Financial Results for the First Three Quarters of the Year Ending March 31, 2015 (J-GAAP)
February 9, 2015
Name of listed company: Nichii Gakkan Company
Listed on: Tokyo Stock Exchange 1st Section
Securities code:
9792
URL:
http://www.nichiigakkan.co.jp
Representative:
Akihiko Terada, Chairman, President and CEO
Contact:
Koichi Terada, Director
TEL: 03-3291-2121
Scheduled date for filing the quarterly financial report: February 13, 2015
Scheduled date to start dividends distribution:—
Supplementary quarterly materials prepared:
Yes
Quarterly results information meeting held:
Yes (for institutional investors and financial analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated financial results for the first three quarters ended December 31, 2014
(April 1, 2014 – December 31, 2014)(1) Consolidated operating results(Percentage figures represent changes year on year.)
Net Sales
Operating Income
Ordinary Income
Net Income
Million yen

Nine months ended
December 31, 2014
Nine months ended
December 31, 2013
(Note) Comprehensive income:%Million yen%

Million yen%

Million yen%

204,307

0.0

4,795

(5.3)

3,376

(14.5)

1,336(41.9)

204,208

2.3

5,061

(23.7)

3,951(35.5)

2,300(20.3)

Nine months ended December 31, 2014: 1,431 million yen (-34.7%);
Nine months ended December 31, 2013: 2,189 million yen (-27.6%)

Net Income per Share

Diluted Net Income per Share
Yen

Nine months ended
December 31, 2014
Nine months ended
December 31, 2013

Yen

19.18

—

32.92

—

(2) Consolidated financial position
Total Assets

Net Assets

Equity Ratio

Million yen

As of December 31, 2014
As of March 31, 2014
Reference: Shareholders’ equity:

Million yen

179,437
176,246%

60,80762,32733.7
35.2

As of December 31, 2014: 60,462 million yen; As of March 31, 2014: 61,999 million yen

2. Dividends
1Q-endAnnual dividends
3Q-end2Q-endYen——

Year ended March 31, 2014
Year ending March 31, 2015
Year ending March 31, 2015
(forecast)

Yen

Year-end

Yen

—
—

10.00
10.00

Annual
Yen

Yen

10.00

20.00

10.00

20.00

(Note) Revisions to most recently announced dividend forecast: No

3. Forecast of consolidated financial results for the year ending March 31, 2015 (April 1, 2014 – March 31, 2015)(Percentage figures represent changes from previous year for full year figures.)

Net Sales

Operating Income

Million yen

Full year

274,300%

1.1

Million yen

7,700

Ordinary Income%

21.8(Note) Revisions to most recently announced financial results forecast: No

Million yen

5,700

%

15.4

Net Income
per Share

Net Income
Million yen

3,000

%

6.0

Yen

42.93

* Notes(1) Significant changes in subsidiaries during the term (Changes in specified subsidiaries resulting in changes in scope of
consolidation): None
(2) Application of specific accounting for preparing the quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes of accounting estimates and restatement
1) Changes in accounting policies due to revisions of accounting standards, etc.: Yes
2) Changes in accounting policies due to reasons other than those stated in 1): None
3) Changes in accounting estimates: None
4) Restatement: None
(Note) For details, please refer to page 5, (3) Changes in accounting policies, accounting estimates, and restatement of 2. Summary information (notes) of
Attached Document.

(4) Number of shares outstanding (common stock)1) Number of shares issued and outstanding (including treasury stock)
As of December 31, 2014:
73,017,952
As of March 31, 2014:
73,017,952
2) Number of treasury stock
As of December 31, 2014:
4,932,208
As of March 31, 2014:
3,133,768
3) Average number of shares issued and outstanding in each period (quarterly consolidated cumulative period)
As of December 31, 2014:
69,705,918
As of December 31, 2013:
69,885,644* Implementation status of quarterly review procedures
The quarterly review procedure based on the Financial Instruments and Exchange Act does not apply to these quarterly financial statements,
and the procedure based on the Financial Instruments and Exchange Act is in operation as of the release of these quarterly financial
statements.

* Explanation concerning the appropriate use of financial result forecasts and other special notes(Forward looking statements)
The above forecasts are based on information Nichii Gakkan had as of the time this report was prepared and on certain assumptions judged tobe reasonable. Various factors may cause actual results to differ significantly from forecasts. Please refer to the disclaimers, provided under“(3) Information on the future outlook, including consolidated financial results forecasts” of “1. Qualitative information on quarterly
financial results” on page 4 of the quarterly consolidated financial results (attached document), regarding the assumptions upon which
forecasts are based and the use of forecasts.

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

Table of Contents for the Attached Document
1. Qualitative information on quarterly financial results ····································································· 2(1) Details of business results ································································································· 2(2) Details of financial position ······························································································· 4(3) Information on the future outlook, including consolidated financial results forecasts ····························· 4
2. Summary information (notes) ································································································ 5(1) Significant changes to subsidiaries during the term ···································································· 5(2) Application of specific accounting for preparing the quarterly consolidated financial statements ··············· 5(3) Changes in accounting policies, accounting estimates and restatement ············································· 5
3. Quarterly consolidated financial statements ················································································ 6(1) Quarterly consolidated balance sheets ··················································································· 6(2) Quarterly consolidated statements of income and comprehensive income ·········································· 8
Quarterly consolidated statements of income
Nine months ended December 31 ······················································································ 8
Quarterly consolidated statements of comprehensive income
Nine months ended December 31 ······················································································ 9(3) Notes to quarterly consolidated financial statements ································································· 10
Notes on the premise of a going concern ··············································································· 10
Notes on significant fluctuation in the amount of shareholders’ equity ············································ 10

1Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

1. Qualitative information on quarterly financial results(1) Details of business results
In the first nine months of the fiscal year ending March 31, 2015, the Japanese economy saw corporate earnings andthe employment environment improve against the backdrop of on-going economic and financial policies, although theoutlook remained uncertain, mainly due to stagnant consumer spending associated with the consumption tax hike, as
well as further depreciation of the yen.
In the social security sector, the reform of medical and long-term care systems is underway, centered on therealignment of sickbed functions and the establishment of community-wide comprehensive care. In December, 2014,
a proposal was put together, aimed at the revision of the Long-term Insurance System and compensation for long-termcare, both of which are scheduled to be implemented in April, 2015. The proposal was made on the fundamental
policy of the “enhancement of support for people with moderate to severe disabilities at home and elderly people withdementia”, “promotion of measures to secure human resources for long-term care”, and “creation of a system for theproper evaluation and the efficient provision of services”. Also included in the proposal were measures forrevitalization, such as the easing of standards for operating services and improvement in the treatment of long-termcare staff, while benefits were restrained, reflecting the current situation of the financial resources of insurance
programs.
The Nichii Gakkan Group built a new business execution system and formulated a new business strategy focused on“globalization” in October, 2014, to make sure that the Group would be unaffected by institutional risk and achieve“stable growth of long-term profits.”
As for the businesses in China, which is expected to play a central role in the new strategy, the Group had beenworking to develop foundations for sound business in the country, starting with the conclusion of a strategic allianceagreement with the China Planning Institute on Aging in July. Across China, it is moving ahead with the formation of
the Zhihu Group by making local subsidiaries group companies in order to roll out a human resources development
business, a human support business (long-term care, home management, prenatal and postnatal care, etc.), and salesof sanitary products, and has decided to include into the Group 12 local subsidiaries (excluding two school
corporations, as a result of changes in the investment scheme) as of the end of December. The human resources
development business, which is the base of all the services, has commenced a pilot training program of instructors in
the country, making a steady start toward the establishment of business.
With respect to domestic businesses, the Group, while strengthening mainstay businesses, focused its efforts on thereinforcement of strategic businesses, such as the enhancement of medical management support services and services
not covered by long-term care insurance, active development of childcare services with an eye on the“Comprehensive Support System for Children and Child-rearing” to be implemented in April, 2015, etc.
In conjunction with the language education business, which marked the third year of service since the full-scale rollout,
the Group has strengthened the development of COCO Juku Junior, an English conversation school that addresses thestrong need for language study, while moving forward with reform efforts in terms of both an increase in the number ofstudents and improvement in the efficiency of class management, to move the business into the black.
Looking at the operating results, the Group recorded increased sales and decreased profits, reflecting such factors as adecrease in the number of students in the existing education business and an increase in costs for opening operatingbases for home-care services in the long-term care business, while in the medical support business, business remained
strong on the back of new contracts received from large-scale hospitals and further improved efficiency in contracted
services in the existing hospitals. The long-term and health care businesses saw an increase in the number ofcustomers for services not covered by long-term insurance, thanks to the enhanced provisioning of services thatcomprehensively respond to the needs for livelihood support in a community. The education business also saw asteady increase in the numbers of students of Gaba Corporation and COCO Juku Junior respectively.
As a result, the Group posted net sales of 204,307 million yen for the first three quarters under review (compared with
204,208 million yen posted in the same period of the previous fiscal year), an operating income of 4,795 million yen(compared with 5,061 million yen posted in the same period of the previous fiscal year), and ordinary income of 3,376
million yen (compared with 3,951 million yen posted in the same period of the previous fiscal year). Net income was
1,336 million yen (compared with 2,300 million yen posted in the same period of the previous fiscal year).
Results by business segment are as follows:2

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

<Medical Support Business>
The business remained strong, mainly due to contracts from some large-scale hospitals as a result of successfulproposals for comprehensive services including management support services, in addition to an expansion incontracted services in existing hospitals as well as an improvement in the operational efficiency on the back of staff
retention.
With respect to the development of management support services, the Group worked to develop diversified services
to address medical systems and environmental trends, such as the hosting of seminars, among other activities, under
the theme of DPC/international medical exchanges, and the establishment of NiCoLink, a portal site that disseminates
useful information for people who are engaged in medical services.
Net sales for the segment came to 79,600 million yen for the first three quarters period under review (compared with
79,372 million yen posted in the same period of the previous fiscal year). Operating income for the segment was
6,874 million yen (compared with 6,110 million yen posted in the same period of the previous fiscal year).
<Long-term Care Business>
To respond to the revision of compensation for long-term care, the Group strengthened sales chiefly to medical
institutions that facilitate the return of in-patients to home care, based the prioritization and optimization of services,while enhancing long-term care services that match community needs, such as dementia care and welfare services fordisabled people. It also focused efforts on the provisioning of comprehensive services that suit customer needs, bycollaborating with the health care business.
Looking at home-care services, the Group posted upfront investment expenses associated with the openings of new
operation bases, as it promoted active development of such bases.
Looking at the status of new operating bases established during the first three quarters, for its home care services, theGroup opened eleven care plan facilities (bringing the total number of these facilities to 801), ten home-visit carefacilities (increasing the total number of these facilities, including home-visit bathing facilities, to 1,122), eight
day-care facilities (bringing the total number of these facilities to 375), and one home nursing care facility (bringing
the total number of these facilities to 66). For its facility care services, the Group established eight Nichii no Hohoemigroup homes (bringing the total number of these homes to 270), four Nichii no Kirameki pay nursing homes (bringing
the total number of these homes to 62), and two Nichii Home pay nursing homes (bringing the total number of thesehomes to 56).
Net sales for the segment reached 108,932 million yen (compared with 107,584 million yen posted in the first threequarters of the previous fiscal year). Operating income for the segment was 9,480 million yen (compared with 9,841
million yen posted in the first three quarters of the previous fiscal year).
<Health Care Business>
The Group focused its efforts on developing and provisioning livelihood support services to respond to a variety ofneeds for such services, associated with an increase in the number of elderly households and the advancement of
women in society, and other factors. As a result, the segment performed strongly, primarily reflecting the continued
achievement of double-digit sales growth in Nichii Life (housekeeping services) and in health care products.
As for Nichii Life, the Group worked to improve proposals for service plans and to enhance service sites, targeting abroad range of generations, which led to an increased customer base.
Net sales for the Health Care Business segment came to 2,951 million yen (compared with 2,790 million yen posted
in the first three quarters of the previous fiscal year). Operating income for the segment was 161 million yen(compared with 105 million yen posted in the first three quarters of the previous fiscal year).

3

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

<Education Business>
The existing education business recorded stagnant results, as the number of students continued to decrease due to a
decline in the need for qualification acquisition against the backdrop of an improvement in the employment
environment. However, the Group strove to implement business management reform unified with the language
education business, such as the integration of classrooms and the reviewing of the balance in the allocation ofpromotional expenses. As for the strengthening of business functions as a business for provisioning human resources,
the Group took such initiatives as the implementation of on-site tours and job consultations, as well as the hosting of a“seminar for the improvement of long-term care skills,” as follow-ups after the acquisition of qualifications, incollaboration with the relevant businesses.
In the language education business, the Group strove to expand sales channels, mainly through the aggressive
development of COCO Juku Junior through franchising, sales to corporations, and organizing events. In terms of theenhancement in the added value of services, the Group worked to provide a series of services, leveraging the language
education networks established so far, such as organizing seminars in collaboration with the New York University
SCPS ALI Tokyo Center and YORK Global Study Center Co., Ltd.
GABA Corporation continued to perform strongly in terms of the number of students. It focused efforts on enhancing
services for corporations, mainly by opening two new learning studios at a large enterprise of general heavyequipment in December.
Net sales for the Education Business segment totaled 12,499 million yen (compared with 14,120 million yen posted in
the first three quarters of the previous fiscal year). Operating loss for the segment was 5,788 million yen (comparedwith a loss of 5,163 million yen posted in the first three quarters of the previous fiscal year).
<Other Businesses>
The Group focused its efforts on the development of peripheral businesses and services to support smooth business
operations in mainstay businesses, such as the publication and sales of books related to medical services or long-termcare, goods management, and the breeding of therapy dogs in the long-term care business.
Net sales for the Other Businesses segment amounted to 324 million yen (compared with 340 million yen posted in
the first three quarters of the previous fiscal year). Operating income for the segment was 350 million yen (comparedwith 69 million yen posted in the first three quarters of the previous fiscal year).

(2) Details of financial position
Total assets at the end of the first three quarters under review increased 3,191 million yen from the end of theprevious fiscal year, to 179,437 million yen. The main reasons were a 90 million yen decrease in current assets,
mainly reflecting a decline in deferred tax assets, and a 3,281 million yen increase in fixed assets, primarily due to anincrease in lease assets.
Liabilities increased 4,710 million yen from the end of the previous fiscal year, to 118,630 million yen. The main
reasons were a 3,330 million yen increase in current liabilities, mainly reflecting an increase in accrued expenses, anda 1,380 million yen increase in non-current liabilities, primarily due to an increase in lease obligations.
Net assets decreased 1,519 million yen from the end of the previous fiscal year, to 60,807 million yen.

(3) Information on the future outlook, including consolidated financial results forecasts
There is no change in the consolidated financial results forecast for the year ending March 31, 2015, which was
released on November 7, 2014.

4

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

2. Summary information (notes)(1) Significant changes to subsidiaries during the term
No related information.

(2) Application of specific accounting for preparing the quarterly consolidated financial statements
No related information.

(3) Changes in accounting policies, accounting estimates, and restatement
Changes in accounting policies
Application of the accounting standard for retirement benefits
The Company has applied the “Accounting Standard for Retirement Benefits” (Accounting Standards Board of Japan(ASBJ) Statement No. 26, May 17, 2012; hereinafter “Accounting Standard for Retirement Benefits”) and the“Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012; hereinafter“Guidance on Accounting Standard for Retirement Benefits”) from the first quarter of the current fiscal year, forprovisions set forth in the main clauses of Paragraph 35 of the Accounting Standard for Retirement Benefits andParagraph 67 of the Guidance on Accounting Standard for Retirement Benefits. Accordingly, the Company reviewed
the methods for calculating retirement benefit obligations and service costs, and revised the method of attributing
estimated retirement benefit obligations to periods from the straight-line basis to the benefit formula basis, andrevised the method of determining the discount rate from the method using the remaining service period of employees
to the method using a single weighted average discount rate.
The application of this accounting standard, etc. is in accordance with the transitional accounting treatments set forthin Paragraph 37 of the Accounting Standard for Retirement Benefits, and thus the adjustments associated with thechange in calculation methods of retirement benefit obligations and service costs are recorded in retained earnings at
the beginning of the first three quarters of the current fiscal year.
The result was a decrease of 118 million yen in net defined benefit liability, and an increase of 96 million yen inretained earnings at the beginning of the first three quarters of the current fiscal year. The effect of this change on
operating income, ordinary income and income before income taxes and minority interests for the first three quartersof the current fiscal year is insignificant.

5

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheets
Fiscal 2014
(As of March 31, 2014)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Short-term investment securities
Merchandise and finished goods
Work in progress
Raw materials and supplies
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures—net
Lease assets—net
Other—net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Other
Less: Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

6(Thousand yen)Q3 of Fiscal 2015
(As of December 31, 2014)

9,595,734
32,203,271
3,501,938
623,388
15,111
310,2102,888,713
9,258,717(31,299)
58,365,785

8,526,523
33,293,422
3,198,652
566,809
128,997
255,325
1,725,214
10,605,825(25,480)
58,275,289

29,053,777
27,884,574
9,834,290
66,772,643

28,220,836
31,410,470
9,716,303
69,347,610

18,446,825
3,814,661
22,261,486

17,077,076
4,209,599
21,286,676

29,253,196(406,643)
28,846,552
117,880,682
176,246,468

30,929,315(400,965)
30,528,349
121,162,636
179,437,925

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

Fiscal 2014
(As of March 31, 2014)
Liabilities
Current liabilities
Notes and accounts payable—trade
Short-term loans payable
Income taxes payable
Accrued expenses
Provision for bonuses
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Provision for directors’ retirement benefits
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

7(Thousand yen)Q3 of Fiscal 2015
(As of December 31, 2014)

861,540
4,014,826
1,674,761
15,669,460
5,092,365
39,70028,377,442
55,730,097

960,067
5,303,512
249,832
17,987,543
2,493,661—
32,066,161
59,060,779

17,316,153
28,683,159
167,784
5,786,553
1,774,879
4,460,592
58,189,123
113,919,220

14,377,610
32,763,516
164,695
5,917,825
1,848,110
4,497,521
59,569,278
118,630,058

11,933,790
17,354,214
38,335,223(5,374,688)
62,248,540

11,933,790
17,354,214
38,371,369(7,016,838)
60,642,536

25,037

20,48458,966(332,870)(248,866)
327,574
62,327,248
176,246,468

70,118(270,765)(180,162)
345,493
60,807,867
179,437,925

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statements of income)(Nine months ended December 31)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Rent income
Subsidy income
Share of profit of entities accounted for using equity
methodOther
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of property, plant and equipment,
net
Loss on sales of property, plant and equipment, net
Loss on liquidation of subsidiaries and affiliates
Impairment loss
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes—current
Income taxes—deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

Fiscal 2014
(from April 1, 2013
to December 31, 2013)
204,208,864
162,034,181
42,174,683
37,113,428
5,061,254(Thousand yen)
Fiscal 2015
(from April 1, 2014
to December 31, 2014)
204,307,538
163,157,149
41,150,389
36,355,014
4,795,374

105,110
152,087
57,874

118,425
166,121
71,272—

9,431

190,888505,960

317,727
682,979

1,509,687
47,14059,0301,615,859
3,951,356

2,019,133
47,595
35,1172,101,846
3,376,508

1,030,370
850
1,031,220———

43,454

16,432—
77,036—22,207
142,699
4,839,877
1,506,201
1,008,031
2,514,232
2,325,644
25,2522,300,391

2,134—
33,7405,522
57,8283,318,679
1,108,440
847,901
1,956,341
1,362,338
25,4191,336,918

8

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

(Quarterly consolidated statements of comprehensive income)(Nine months ended December 31)
Fiscal 2014
(from April 1, 2013
to December 31, 2013)
2,325,644(Thousand yen)
Fiscal 2015
(from April 1, 2014
to December 31, 2014)
1,362,338

Valuation difference on available-for-sale securities(116,750)(4,553)Foreign currency translation adjustments(18,920)

11,152—

62,104(135,671)

68,7032,189,973

1,431,041

Owners of the parent

2,164,720

1,405,622

Minority interests

25,252

25,419

Income before minority interests
Other comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:9Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2015

(3) Notes to quarterly consolidated financial statements(Notes on the premise of a going concern)
No related information.
(Notes on significant fluctuations in the amount of shareholders’ equity)
No related information.

10