REG-Best Denki Co Ltd Notice Concerning Amendments to the Forecast for the Year ending February 28, 2010 and Recording of Extraordinary Loss

LONDON--(Business Wire)--
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[Translation]

July 13, 2009

Best Denki Co., Ltd.

Code No. of TSE: 8175
Listed on: First Section of Tokyo Stock Exchange and
Fukuoka Stock Exchange
Head office: Fukuoka
URL http://www.bestdenki.ne.jp
Representative: Takashi Hamada, President and Representative Director
Contact: Yoshiaki Mori,
General Manager of General Affairs Department and
Executive Officer
Tel: 092-643-6828

Notice Concerning Amendments to the Forecast

for the Year ending February 28, 2010 and

Recording of Extraordinary Loss

In light of recent trends in the Company`s results and other matters, the
Company hereby gives notice of the following amendments to the forecast
published on April 14, 2009 for the consolidated and non-consolidated results
for the year ended February 28, 2010 and notice of the extraordinary loss it has
recorded.

1.Amendments to the Forecast for Periods during the Year Ended February 28, 2010

Period to the end of the Second Quarter (March 1, 2009 through August 31, 2009)

Net Sales Operating Recurring Net Income Net Income Per Share
Income Income
(Millions of Yen) (Yen)
Forecast previously announced (A) 171,000 1,600 1,500 400 4.44
Amended Forecast (B) 170,000 750 850 10 0.11
(B) - (A) -1,000 -850 -650 -390 -
((B) - (A))/(A) x 100 (%) -0.6 -53.1 -43.3 -97.5 -

Half Year Results for the Period 197,178 536 570 314 3.67
ended August 31, 2008 (for your
reference)

Full Year (March 1, 2009 through February 28, 2010)

Net Sales Operating Recurring Net Income Net Income Per Share
Income Income
(Millions of Yen) (Yen)
Forecast previously announced (A) 335,000 2,100 1,900 150 1.67
Amended Forecast (B) 335,000 1,900 1,600 150 1.67
(B) - (A) - -200 -300 - -
((B) - (A))/(A) x 100 (%) - -9.5 -15.8 - -

Full Year Results for the Year ended 371,900 -894 -937 -3,010 -34.29
February 28, 2009 (for your
reference)

Period to the end of the Second Quarter (March 1, 2009 through August 31, 2009)

Net Sales Operating Recurring Net Income Net Income Per Share
Income Income
(Millions of Yen) (Yen)
Forecast previously announced (A) 155,000 900 960 150 1.67
Amended Forecast (B) 154,000 500 700 200 2.22
(B) - (A) -1,000 -400 -260 50 -
((B) - (A))/(A) x 100 (%) -0.6 -44.4 -27.1 33.3 -

Half Year Results for the Period 171,003 138 420 228 2.67
ended August 31, 2008 (for your
reference)

Full Year (March 1, 2009 through February 28, 2010)

Net Sales Operating Recurring Net Income Net Income Per Share
Income Income
(Millions of Yen) (Yen)
Forecast previously announced (A) 308,000 1,600 1,600 100 1.11
Amended Forecast (B) 307,000 1,400 1,600 500 5.55
(B) - (A) -1,000 -200 - 400 -
((B) - (A))/(A) x 100 (%) -0.3 -12.5 - 400.0 -

Full Year Results for the Year ended 322,251 24 568 -4,016 -45.75
February 28, 2009 (for your
reference)

2. Reasons for the Amendments to Forecast for the Results

The global financial crisis originating in the U.S. and the resulting economic
downturn have led to difficult market conditions mainly attributable to a worse
than anticipated reluctance in consumers to buy products and unit price decline
due to even greater competition. The Company and its subsidiaries and affiliates
as a group has worked to strengthen sales operations, particularly through
increasing sales of "eco-point" products and making use of promotional
strategies for increasing sales, such as issuing higher rates of loyalty points.
At the same time, the Company`s group has worked to cut costs, review the
performance of unprofitable stores and reduce inventory. However, results for
the first quarter fell far short of the previous forecast partly because of our
decision to voluntarily refrain from advertising in the wake of an incident in
which the former manager of the sales promotion department of the Company
allegedly violated the Postal Law.

In terms of net sales, consolidated and non-consolidated results for the second
quarter and for the full year are largely in line with forecasts, due to the
combined effect of having sold eco-point products for some time, and having
recently being designated as a company providing eco-points which are
exchangeable to some gift certificates. However, in terms of profit, we
anticipate a decrease in gross profit margins as a result of significant unit
price decline, which is due to intensified price competition, and our decision
to voluntarily refrain from advertising following the Postal Law violation
incident. Therefore, consolidated results in the second quarter are expected to
fall far short of the previous forecast and we have also revised our forecasts
for the full year (consolidated) as set out above. With respect to
non-consolidated results, despite anticipating a decline in operating income and
recurring income for the second quarter, we expect to see a slight increase in
net income for the period, and we have also revised our forecasts for the full
year (non-consolidated) as set out above.

* The forecasts mentioned above are based on the information available as of the
date of this announcement, and they may differ from the actual results.

3. Extraordinary Loss

For the first quarter of the year ending February 28, 2010, the Company recorded
599 million yen of consolidated impairment loss on inventory assets as a
consolidated extraordinary loss (538 million yen on a non-consolidated basis),
the major reasons for which are set out below.

In the past, inventories held for sale in the ordinary course of business were
basically recorded at cost by moving average method. However, from the first
quarter of the current fiscal year, such inventories (on a consolidated basis)
has been basically recorded at cost by moving average method (in which a
decreased book value based on decreased profitability of assets be recorded for
the value on the balance sheet) in line with the application of the "Accounting
Standard for Measurement of Inventories" (Accounting Standards Board of Japan
Statement No. 9; July 5, 2006).

- End -

Best Denki Co Ltd

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