Year ending September 2006
Consolidated Financial and Operating Results (Excerpt) for the First Quarter, Ended
December 31, 2005
January 31, 2006
Listed Company: SHL-JAPAN Ltd. (Securities Code: 4327 G)[Qualitative information regarding consolidated operating results]
Net sales for the quarter under review (October 1, 2005, through December 31, 2005) increased ¥48
million from the year-earlier quarter to ¥225 million, up 27.5% year over year.
By business segment, ¥72 million was “Product sales” (a 39.7% increase from the correspondingyear-earlier period), ¥151 million was “Consultancy sales” (up 22.9%) and ¥1 million was “Trainingsales” (down 2.6%).
“Product sales” increased ¥20 million from the corresponding year-earlier period. Major contributors
to this increase were favorable sales of “GAB” and “CAB,” aptitude test products used for
employment screening of new graduates, and of “KESSAIBAKO,” an internal assessment tool foremployees.
“Consultancy sales” rose ¥28 million year over year. This sales expansion reflected increased sales
from the internal assessment service area centering on the “Assessment Center,” an innovative
service for multifaceted evaluation to be made by several evaluators.
“Training sales” were flat compared with the corresponding year-earlier period.
Although a small consolidated operating loss was recorded for the quarter under review, the income
situation improved compared with a ¥29 million operating loss for the year-earlier period. The
improvement was largely the result of higher sales that almost absorbed increases in costs andexpenses. Cost of goods sold increased ¥13 million, or 40.9% year over year, to ¥46 million. This
rise in cost of goods sold was principally attributable to increases in “Product sales” and “Consultingsales,” which is based on a made-to-order production system.
Selling, general and administrative expenses rose ¥6 million, or 3.6%, to ¥180 million. Major factorsof this rise were higher personnel expenses (¥4 million) due to the increased number of staff in thesales and administrative departments and a rise in sales promotion related expenses (¥2 million).
Consolidated ordinary income was recorded for the quarter under review despite a consolidated
ordinary loss of ¥33 million in the year-earlier period. This improvement was mainly attributable tothe improved operating income summary and the recording of return premiums for cancellation
regarding directors’ life insurance as a nonoperating income item.
After taking into account the above factors and ¥2 million in income taxes―deferred, consolidated
net income for the first quarter, ended December 31, 2005, was ¥2 million, thereby restoring
profitability compared with a net loss of ¥23 million for the corresponding year-earlier period.

[Qualitative information regarding consolidated financial forecasts]
The SHL-JAPAN Group has not amended the consolidated financial forecasts for the year ending
March 31, 2006, which were released on October 31, 2005, as the consolidated operating results forthe quarter under review were as previously projected. Accordingly, we forecast net sales of ¥1,700
million (up 20.5% year over year), ordinary income of ¥590 million (up 23.7%) and net income of¥342 million (up 24.3%) on a consolidated basis.