) GMBH. This will result in a shift in Europe from a subsidiary-based sales system to a sales system utilizing distributors with strong foundations in local countries. After-sales service operations will also be localized and transferred to Veritek Global Limited, a service company in which we have capital involvement.
(v) Asia and Oceania
Australia enjoyed brisk sales in the Oceania region. Total sales for the period were ¥3,351 million (up 23.5% from the same prior year period).
Operating expenses were ¥3,147 million (up 10.5% from the same prior year period) mainly due to the increased sales, and the operating income improved to ¥204 million (operating loss of ¥135 million for the same prior year period), in line with the sales increase.

(2) Qualitative Information Regarding Consolidated Financial Position
(Status of Assets, Liabilities and Equity)
(Assets)
Total assets as of the end of the consolidated third quarter ended December 31, 2010, were ¥72,076 million, down ¥9,433 million compared with the prior consolidated fiscal year end.
Total current assets decreased by ¥10,790 million. This was mainly due to decreases of ¥9,796 million in cash and bank deposits, and ¥2,651 million in inventories, and an increase of ¥2,018 million in marketable securities.
Total noncurrent assets increased by ¥1,357 million. This was mainly due to an increase of ¥2,597 million in intangible assets due to goodwill recorded in connection with an acquisition of the shares of a subsidiary, and decreases of ¥772 million in property, plant and equipment due to depreciation, etc. and ¥540 million in investment securities transferred to marketable securities, etc.

(Liabilities)
Total liabilities decreased by ¥5,925 million. This was mainly due to decreases of ¥3,066 million in accrued liabilities included in Current Liabilities-Other due to the payment of special additional retirement benefits related to a voluntary retirement program, ¥2,675 million in notes payable and accounts payable-trade and ¥388 million in liability for employee retirement benefits and an increase of ¥1,501 million in long-term loans payable.

(Equity)
Total equity decreased by ¥3,508 million. This was due to decreases of ¥1,886 million in retained earnings due to the net loss for the period and ¥1,583 million in valuation and translation adjustments.

(Status of Cash flows)
The balance of cash and cash equivalents (“cash”) at the end of the consolidated third quarter ended December 31, 2010, was ¥20,482 million, a decrease of ¥9,763 million compared with the end of the consolidated prior fiscal year.
A summary of cash flows by category for the nine months ended December 31, 2010, is as follows.
(Cash flows from operating activities)
Cash flows from operating activities resulted in net cash used of ¥4,016 million. Primary cash decrease factors were a ¥2,800 million decrease in trade payables, a ¥2,479 million decrease in accrued liabilities related to the voluntary retirement program, etc., and the loss before income taxes and minority interests of ¥1,413 million for the period. Primary cash increase factors were a ¥2,610 million decrease in inventories and foreign exchange losses of ¥1,106 million.
(Cash flows from investing activities)
Cash flows from investing activities resulted in net cash used of ¥5,783 million. Primary cash decrease factors were a ¥3,215 million payment for the acquisition of shares of a subsidiary related to a change in the consolidation scope, payments of ¥3,118 million for the acquisition of investment securities, and payments of ¥768 million for time deposits. The primary cash increase factor was a net increase of ¥1,508 million due to redemptions of marketable securities.
(Cash flows from financing activities)
Cash flows from financing activities resulted in net cash provided of ¥1,621 million, mainly due to proceeds from long-term loans payable, etc.

(3) Qualitative Information Regarding Consolidated Financial Forecasts
As part of our structural reforms, the Group held an extraordinary meeting of the shareholders on January 19, 2011, and approved a plan to split the Company and establish a new company to further develop the consolidated management structure of the Group.
Based on the above, the Company was transitioned to a holding company as of February 1, 2011, and transferred a part of its rights and obligations held for all of its businesses to a new company, NK Works Co., Ltd., a wholly-owned new subsidiary of the Company established via a company split (incorporation-type company split). We will create a big shift in the approach and mindset of the former management structure, clearly set Group targets, establish a divisional system aimed at realizing such targets that clarifies the responsibilities and authorities of each business subsidiary, and aggressively pursue group management as never before.
The consolidated and separate financial forecasts for the year ending March 31, 2011, resulting from the above changes will be disclosed as soon as they are established.

2. Other Information

(1) Summary of Changes in Significant Subsidiaries
No applicable items.

(2) Summary of Simplified Accounting Methods and Specific Accounting Methods
(i) Simplified accounting method
 Valuation method for inventories
The physical inventory for the third quarter ended December 31, 2010, was not performed. The inventories balance as of the end of the third quarter ended December 31, 2010, was calculated using a rational method based on the physical inventory balance at the end of the second quarter ended September 30, 2010.
(ii) Specific accounting method
 Calculation of income tax expenses:
Income tax expenses were calculated using rational estimates of effective tax rates after applying tax effect accounting to income before income taxes and minority interests for the consolidated fiscal year ending March 31, 2011, which includes the nine months ended December 31, 2010, multiplied by income before income taxes and minority interests for the quarterly period.

(3) Summary of Changes in Accounting Principles and Procedures, and Presentation Methods, etc.
 Adoption of “Accounting Standard for Equity Method of Accounting for Investments” and “Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method”
Beginning with the consolidated first quarter ended June 30, 2010, the Company adopted “Accounting Standard for Equity Method of Accounting for Investments” (The Accounting Standards Board of Japan (ASBJ) Statement No. 16 released on March 10, 2008) and “Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method” (PITF No. 24, March 10, 2008). These adoptions had no effect on the ordinary loss and the quarterly loss before income taxes and minority interests.
 Adoption of “Accounting Standard for Asset Retirement Obligations”
Beginning with the consolidated first quarter ended June 30, 2010, the Company adopted “Accounting Standard for Asset Retirement Obligations” (ASBJ Statement No. 18, March 31, 2008) and “Guidance on Accounting Standard for Asset Retirement Obligations” (ASBJ Guidance No. 21, March 31, 2008). These adoptions had no effect on operating income, the ordinary loss and the quarterly loss before income taxes and minority interests.
 Adoption of “Accounting Standard for Business Combinations,” etc.
Beginning with the consolidated first quarter ended June 30, 2010, the Company adopted “Accounting Standard for Business Combinations” (ASBJ Statement No. 21, December 26, 2008), “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008), “Partial amendments to Accounting Standard for Research and Development Costs” (ASBJ Statement No. 23, December 26, 2008), “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, December 26, 2008), “Accounting Standard for Equity Method of Accounting for Investments (ASBJ Statement No. 16 released on December 26, 2008) and “Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, December 26, 2008). These adoptions had no effect on the operating income, the ordinary loss and the quarterly loss before income taxes and minority interests.

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