Year ending September 2005:
Consolidated Financial and Operating Results (Excerpt) for the First Quarter, Ended December 31, 2004
January 28, 2005
Listed Company: SHL-JAPAN Ltd. (Securities Code: 4327 G)
Consolidated Operating Results(All amounts less than one million yen in the tables below are truncated.)
Net sales
Millionsof yenFirst quarter, ended
December 31, 2004
First quarter, ended
December 31, 2003
Reference: Year ended
September 30, 2004%

Operating income

Ordinary income

Net income (loss)(loss)(loss)(for the quarter)

Millionsof yen%Millionsof yen%

Millionsof yen%177(−)

(29)

(−)

(33)

(−)

(23)

(−)

−(−)

−(−)

−

(−)

−

(−)

1,256

(−)

376

(−)

371

(−)

208

(−)

SHL-JAPAN Ltd. (the “Company”) set up a consolidated subsidiary as of August 3, 2004, and began thereafter toprepare consolidated financial statements effective from the previous fiscal term, the year ended September 30,
2004. However, such consolidated financial statements were not prepared for the corresponding first quarter of theprevious year. As a consequence, the comparison and analysis on the consolidated operating results for the firstquarter, ended December 31, 2004, is with the nonconsolidated operating results of SHL-JAPAN Ltd. for the same
year-earlier quarter, taking into account the fact that the operating results of the newly consolidated subsidiarywere insignificant.
Net sales for the quarter under review (October 1, 2004, through December 31, 2004) decreased 9.9% year overyear to ¥177 million. By business segment, ¥52 million was “Product sales” (a 3.8% decline from thecorresponding year-earlier period), ¥123 million was “Consultancy sales” (down 13.2%) and ¥1 million was“Training sales” (up 163.5%). “Consultancy sales” decreased by ¥18 million on a sales amount basis although the“Product sales” and “Training sales” segments remained flat compared with the corresponding year-earlier period.
The sales results were principally attributable to decreased sales of the marksheet version “SOFT” (SHL’s original
filter test). One major cause of this overall sales decline was the delayed timing of our sales accounting period.
This reflects a considerable increase in the number of users that have adopted the employment screening start timeof April 1 or later as a result of the industrial consensus under the “Charter of Corporate Ethics,” in which
corporate recruiting activities adhere to students’ educational schedules. The other cause was the delayed timingof contracts, reflecting the approaching enforcement of the Act for Protection of Computer Processed Personal
Data held by Administrative Organs (known as the Personal Information Protection Law) to be implemented inApril 2005.
The operating loss for the quarter under review was ¥29 million. The cost of goods sold decreased ¥4 million year1

over year, whereas net sales decreased ¥19 million and selling, general and administrative expenses increased ¥7million. Taking into account these factors, the operating loss expanded by ¥21 million from the corresponding
year-earlier period. The decline in the cost of goods sold was mainly due to a decline of ¥6 million in labor cost at
the manufacturing department. The rise in selling, general and administrative expenses was due principally toincreases of ¥3 million in the administrative department and ¥4 million in remuneration for lawsuit-related
expenses and outside consulting fees.
The ordinary loss for the quarter under review increased ¥26 million over the corresponding year-earlier period to¥33 million. A year-over-year increase of ¥4 million in nonoperating expenses mainly consisted of ¥4 million instock issuance costs related to a stock split.
After taking into account the above factors and ¥10 million in income taxes―deferred, which worked to partly
reduce the operating loss, the net loss for the quarter was ¥23 million, expanding ¥13 million year over year.
Projected Consolidated Operating Results for the Year Ending September 30, 2005 (October 1, 2004, throughSeptember 30, 2005)
Net sales

Ordinary income

Net income per

Net income

shareMillions of yen

Millions of yen

Millions of yen

1,508518299

Yen

Year ending
September 30, 2005

8,888.86(Full year)
The operating results for the first quarter, ended December 31, 2004, showed a decline in net sales and net income
compared with the respective nonconsolidated operating results. However, these declines do not indicate reducedorders or a worsened market environment, but rather that an increasing number of users adopted the delayed
employment screening start time of April 1 or later and the delayed timing of contracts, reflecting the enforcementof the so-called Personal Information Protection Law to be implemented in April 2005. These unfavorable causes
were anticipated at the planning stage of the annual management plan. The projected orders calculated by theSHL-JAPAN Group for administrative purposes have been favorably recorded at the targeted levels.
As for the projected consolidated operating results for the year ending September 30, 2005, the SHL-JAPANGroup endeavors to enhance its marketing activities through its agents to meet the rising demand for recruiting
new graduates, in line with the recovering desire for employment of many corporations. In addition, the SHLJAPAN Group considers the projected consolidated operating results achievable by aggressively promoting
marketing efforts in the employee assessment service market in which internal evaluation on personal
performance is emphasized.

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