Consolidated Financial Results
for the Third Quarter of the Fiscal Year Ending March 31, 2009
February 10, 2009

Nichii Gakkan Company
Listed on:
Tokyo Stock Exchange 1st Section
Code number:
9792
URL: http://www.nichiigakkan.co.jp
Representative:
Takashi Mori, President and Representative Director
Contact:
Koichi Terada, Director, Vice President of Accounting Division and General Manager of Accounting Department
Telephone:
03-3291-2121
Filing date of quarterly financial report:
Scheduled for February 13, 2009
(Amounts under one million yen have been rounded down.)

1. Consolidated Results for the Third Quarter Ended December 31, 2008
(1) Consolidated business results (cumulative)(Percentage figures indicate the rate of change from the same period in the previous year.)

Net Sales
Nine months ended
December 31, 2008
Nine months ended
December 31, 2007

Operating Income

Ordinary Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

159,422

－

(392)

－

(552)

－

(1,319)－147,323

(3.8)

1,796

(14.1)

1,931(10.6)

276(69.3)Net Income per Share

Diluted Net Income
per Share

Yen

Nine months ended
December 31, 2008
Nine months ended
December 31, 2007

Yen

(37.52)

－

7.86

－

(2) Consolidated financial position
Total Assets

Net Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

As of December 31, 2008

120,374

47,63139.4

1,365.58

As of March 31, 2008

121,284

50,60941.6

1,432.54

Reference: Equity Capital: Third quarter ended December 31, 2008: ¥47,457 million, Year ended March 31, 2008: ¥50,454 million

2. Dividends
Dividend per Share (Yen)(Record date)

First Quarter

Second Quarter

Year ended March 31, 2008

－

0.00

－

Year ending March 31, 2009

－

11.00

－

Year ending March 31, 2009
(Forecast)－－Third Quarter－

Note: Change in the forecast of dividends in the third quarter of the fiscal year ending March 31, 2009: No-1-

Year-End

Annual

22.00
－

22.00
－

11.00

22.00

Nichii Gakkan Company (9792) Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2009

3. Consolidated Financial Result Forecasts for the Year Ending March 31, 2009
(Percentage figures indicate the rate of change from the previous year.)

Net Sales
Full year

Operating Income

Ordinary Income

Net Income
per Share

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

215,000

7.6

1,000

(53.9)

580(71.6)(720)－(20.44)

Note: Revision of the forecasts in the third quarter of the fiscal year ending March 31, 2009: No

4. Others(1) Significant changes to subsidiaries during the term (transfers of specific subsidiaries with changes in thescope of consolidation): No(2) Adoption of the simple accounting as well as specific accounting for preparing the quarterly consolidated
financial statements: Yes
Note: For details, please refer to Page 4, “4. Others” of “Qualitative information and financial statements.”(3) Changes in accounting policies, procedures and methods of presentation for preparing the quarterly
consolidated financial statements (changes described in the section of “Changes in significant matters forming
the basis of preparing the quarterly consolidated financial statements“)
1) Changes due to the revision of accounting standard, etc.: Yes
2) Changes other than 1): No
Note: For details, please refer to Page 4, “4. Others” of “Qualitative information and financial statements.”(4) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding at the end of each period (including treasury stock)
As of December 31, 2008:

36,508,976 shares

As of March 31, 2008:

36,508,976 shares

1,755,995 shares As of March 31, 2008:

1,288,636 shares

2) Number of treasury stock at the end of each period
As of December 31, 2008:

3) Average number of shares issued and outstanding in each period
Third quarter ended December 31, 2008:

35,166,243 shares Third quarter ended December 31, 2007:

35,220,844 shares* Explanation concerning the appropriate use of estimated business results and other special notes(Accounting Standards for Quarterly Financial Reporting)(1) Accounting Standards for Quarterly Financial Reporting (Accounting Standards No. 12) and Implementation
Guidance for Accounting Standards for Quarterly Financial Reporting (Implementation Guidance No. 14) were applied
starting this fiscal year, and quarterly financial reports were created in accordance with Quarterly Financial Reporting
Regulations.
(2) The future prospects of the business results, etc., described in this material is based on information that the company
has acquired as of the announcement date of financial report, and there is a possibility that actual business results, etc.,
will be materially different depending on various factors.

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Nichii Gakkan Company (9792) Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2009

[Qualitative information and financial statements]
1. Qualitative Information on Consolidated Business Results
Through the third quarter of the current fiscal year (April 1, 2008 - December 31, 2008), the business environment
surrounding the nursing care field has dramatically changed. Affected by the increase in long-term care payments of 3%(1.7% for home care and 1.3% for facility care), which is expected to come into effect in April 2009, and by the rapid
deterioration in the economy, the long-term care industry is drawing attention as a job-generating industry, and various
measures are being examined by public bodies such as job training, support for gaining certification, and efforts to retain
employees.
In this environment, Nichii Group has worked on medium and long-term strategies for business growth byconcentrating its efforts on rebuilding its earning power, enhancing its platform for service provision, and reinforcing its
capabilities in human resources supply.
Earnings were negatively affected by various reasons including a decline in the number of contracted medical
institutions following standardization of contracts and upfront expenses for the facility care business. However,profitability, particularly in the facility care business and Education Business, is improving as a result of several
developments such as an increase in the utilization rate at nursing care facilities that were opened in the first half andgrowth in the number of students taking core courses in the Education Business.
As a result of these activities, net sales during the nine months ended December 31, 2008 were 159,422 million yen(147,323 million yen in the same period of previous year), operating loss was 392 million yen (1,796 million yen ofoperating income in the same period of the previous year), ordinary loss was 552 million yen (1,931 million yen of
ordinary income in the same period of the previous year) and net loss was 1,319 million yen (276 million yen of net
income in the same period of the previous year).
<Medical Support Business>
In the Medical Support Business, based on a medium and long-term perspective, we worked to update contract termswith medical institutions outsourcing to the company, in order to stabilize the market for medical service provision going
forward and with a view to maximizing the income level per medical institution.
Through the third quarter, the number of contracted medical institutions temporarily declined following revisions tocontracts, which impacted income. However, we made efforts to strengthen the foundation for future growth, centered on
our capabilities in human resource supply by improving the skills of staff at contracted medical institutions and helping
graduates of the medical office work course find jobs.
Progress was also made in strengthening the organization and expanding the range of services with the goal of fullylaunching sales support service. In November, the Consulting Business Department was established at headquarters.
As a result, net sales of the Medical Support Business were 75,983 million yen (82,327 million yen in the same
period of previous year), and operating income was 6,112 million yen (7,741 million yen in the same period of previousyear).
<Health Care Business>
As for the Health Care Business, conditions of home care services had been difficult since revisions were made to thelong-term care insurance system in 2006. Since July however, the earnings were on a recovery track, which was evident
by year-on-year growth in the number of care plans created and number of users of our services for every month.
The profitability of facility care services is improving as the benefits of efforts to strengthen sales through the effective
use of our branch office network appeared and the number of residents at facilities increased.
In October, the homemaker service, which covers all housework such as cleaning, was introduced throughout Japan,
and services were expanded to the daily life support field.
As a result, net sales of the Health Care Business were 74,751 million yen (56,560 million yen in the same period ofprevious year), and operating loss was 747 million yen (442 million yen of operating income in the same period of theprevious year).
Since Nichii Care Palace Co., Ltd., which became a 100% subsidiary of the company in September 2007, and thesuccessor companies of the facility-care services of COMSN, Inc. (namely, Nichii no Hohoemi Co., Ltd.; Nichii no
Kirameki Co., Ltd.; and Nichii Home Co., Ltd., and Nichii Kanto Inc.) close their annual accounts in December, theirfinancial results for the nine months ended September 30, 2008, are included.
<Education Business>
In the Education Business, we worked on expanding core courses, as well as developing and providing courses that meetthe needs of medical and long-term care fields. In October, we started the “medical doctor’s clerk” course to train
medical office assistants who help with the office work of doctors at hospitals, in response to the revision of medical
service fees in April which added assignment of such assistants as an evaluation standard.
As for sales promotion activities, we conducted trial course fairs throughout Japan and continued to develop efficient
advertising that create greater responses.
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Nichii Gakkan Company (9792) Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2009

The number of students taking the home helper level 2 course and the medical office work course, both of which are
our core courses, were firm, and sales for the Education Business rose year-on-year for the first time in five quarters.
As a result, net sales were 8,196 million yen (7,833 million yen in the same period of previous year), and operating
loss was 1,019 million yen (1,192 million yen of operating loss in the same period of the previous year).
<Other Businesses>
With regard to the business initiatives of Other Business in information processing, storage and delivery service, andproduction and sales of flowers, ornamental plants, seeds and seedlings, we have been working on implementing
efficient services.
Net sales for the Other Businesses were 490 million yen (601 million yen in the same period of previous year), andoperating income was 272 million yen (185 million yen in the same period of previous year).

2. Qualitative Information on Consolidated Financial Position
Total assets at the end of the third quarter under review decreased by 910 million yen compared with the figure at the endof the previous fiscal year to 120,374 million yen. This is mainly because other current assets and buildings andstructures decreased by 1,256 million, and 1,058 million yen, respectively, although other intangible fixed assets
increased by 1,704 million yen.
Liabilities increased by 2,067 million yen compared with the figure at the end of the previous fiscal year to 72,742
million yen. This is mainly because short-term borrowings increased by 5,477 million yen, whereas allowance for
employee bonuses and bonds decreased by 1,515 million, and 1,480 million yen, respectively.
Net assets decreased compared with the figure at the end of the previous fiscal year by 2,977 million yen to 47,631
million yen.
3. Qualitative Information on Consolidated Financial Result Forecasts for the Year Ending March 31, 2009
Our outlook for the performance in the year ending March 31, 2009 is 215,000 million yen for net sales, 1,000 million
yen for operating income, 580 million yen for ordinary income and 720 million yen in net loss, as announced on
November 11, 2008.
4. Others(1) Significant changes to subsidiaries during the term (transfers of specific subsidiaries with changes in thescope of consolidation)
There is no related information.
(2) Adoption of the simplified accounting as well as specific accounting for preparing the quarterly consolidated
financial statements*Adoption of simplified method in the accounting method
Write-downs on inventory carrying values were made only on inventories with clearly diminished commercial
value based on the estimated net disposal value.
(3) Changes in accounting policies, procedures and methods of presentation for preparing the quarterly
consolidated financial statements*Changes in matters regarding Accounting Standards
1. Accounting Standards for Quarterly Financial Reporting (Accounting Standards No. 12) and Implementation
Guidance for Accounting Standards for Quarterly Financial Reporting (Implementation Guidance No. 14) wereapplied starting this fiscal year, and quarterly financial reports were created in accordance with Quarterly Financial
Reporting Regulations.
2. With regard to finance leases without ownership transfer, the company has historically applied accounting
treatment consistent with that for rental transactions. Beginning with the first quarter of the fiscal year under review,the company has opted for the early adoption of the Financial Accounting Standard for Lease Transactions(Financial Accounting Standard No. 13) and the Application Guidelines for the Financial Accounting Standard forLease Transactions (Financial Accounting Standard Application Guideline No. 16), using accounting treatment
consistent with regular purchase transactions.
The impact of this change on income and losses is immaterial.

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Nichii Gakkan Company (9792) Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2009

Quarterly Consolidated Financial Statements(1) Consolidated balance sheet(Thousands of yen)
As of December 31, 2008

As of March 31, 2008ASSETS
Current assets
Cash and deposits

4,223,732

3,725,993

Notes and accounts receivable

25,206,665

25,666,006

326,136

335,133

Merchandise
Finished products

66,40364,072

Half-finished products

28,97044,615

Raw materials
Products in process
Others377

546

16,48330,3207,886,437

9,142,961

Allowance for doubtful accounts(139,250)(159,089)

Total current assets

37,615,956

38,850,562

Buildings and structures, net

27,456,797

28,514,834

Others, net

9,220,560

8,905,793

Total tangible fixed assets

36,677,358

37,420,628

20,218,638

20,824,684

Fixed assets
Tangible fixed assets

Intangible fixed assets
Goodwill
Others3,460,547

1,756,064

Total intangible fixed assets

23,679,186

22,580,749

23,180,249

23,123,814

Investments and other assets
OthersAllowance for doubtful accounts(778,102)(690,939)

Total investments and other assets

22,402,146

22,432,875

Total fixed assets
Total assets-5-82,758,692

82,434,252

120,374,648

121,284,814

Nichii Gakkan Company (9792) Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2009

(Thousands of yen)
As of December 31, 2008

As of March 31, 2008

LIABILITIESCurrent liabilities
Notes and accounts payable

762,567

Short-term loans payable

5,790,000

313,000

Income taxes payable

509,562

690,768

Accrued expenses

16,224,444

16,199,170

Allowance for employee bonuses

1,504,567

3,019,660

Allowance for directors’ and auditors’ bonuses

1,751,233

10,54036,000

Others9,291,599

8,998,796

Total current liabilities

34,093,281

31,008,630

Long-term liabilities－

1,480,000

Long-term loans payable

28,025,531

28,025,416

Allowance for employee retirement benefits
Allowance for directors’ and auditors’ retirement
benefits
Others3,695,633

3,384,767

140,778

143,208

6,787,732

6,633,527

Bonds

Total long-term liabilities
Total liabilities

38,649,675

39,666,919

72,742,956

70,675,550

NET ASSETS
Shareholders’ equity
Common stock

11,933,790

11,933,790

Capital surplus

17,354,214

17,354,214

Retained earnings

24,591,692

27,075,682

Treasury stock(6,435,472)(5,935,860)

Total shareholders’ equity

47,444,224

50,427,827

Unrealized gains and adjustments
Unrealized gains on other securities

13,604

26,761

Total unrealized gains and adjustments

13,604

26,761

173,863

154,675

Minority interests
Total net assets

47,631,692

50,609,264

Total liabilities and net assets

120,374,648

121,284,814-6-

Nichii Gakkan Company (9792) Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2009

(2) Consolidated statements of income[Third quarter of the fiscal year ending March 31, 2009 (cumulative)](Thousands of yen)
Nine months ended
December 31, 2008
Net sales

159,422,201

Cost of sales

131,727,027

Gross profit

27,695,174

Selling, general and administrative expenses

28,087,822

Operating loss

(392,648)

Non-operating income
Interest income

22,883

Commission on consignment for office work

65,571

Income from lease of fixed assets

184,962

Others84,176

Total non-operating income

357,594

Non-operating expenses
Interest expenses

405,308

Bond interest

31,499Others80,399Total non-operating expenses

517,208

Ordinary loss

(552,262)

Extraordinary income
Gain on sales of fixed assets

908

Total extraordinary income

908

Extraordinary losses
Loss on retirement of fixed assets

15,099Loss on valuation of investment securities

4,923

Loss on valuation of stocks of affiliates

3,999

Provision for allowance for doubtful accounts

75,000Total extraordinary losses

99,022

Loss before income taxes(650,376)

Income, inhabitants and business taxes

429,982

Adjustments for income and other taxes

215,378

Total income and other taxes

645,361

Minority interests

23,687Net loss(1,319,425)

Accounting Standards for Quarterly Financial Reporting (Accounting Standards No. 12) and Implementation
Guidance for Accounting Standards for Quarterly Financial Reporting (Implementation Guidance No. 14) wereapplied starting this fiscal year, and quarterly financial reports were created in accordance with Quarterly Financial
Reporting Regulations.

(3) Notes on premise of a going concern
There is no related information.

(4) Notes on significant fluctuation in amounts of shareholders’ equity
There is no related information.

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Nichii Gakkan Company (9792) Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2009

(Reference)
Consolidated statements of income of the nine months ended December 31, 2007
(Thousands of yen)
Nine months ended
December 31, 2007
Category

Ratio to net
sales (%)

AmountⅠ Net sales

147,323,129

100.0

Ⅱ Cost of sales

118,192,599

80.2

Gross profit
Ⅲ Selling, general and administrative expenses

Operating income

29,130,530

19.8

27,333,534

18.6

1,796,996

1.2

340,827

0.2

Ⅳ Non-operating income

1. Interest income

129,372

2. Dividend income

5,730

3. Commission on consignment for office work

66,571

4. Income from lease of fixed assets

21,803

5. Interest on refund of income taxes and others

30,2306. Income from lease of facilities

37,3407. Others

49,778Ⅴ Non-operating expenses

1. Interest expenses

100,928

2. Bond interest

57,2093. Compensation for damages

7,805

4. Loss on cancellation of guarantee deposit

33,583

5. Others

6,421

205,9480.1

1,931,874

1.3

111,247

0.1

561,360

0.4

1,481,761

1.0

1,181,319

0.8

Minority interests

23,4710.0

Net income

276,970

0.2

Ordinary income
Ⅵ Extraordinary income

1. Gain on sale of fixed assets

489

2. Gain on sale of investment securities

21,0003. Gain on sale of stocks of affiliates

20,999

4. Reversal of allowance for doubtful accounts

68,758Ⅶ Extraordinary losses

1. Loss on retirement of fixed assets

41,5102. Loss on revaluation of inventories

216,258

3. Cost for the settlement

180,000

4. Expenses for changing brands

123,591

Income before income taxes
Income, inhabitants and business taxes

378,020

Adjustments for income and other taxes

803,298-8-