UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 or 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of April, 2008

Commission file number 0-12602

MAKITA CORPORATION

(Translation of registrant’s name into English)

3-11-8, Sumiyoshi-cho, Anjo City, Aichi Prefecture, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x       Form 40-F  o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(1):  x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101 (b)(7):  o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  o                No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-        

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: April 30, 2008

Makita Corporation

Consolidated Financial Results
for the year ended March 31, 2008,
(U.S. GAAP Financial Information)

 
 

(English translation of “KESSAN TANSHIN”
originally issued in Japanese language)

CONSOLIDATED FINANCIAL RESULTS
FOR THE YEAR ENDED MARCH 31, 2008

April 30, 2008

Makita Corporation
Stock code: 6586
URL: http://www.makita.co.jp/
Masahiko Goto, President
(Consolidated financial information has been prepared in accordance
with accounting principles generally accepted in the United States.)

1. Results of the year ended March 31, 2008 (From April 1, 2007 to March 31, 2008)

(1) CONSOLIDATED OPERATING RESULTS

		Yen (million)
		For the year ended												For the year ended
		March 31, 2007												March 31, 2008
											%												%
Net sales			279,933								22.2				342,577								22.4
Operating income			48,176								5.2				67,031								39.1
Income before income taxes			49,323								0.4				65,771								33.3
Net income			36,971								(8.5	)			46,043								24.5
		Yen
Net income per share:
Basic							257.27												320.30
Diluted							257.27												320.30
Ratio of net income to shareholders’ equity							13.0	%											14.9	%
Ratio of income before income taxes to total assets							14.2	%											17.4	%
Ratio of operating income to net sales							17.2	%											19.6	%

Notes:			1.			Amounts of less than one million yen have been rounded.
			2.			The table above shows the changes in the percentage ratio of Net sales, Operating income, Income before income taxes, and Net income against the previous year.
			3.			Equity in net earnings of affiliated companies (including non-consolidated subsidiaries): NIL

(2) CONSOLIDATED FINANCIAL POSITION

		Yen (million)
		As of				As of
		March 31, 2007				March 31, 2008
Total assets			368,494				386,467
Shareholders’ equity			302,675				316,498
Shareholders’ equity ratio to total assets (%)			82.1	%			81.9	%
		Yen
Shareholders’ equity per share			2,106.28				2,201.36
(3) CONSOLIDATED CASH FLOWS
		Yen (million)
		For the year ended				For the year ended
		March 31, 2007				March 31, 2008
Net cash provided by operating activities			32,360				29,275
Net cash used in investing activities			(27,276	)			(4,508	)
Net cash used in financing activities			(8,307	)			(13,815	)
Cash and cash equivalents, end of year			37,128				46,306

			1
English Translation of “KESSAN TANSHIN” originally issued in Japanese language

2. Cash dividend

		Yen
										For the year
		For the year				For the year				ending March
		ended March 31,				ended March 31,				31, 2009
		2007				2008				(Forecast)
Cash dividend per share:
Interim			19.00				30.00				30.00
Year-end			55.00				67.00			(Note)
Total			74.00				97.00			(Note)
		Yen (million)
Total cash dividend			10,634				13,946				—
Dividend payout ratio (%)			28.8	%			30.3	%			—
Dividend ratio for shareholders’ equity (%)			3.7	%			4.5	%			—

Note: Regarding our forecast for dividends, refer to page 6.

3. Consolidated financial forecast for the year ending March 31, 2009 (From April 1, 2008 to March 31, 2009)

		Yen (million)
		For the six months ending												For the year ending
		September 30, 2008												March 31, 2009
											%												%
Net sales			169,500								(0.0	)			343,000								0.1
Operating income			31,600								(6.8	)			64,000								(4.5	)
Income before income taxes			30,700								(10.9	)			63,000								(4.2	)
Net income			20,500								(13.1	)			42,000								(8.8	)
		Yen
Net income per share							142.59												292.13

4. Other

(1)

Changes in important subsidiaries for the year (Changes in specific subsidiaries accompanied by changes in scope of consolidation): None (Ref.) Changes in scope of consolidation and equity method

Consolidation:		Increase			3			Decrease		0
Equity Method:		Increase			2			Decrease		1

(2)		Changes in principle, procedure and representation of the accounting policies concerning consolidated financial statements preparation (Changes indicated to “CHANGE OF SIGNIFICANT ACCOUNTING POLICIES”): None
(3)		Number of shares outstanding (common stock)

1. Number of shares issued (including treasury stock):	As of March 31, 2008:	144,008,760
	As of March 31, 2007:	144,008,760
2. Number of treasury stock:	As of March 31, 2008:	235,135
	As of March 31, 2007:	307,481
3. Average number of shares outstanding:	As of March 31, 2008:	143,749,824
	As of March 31, 2007:	143,706,789
Note: Regarding number of shares used as the basis for calculation of net income per share, please see page 18 “Information per share.”

			2
English Translation of “KESSAN TANSHIN” originally issued in Japanese language

1. OPERATING RESULTS

1. Operating results

(1) Outline of operations and business results for the year ended March 31, 2008

     When we review the economic conditions that prevailed abroad for the year ended March 31, 2008, we see that in Europe, the high growth was achieved in the Eastern Europe and Russian economies while signs of a slowdown in Western Europe began to become evident with consumer spending remaining weak during the second half of the term.

     In the US, a decline in residential property investments and turmoil in financial markets in the wake of the sub-prime loan problem rapidly increased apprehensions of a slowdown.

     Regarding Asia, business conditions for the most part remained sound in Asian countries, particularly in China where robust growth continues.

     In Japan, the number of new housing starts decreased under the influence of a tightening of the procedures for applying for building permission under the revised Building Standard Law.

     Moreover, steep rise in the price of crude oil, raw materials and sharp appreciation of yen to US dollar have suppressed corporate earnings. And these negative factors have been acting as a brake on the recovery trend in the economy.

     Under these conditions, Makita focused its product development efforts on meeting marketplace needs, creating and expanding further its line up of lithium-ion battery products that have been highly rated by both domestic and overseas markets ever since initial launch in February 2005.

     Makita increased production at the China plant and expanded the Romania plant in order to enhance its ability to supply products to the markets to meet the strong demand. In Central and South America, Makita started building its second factory in Brazil.

     Moreover, Makita has been devoting efforts to increasing management efficiency and cooperating with group companies to take full advantage of the technical expertise of Makita Numazu Corporation(former Fuji Robin Industries Ltd.),which was incorporated as a subsidiary in May 2007 to strengthen the area of gardening tools including engine-powered tools.

     Consolidated sales grew by 22.4% over the previous year to 342,577 million yen, marking its fourth consecutive year of record sales and its seventh consecutive year of sales growth.

     Consolidated operating income increased by 39.1% to 67,031 million yen (19.6% of operating income to net sales), thanks to an improved sales cost ratio caused by an increase in its Chinese production and by an increase in sales due to the weaker yen against euro.

     Despite realized losses on securities and exchange losses reported as other income or expenses, a new record was set for net profit during the current term. Income before income taxes were higher by 33.3% at 65,771 million yen (ratio of income before income taxes to net sales; 19.2%), and net income for the year ended March 31, 2008 rose by 24.5% amounted to 46,043 million yen (ratio of net income to net sales; 13.4%).

     Overseas sales by region were as follows;

     In Japan, although it is in the severe situation where the number of new housing starts has fallen under the influence of the revision of the Building Standard Law, the sales grew by 11.4% from the previous year to 52,193 million yen with contribution of solid sales of lithium-ion battery products, such as Cordless Impact Driver, and the inclusion of sales from the acquired Makita Numazu Corporation.

     Sales in Europe surged by 29.3% to 160,360 million yen, fuelled by solid sales in the UK, Germany and other Western countries, and by a continued expansion of demand in Eastern Europe and Russia.

     In North America, despite falls in the housing investments in the wake of the sub-prime loan problem, sales rose to 56,422 million yen, up 9.6% over the previous year due mainly to solid sales of lithium-ion battery products.

     Sales in Asia rose by 16.2% to 22,629 million yen with contribution of solid sales in Singapore and Indonesia.

     With regard to other regions, construction investment was strong due to continued economic growth with a backdrop of an increase in the price of mineral resources and crude oil.

     Accordingly, the sales in the Middle East and Africa rose by 43.0% to 18,687 million yen, the sales in Central and South America were up by 32.0% to 16,764 million yen and the sales in Oceania were higher by 25.7% at 15,522 million yen.

     Overall, overseas sales accounted for 84.8% of total sales.

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

(2) Outlook for the year ending March 31, 2009

     There is still an uncertain outlook for the business environment in which Makita operates, due not just to concerns about the impact that the down-turn in the US economy may influence the global economy due to the sub-prime loan problem, but also to fluctuation in exchange rates and the price of oil and raw materials.

     In the light of this outlook, Makita aims to improve performance not only by continuing efforts to increase its market share of the power tool market for professionals but also by expanding its share of the air tools and gardening equipment markets. To achieve this, Makita is improving its global sales, service framework and developing high-value-added products.

     In the North American market, Makita entered into a sales agreement in March 2008 with Home Depot U.S.A., Inc. which is the largest home improvement chain in the US.

Makita’s goal is to continue to distribute its products through the home improvement channel which has a significant influence on the sales trend of electric power tools in the North American market and to consistently increase sales and raise awareness of Makita’s brand name.

Accordingly, Makita’s goals will be met by solidifying a business partnership with Home Depot in the North American market through which new and innovative Makita products will be distributed in the home improvement channel.

Makita will continue to strengthen its relationship with important specialty stores such as independent construction supply and hardware stores which provide Makita products and enhanced after-sales service.

     Predicting the following market trends for the next year,

	•		The yen will appreciate from the previous year.
	•		New product competition with rivals will intensify.
	•		Domestic housing investments will continue to be weak and demand will slacken.
	•		The Western European market, which has been performing strongly, will show signs of slowing.
	•		The US economy entered into a phase of decline.
	•		Demand will continue to grow in emerging markets such as Eastern Europe, Russia, Central and South America, the Middle East and Africa.
	•		Construction investment in Asia will, on the whole, continue to grow steadily.

     Given this outlook, Makita intends to further improve its business performance as follows;

	•		Increase the globalization of our production by expanding our Chinese, Romanian and Brazilian factories.
	•		Continue to develop high value-added products and various new products that meet users’ needs.
	•		Aim to promote sales and enhance our brand by strengthening our relationship with Home Depot in the North American market.
	•		Further expand our global sales and after-sales support network.

          On the basis of above measures, Makita forecasts the following performance for the year ending March 31, 2009.

Consolidated Financial Forecast for the Year Ending March 31, 2009

		Yen (million)
		For the six months ending				For the year ending
		September 30, 2008				March 31, 2009
Net sales			169,500				343,000
Operating income			31,600				64,000
Income before income taxes			30,700				63,000
Net income			20,500				42,000

Assumption:

The above forecast is based on the assumption of exchange rates of 100 yen to US$1 and 158 yen to 1 Euro.

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

2. Financial position

(1) Analysis on assets, liabilities and total assets

     Total assets at the end of year increased by 17,973 million yen compared to the previous year to 386,467 million yen. This was due to increases in trade receivables and inventories that accompanying an increase in sales.

     Liabilities rose by 5,340 million yen compared to the previous year to 59,656 million yen, reflecting increases in trade notes and accounts payable.

     Shareholders’ equity increased by 13,823 million yen compared to the previous year to 316,498 million yen, mainly due to an increase in retained earnings.

(2) Analysis on cash flows and financial ratios

     Total cash and cash equivalents (cash) at the end of year amounted to 46,306 million yen, reflecting an increase of 9,178 million yen from the end of the previous year.

          (Net Cash Provided by Operating Activities)

     As mentioned in “Outline of operations and business results for the year ended March 31, 2008” section above, strong performance resulted in net cash from operating activities amounting to 29,275 million yen.

          (Net Cash Used in Investing Activities)

     Net cash used in investing activities amounted to 4,508 million yen. This reflected mainly capital expenditures for the construction of facilities at Head office, machinery and equipment and metal molds for new products, and tender offer for shares of Fuji Robin Industries Ltd.

          (Net Cash Used in Financing Activities)

     Net cash used in financing activities amounted to 13,815 million yen, reflecting the payment of cash dividends and repayment of short-term borrowings.

Financial ratios

		As of (year ended) March 31,
		2004				2005				2006				2007				2008
Operating income to net sales ratio			8.0	%			16.1	%			20.0	%			17.2	%			19.6	%
Equity ratio			69.5	%			75.8	%			81.8	%			82.1	%			81.9	%
Equity ratio based on a current market price			69.3	%			97.1	%			160.0	%			170.4	%			116.4	%
Debt redemption (years)			0.7				0.5				0.1				0.1				0.1
Interest coverage ratio (times)			47.8				28.4				54.7				102.4				108.8

Definitions:

     Operating income to net sales ratio: operating income/net sales

     Equity ratio: shareholders’ equity/total assets

     Equity ratio based on a current market price: total current market value of outstanding shares/total assets

     Debt redemption: interest-bearing debt/net cash inflow from operating activities

     Interest coverage ratio: net cash inflow from operating activities/interest expense

Notes:			1.			All figures are calculated based on a consolidated basis.
			2.			The total current market value of outstanding shares is calculated by multiplying the closing market price at the period end by the number of outstanding shares (after deducting the number of treasury stock.)
			3.			Interest-bearing debt includes all consolidated balance-sheet debt on which interest payments are made.

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

3. Basic policy regarding profit distribution and cash dividend for the fiscal 2008 and 2009

     Makita’s basic policy on the distribution of profits is to maintain a consolidated dividend payout ratio of 30% or greater, with a lower limit on annual cash dividends of 18 yen per share. However, in the event special circumstances arise, computation of the amount of dividends will be based on consolidated net income after certain adjustments. With respect to repurchases of its outstanding shares, Makita aims to implement a flexible capital policy, augment the efficiency of its capital employment, and thereby boost shareholder profit. Also Makita continues to consider execution of own share repurchases in light of trends in stock prices.

     Makita intends to maintain a financial position strong enough to withstand the challenges associated with changes in its operating environment and other changes and allocate funds for strategic investments aimed at expanding its global operations.

Our forecast for dividends is as follows;

		For the year ended				For the year ending
		March 31, 2008				March 31, 2009
		(Result and Forecast)				(Forecast)
Cash dividend per share:
Interim		30.00 yen				30.00 yen
Year-end		67.00 yen				(Note 1)
Total		97.00 yen				(Note 1)

Notes:			1.			The Board of Directors plans to meet in April 2009 for a report on earnings for the year ending March 31, 2009. At such time, in accordance with the basic policy regarding profit distribution mentioned above, the Board of Directors plans to propose a dividend equivalent to at least 30% of net income. The Board of Directors will submit this proposal to the General Meeting of Shareholders scheduled for June 2009. However, if certain special circumstances arise, computation of the amount of dividends will be based on consolidated net income after certain adjustments.
			2.			The consolidated dividend payout ratio is calculated as annual dividends per share divided by consolidated net income per share (after adjustments for special circumstances) and 100 is multiplied.

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

2. GROUP STRUCTURE

     Makita Corporation (the “Company”) and its consolidated subsidiaries (collectively “Makita”) mainly manufacture and sell portable electric power tools. Makita is comprised of the Company, 48 consolidated subsidiaries and an equity method affiliate.

     Group Structure of Makita is outlined as follows;

     

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

3. MANAGEMENT POLICIES

1. Basic Policies

     Makita has set itself the goal of consolidating a strong position in the global power tool industry as a global supplier of a comprehensive range of power tools that assist people in creating homes and living environments. In order to achieve this, Makita has established strategic business approaches and quality policies such as “A management approach in symbiosis with society” “Managing to take good care of our customers,” “Proactive, sound management” and “Emphasis on trustworthy and reliable corporate culture as well as management to draw out the capabilities of each employee.” Makita aims to generate solid profitability so that Makita can promote its sustained corporate development and meet the needs of its shareholders, customers, and employees as well as regional societies where Makita operates.

2. Target Management Indicators

     Makita believes that attaining sustained growth and maintaining high profitability are the ways to increase corporate value. Makita’s specific numerical target is to maintain a stable ratio of operating income to net sales on a consolidated basis of 10% or more.

3. Medium-to-Long-Term Management Strategy

     Makita aims to build a strong brand equity that is unrivaled in the industry and to become what it refers to as a “Strong Company,” In other words, to become a company that can obtain and maintain worldwide market leadership as a global total supplier of tools such as power tools for professional use, gardening tools, and air tools. This is to be accomplished through the ability to develop new products that satisfy professional users, a global production structure that achieves both high quality and cost competitiveness, as well as a sales and after-sales service structure that leads the industry both in the domestic and overseas markets.

     In order to carry out this management strategy, Makita is focusing its management resources on the professional-use tool category, while maintaining its strong financial position that can withstand any unpredictable changes in the operational environment including those related to foreign exchange risk and country risk.

4. Preparing for the Future

     Makita will devote its energy to further improvement in performance by aggressively tackling issues such as the ongoing early release of new products ahead of competitors, the establishment of a production system that can accommodate the diverse needs of the market, enhancement in brand power by boosting sales via home improvement channel in North America, and intensification of the areas of gardening equipment including engine-powered tools and air tools.

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

4. CONSOLIDATED FINANCIAL STATEMENTS

1. CONDENSED CONSOLIDATED BALANCE SHEETS

		Yen (millions)
		As of March				As of March				Increase
		31, 2007				31, 2008				(Decrease)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			37,128				46,306				9,178
Time deposits			6,866				2,393				(4,473	)
Marketable securities			58,217				49,443				(8,774	)
Trade receivables-
Notes			3,125				2,950				(175	)
Accounts			54,189				60,234				6,045
Less- Allowance for doubtful receivables			(869	)			(1,018	)			(149	)
Inventories			92,800				112,187				19,387
Deferred income taxes			5,080				6,478				1,398
Prepaid expenses and other current assets			9,963				11,382				1,419
Total current assets			266,499				290,355				23,856
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land			16,732				18,370				1,638
Buildings and improvements			57,242				64,268				7,026
Machinery and equipment			74,087				75,651				1,564
Construction in progress			5,576				2,765				(2,811	)
			153,637				161,054				7,417
Less- Accumulated depreciation			(90,257	)			(91,996	)			(1,739	)
			63,380				69,058				5,678
INVESTMENTS AND OTHER ASSETS:
Investment securities			27,279				18,034				(9,245	)
Deferred income taxes			1,367				1,826				459
Other assets			9,969				7,194				(2,775	)
			38,615				27,054				(11,561	)
			368,494				386,467				17,973

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

		Yen (millions)
		As of March				As of March				Increase
		31, 2007				31, 2008				(Decrease)
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term borrowings			1,892				1,724				(168	)
Trade notes and accounts payable			16,025				23,372				7,347
Accrued payroll			8,571				8,096				(475	)
Accrued expenses and other			17,353				18,888				1,535
Income taxes payable			10,447				7,518				(2,929	)
Deferred income taxes			28				58				30
Total current liabilities			54,316				59,656				5,340
LONG-TERM LIABILITIES:
Long-term indebtedness			53				908				855
Accrued retirement and termination allowances			3,227				3,716				489
Deferred income taxes			4,976				1,215				(3,761	)
Other liabilities			1,112				1,958				846
			9,368				7,797				(1,571	)
MINORITY INTERESTS			2,135				2,516				381
SHAREHOLDERS’ EQUITY:
Common stock			23,805				23,805				—
Additional paid-in capital			45,437				45,753				316
Legal reserve and retained earnings			221,034				254,860				33,826
Accumulated other comprehensive income (loss)			12,697				(7,657	)			(20,354	)
Treasury stock, at cost			(298	)			(263	)			35
			302,675				316,498				13,823
			368,494				386,467				17,973

Note: Accumulated other comprehensive income (loss) as of March 31, 2007 and 2008 was as follows;

		Yen (millions)
		As of March				As of March
		31, 2007				31, 2008
Foreign currency translation adjustments			2,764				(7,510	)
Net unrealized holding gains on available-for-sale securities			10,280				3,885
Pension liability adjustment			(347	)			(4,032	)
Total accumulated other comprehensive income (loss)			12,697				(7,657	)

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

2. CONDENSED CONSOLIDATED STATEMENTS OF INCOME

		Yen (millions)
		For the year ended								For the year ended								Increase
		March 31, 2007								March 31, 2008								(Decrease)
		(Amount)				(%)				(Amount)				(%)				(Amount)				(%)
NET SALES			279,933				100.0				342,577				100.0				62,644				22.4
Cost of sales			163,909				58.6				199,220				58.2				35,311				21.5
GROSS PROFIT			116,024				41.4				143,357				41.8				27,333				23.6
Selling, general, administrative and other expenses			67,848				24.2				76,326				22.2				8,478				12.5
OPERATING INCOME			48,176				17.2				67,031				19.6				18,855				39.1
OTHER INCOME (EXPENSES) :
Interest and dividend income			1,364				0.5				2,092				0.6				728				53.4
Interest expense			(316	)			(0.1	)			(269	)			(0.1	)			47				—
Exchange losses on foreign currency transactions, net			(418	)			(0.2	)			(1,233	)			(0.4	)			(815	)			—
Realized gains (losses) on securities, net			918				0.3				(1,384	)			(0.4	)			(2,302	)			—
Other, net			(401	)			(0.1	)			(466	)			(0.1	)			(65	)			—
Total			1,147				0.4				(1,260	)			(0.4	)			(2,407	)			—
INCOME BEFORE INCOME TAXES			49,323				17.6				65,771				19.2				16,448				33.3
PROVISION FOR INCOME TAXES:
Current			16,486				5.9				19,148				5.6				2,662				16.1
Deferred			(4,134	)			(1.5	)			580				0.2				4,714				—
Total			12,352				4.4				19,728				5.8				7,376				59.7
NET INCOME			36,971				13.2				46,043				13.4				9,072				24.5

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

3. CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

		Yen (millions)
		For the year ended				For the year ended
		March 31, 2007				March 31, 2008
COMMON STOCK:
Beginning balance			23,805				23,805
Ending balance			23,805				23,805
ADDITIONAL PAID-IN CAPITAL:
Beginning balance			45,437				45,437
Disposal of treasury stock			—				316
Ending balance			45,437				45,753
LEGAL RESERVE AND RETAINED EARNINGS:
Beginning balance			192,255				221,034
Cash dividends			(8,192	)			(12,217	)
Net income			36,971				46,043
Ending balance			221,034				254,860
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Beginning balance			5,345				12,697
Other comprehensive income (loss) for the year			7,515				(20,354	)
Adjustment to initially apply SFAS No.158, net of tax			(163	)			—
Ending balance			12,697				(7,657	)
TREASURY STOCK, at cost:
Beginning balance			(258	)			(298	)
Purchases			(40	)			(51	)
Disposal			—				86
Ending balance			(298	)			(263	)
TOTAL SHAREHOLDERS’ EQUITY			302,675				316,498
DISCLOSURE OF COMPREHENSIVE INCOME:
Net income for the year			36,971				46,043
Other comprehensive income for the year			7,515				(20,354	)
Total comprehensive income for the year			44,486				25,689

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

4. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		Yen (millions)
		For the year ended				For the year ended
		March 31, 2007				March 31, 2008
Net cash provided by operating activities			32,360				29,275
Net cash used in investing activities			(27,276	)			(4,508	)
Net cash used in financing activities			(8,307	)			(13,815	)
Effect of exchange rate changes on cash and cash equivalents			1,297				(1,774	)
Net change in cash and cash equivalents			(1,926	)			9,178
Cash and cash equivalents, beginning of year			39,054				37,128
Cash and cash equivalents, end of year			37,128				46,306

5. SIGNIFICANT ACCOUNTING POLICIES

(1) Scope of consolidation and equity method

Number of consolidated subsidiaries: 48

Major subsidiaries are as follows;

Makita U.S.A. Inc., Makita Corporation of America, Makita (U.K.) Ltd.,
Makita Manufacturing Europe Ltd. (U.K.), Makita Werkzeug GmbH (Germany),
Dolmar GmbH (Germany), Makita S.p.A. (Italy), Makita Oy (Finland), Makita (China) Co., Ltd.,
Makita (Kunshan) Co., Ltd. (China)

Number of equity method affiliates: 1

(2) Significant Accounting Policies (Summary)

Consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.

1.

Marketable and Investment Securities

Makita accounts for marketable and investment securities in accordance with SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” which requires all investments in debt and marketable equity securities to be classified as either trading, available-for-sale securities or held-to-maturity securities.

2.

Allowance for Doubtful Receivables

Allowance for doubtful receivables represents the Makita’s best estimate of the amount of probable credit losses in its existing receivables. The allowance is determined based on, but is not limited to, historical collection experience adjusted for the effects of the current economic environment, assessment of inherent risks, aging and financial performance.

3.

Inventories

Inventory costs include raw materials, labor and manufacturing overheads. Inventories are valued at the lower of cost or market price, with cost determined principally based on the average cost method.

4.

Property, Plant and Equipment and Depreciation

For the Company, depreciation of property, plant and equipment is computed principally by using the declining-balance method over the estimated useful lives. Most of the consolidated subsidiaries have adopted the straight-line method for computing depreciation.

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

5.

Goodwill and Other Intangible Assets

Makita follows the provisions of SFAS No. 141 and SFAS No. 142. SFAS No. 141, “Business Combinations” requires the use of only the purchase method of accounting for business combinations and refines the definition of intangible assets acquired in a purchase business combination. SFAS No. 142, “Goodwill and Other Intangible Assets” eliminates the amortization of goodwill and instead requires annual impairment testing thereof. SFAS No. 142 also requires acquired intangible assets with a definite useful life to be amortized over their respective estimated useful lives and reviewed for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

6.

Income Taxes

Makita accounts for income taxes in accordance with the provision of SFAS No. 109, “Accounting for Income Taxes,” which requires an asset and liability approach for financial accounting and reporting for income taxes. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Makita also adopts FIN 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109”, which does not have a significant impact on its consolidated financial results.

7.

Pension Plans

Makita accounts for pension plans in accordance with the provisions of SFAS No. 87, “Employers’ Accounting for Pensions” and SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans.”

8.

Impairment of Long-Lived Assets

Makita accounts for impairment of long-lived assets with finite useful lives in accordance with the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-lived Assets.”

9.

Derivative Financial Instruments

Makita conforms to SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended.

10.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

11.

Revenue Recognition

Makita recognizes revenue at the time of delivery or shipment when all of the following conditions are met; (1) The sales price is fixed and determinable, (2) Collectability is reasonably assured, (3) The title and risk of loss pass to the customer, and (4) Payment terms are established consistent with Makita’s normal payment terms.

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

6. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Operating segment information

For the year ended March 31, 2007
		Yen (millions)
																										Corporate
										North																and elimi-				Consoli-
		Japan				Europe				America				Asia				Other				Total				nations				dated
Sales:
(1) External customers			61,776				124,924				51,432				9,698				32,103				279,933				—				279,933
(2) Inter-segment			64,040				5,709				5,297				67,021				149				142,216				(142,216	)			—
Total			125,816				130,633				56,729				76,719				32,252				422,149				(142,216	)			279,933
Operating expenses			108,403				112,577				54,217				66,815				28,786				370,798				(139,041	)			231,757
Operating income			17,413				18,056				2,512				9,904				3,466				51,351				(3,175	)			48,176
For the year ended March 31, 2008
		Yen (millions)
																										Corporate
										North																and elimi-				Consoli-
		Japan				Europe				America				Asia				Other				Total				nations				dated
Sales:
(1) External customers			72,466				160,218				56,234				11,271				42,388				342,577				—				342,577
(2) Inter-segment			69,540				5,606				5,212				101,211				172				181,741				(181,741	)			—
Total			142,006				165,824				61,446				112,482				42,560				524,318				(181,741	)			342,577
Operating expenses			120,020				138,850				59,727				98,468				36,964				454,029				(178,483	)			275,546
Operating income			21,986				26,974				1,719				14,014				5,596				70,289				(3,258	)			67,031

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

Marketable securities and investment securities

1. Available-for-sale securities

As of March 31, 2007
		Yen (millions)
						Gross unrealized holding												Carrying
		Cost				Gains				Losses				Fair value				Amount
Marketable securities:
Equity securities			1,481				1,914				—				3,395				3,395
Debt securities			6,438				10				1				6,447				6,447
Investments in trusts			45,115				2,025				64				47,076				47,076
			53,034				3,949				65				56,918				56,918
Investment securities:
Equity securities			11,113				13,856				12				24,957				24,957
Investments in trusts			720				264				12				972				972
			11,833				14,120				24				25,929				25,929
As of March 31, 2008
		Yen (millions)
						Gross unrealized holding												Carrying
		Cost				Gains				Losses				Fair value				Amount
Marketable securities:
Equity securities			1,473				941				2				2,412				2,412
Debt securities			3,411				83				—				3,494				3,494
Investments in trusts			42,563				991				616				42,938				42,938
			47,447				2,015				618				48,844				48,844
Investment securities:
Equity securities			10,234				5,977				107				16,104				16,104
Investments in trusts			184				—				2				182				182
			10,418				5,977				109				16,286				16,286

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

2. Held-to-maturity securities

As of March 31, 2007

		Yen (millions)
						Gross unrealized holding												Carrying
		Cost				Gains				Losses				Fair value				Amount
Marketable securities:
Debt securities			1,299				—				1				1,298				1,299
Investment securities:
Debt securities			1,350				—				107				1,243				1,350

As of March 31, 2008

		Yen (millions)
						Gross unrealized holding												Carrying
		Cost				Gains				Losses				Fair value				Amount
Marketable securities:
Debt securities			599				—				—				599				599
Investment securities:
Debt securities			1,748				—				71				1,677				1,748

Net sales by product categories

		Yen (millions)
		For the year ended								For the year ended								Increase
		March 31, 2007								March 31, 2008								(Decrease)
		(Amount)				(%)				(Amount)				(%)				(%)
Finished goods			239,017				85.4				296,279				86.5				24.0
Parts, repairs and accessories			40,916				14.6				46,298				13.5				13.2
Total net sales			279,933				100.0				342,577				100.0				22.4

Overseas sales by product categories

		Yen (millions)
		For the year ended								For the year ended								Increase
		March 31, 2007								March 31, 2008								(Decrease)
		(Amount)				(%)				(Amount)				(%)				(%)
Finished goods			204,670				87.8				257,334				88.6				25.7
Parts, repairs and accessories			28,403				12.2				33,050				11.4				16.4
Total overseas sales			233,073				100.0				290,384				100.0				24.6

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English Translation of “KESSAN TANSHIN” originally issued in Japanese language

Information per share

		Yen
		As of				As of
		March 31, 2007				March 31, 2008
Shareholders’ equity per share			2,106.28				2,201.36

		Yen
		For the year ended				For the year ended
		March 31, 2007				March 31, 2008
Net income per share:
Basic			257.27				320.30
Diluted			257.27				320.30