Looking back at fiscal 2006, the ASICS Group‘s consolidated performance was healthy.
Growth in the fiscal year was helped by overseas businesses, which recorded sales of \92,078 million. As such, sales registered overseas have exceeded sales by domestic businesses faster than we had anticipated. Growth overseas is admirable in light of the Company‘s goal of becoming a global enterprise. Nonetheless, sales have remained weak in domestic businesses. Looking ahead, further initiatives for growing our domestic businesses are challenges for the next fiscal year.

The ASICS Revolution Plan, our previous medium-term business plan running through fiscal year under review, set our sites on future growth by turning away from the experiences that have marked our success in the past and embracing wholly revolutionary and innovative concepts. Now that the plan is steadily reaping rewards, sales levels in our domestic and overseas businesses are on track to switch places.
Based on the innovative changes fostered under the previous plan, the Company introduced the ACP in October 2005, a five-year management plan that has been enacted in fiscal 2007, ending March 31, 2007, which aims to transform the Company into a global enterprise. The first concrete target is to attain consolidated net sales of \300 billion (\200 billion overseas and \100 billion in Japan). Specifically, we will further promote innovative new ways of thinking and planning in domestic businesses and grapple with radical initiatives that break completely with company practices in the past.

Reaching the \100 billion sales goal for Japan will require some bold, innovative measures. We will take proactive steps to challenge ourselves in bolstering sales without counting on the traditional steps used for sustaining growth in the past.
For example, in marketing, we have discarded the old concept that the Company revenues are derived from sales to distributors. Instead, the idea that we should find ways to sell our merchandise directly to the customers through final retail sales is now firmly entrenched. We are confident that we can create excellent merchandise if we listen directly to our customers as a manufacturer and produce goods reflecting their ideas and wishes. If we raise the brand value of our goods, our products will flow smoothly through distribution channels.
In addition, taking advantage of our technological skills honed over many years in meeting the needs of top athletes for increasing brand value in the sports lifestyle field is crucial. In one such initiative, the Company restored the Onitsuka Tiger brand four years ago, reviving a brand that had formerly been specifically for athletic competition and targeting it for the sports lifestyle field. Also, we are developing directly managed stores, called ASICS LI-FEEL, which sell both footwear and apparel as we work to appeal to three different generations.
Moreover, overseas operations have been expanding at a strong pace, but footwear accounts for nearly 90% of sales. Consequently, enlarging apparel businesses abroad is now a key strategy. Because apparel business development has been through licensing contracts with overseas subsidiaries, cohesive brand development has been relatively difficult in overseas markets. Looking ahead, the Company will form global teams, establish production bases, and develop the foundations for apparel businesses abroad under the guidance of the head office in Japan. We intend to build on our continuing successes in the United States and Europe while getting operations in China and Taiwan on solid growth tracks.

Since its founding, the Company has channeled resources into elevating its craftsmanship, given its affection and admiration for sports. Our participation in the Olympic Games and other major sporting events has its roots in initiatives to manufacture goods tailored to the perspective of top athletes.
The birthrate has been declining recently, but a growing number of people are walking, running, and participating in other light physical fitness activities. Consumers are increasingly keen not only on sports and competition for the sake of winning and losing, but on exercising to maintain their health and refresh their bodies.
Under these conditions, we at ASICS asked ourselves how we could help today's needs as an enterprise that had been mainly focused on athletic competition. The answer is that we want to make more people to enjoy physical activities using our products cultivated through engineering in sports fields.
Despite our ongoing innovation, one trend that does not change is our emphasis on technology and fine craftsmanship in production. This focus on craftsmanship remains the wellspring of our actions and the underlying force that will enable us to survive and thrive in the industry worldwide.

Craftsmanship in manufacturing will remain a vital concern, and the concept of providing products and services that create value for all customers will remain at the core of our operations. The Company aims to build the underlying foundations that will enable it to foresee and adapt to change well ahead of the times.
Kihachiro Onitsuka, the founder of ASICS and the current chairman, has often noted that shareholders, employees, and business partners form a united entity of three parts that shares a common destiny. I concur with this view, and I am confident that our longstanding philosophy and practices will continue serving to underpin growth.
Fortunately, the Company continues generating strong sales and earnings. We will make concerted efforts to further enhance enterprise value with as we seek growth over a long-term perspective.