Consolidated Financial Statements
for the First Quarter of the Fiscal Year Ending March 31, 2009
August 11, 2008

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 statements: August 14, 2008
*Amounts under one million yen have been rounded down.

1. Consolidated Results for the First Quarter Ended June 30, 2008
(1) Consolidated business results(Percentage figures indicate the rate of change from the same period in the previous year.)
Net Sales

Operating Income

Ordinary Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Three months ended June 30, 2008

52,815

－

（881）

－

（943）

－

（943）

－

Three months ended June 30, 2007

48,624（4.8）

229（11.8）

262（14.9）

2（95.8）Net Income
per Share

Diluted Net Income
per Share
Yen

Yen

Three months ended June 30, 2008（26.78）－Three months ended June 30, 2007

0.06

－

(2) Consolidated financial position
Total Assets

Net Assets

Millions of yen

Equity Ratio

Millions of yen

Net Assets per Share%Yen

As of June 30, 2008

119,898

48,90040.7

1,383.92

As of March 31, 2008

121,864

50,60941.6

1,432.54

Reference: Shareholders’ Equity: First quarter ended June 30, 2008: ¥43,738 million, Year ended March 31, 2008: ¥50,454 million

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

First Quarter

Second Quarter

Third Quarter

Year-End

AnnualYear ended March 31, 2008

－

0.00

－

22.00

22.00

Year ended March 31, 2009

－

－

－

－

－

Year ended March 31, 2009 (Forecast)

－

11.00

－

11.00

22.00

Note: There is no change in the forecast of dividends.

3. Consolidated Financial Result Forecasts for the Year Ending March 31, 2009
（Percentage figures indicate the rate of change from the same period in the previous year.）
Net Income
Net Sales
Operating Income
Ordinary Income
Net Income
per Share
Millions ofyen%Millions ofyen%Millions ofyen%Millions of
yen

%

Yen

First sixmonths108,400

－

17

－

（138）

－

（960）

－

(27.26)

Full year

222,000

11.1

3,140

44.6

2,720

33.2

50

－

1.42

Note: There is no change in the forecast of consolidated financial results.

4. Others(1) Significant changes to subsidiaries during the term (transfers of specific subsidiaries with changes in thescope of consolidation): None
(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 on 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 thebasis of preparing the quarterly consolidated financial statements“): Yes
1) Changes due to the revision of accounting standard, etc.: Yes
2) Changes other than 1): None
Note: For details, please refer to Page 4, “4. Others” of “Qualitative Information on 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 June 30, 2008: 36,508,976 shares
As of March 31, 2008: 36,508,976 shares
2) Number of treasury stock at the end of each period
As of June 30, 2008: 1,288,985 shares
As of March 31, 2008: 1,288,636 shares
3) Average number of shares issued and outstanding in each period
First quarter ended June 30, 2008: 35,220,178 sharesFirst quarter ended June 30, 2007: 35,221,317 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) was 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 our 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.

[Qualitative information and financial statements]
1. Qualitative Information on Consolidated Business Results
As to financial results of the Nichii Group in the period under review, net sales of Health Care Business rose by
35.8% from a year earlier to 24,595 million yen thanks to contributions from facility care services. However, the Medical
Support Business saw revenues decline by 7.8% to 25,343 million yen. This drop was due to reviews continuing sincelast year of service contracts with medical institutions in order to adjust contract prices to appropriate levels. In the
Education Business, net sales slipped by 4.3% to 2,733 million yen, but sales of courses for medical office work rosefrom last year and developed largely to plan amid signs of bottoming out.
As to income, in facility care services at the Health Care Business, operating losses occurred at two successor
companies for facility care services and at Nichii Care Palace Co., Ltd. The reason was that while out of twenty facilities
in process seven have opened for business (details are shown the table below), losses resulted from expenses such as
property rents for the facilities yet to be opened as well as outlays incurred after facility openings and charges forgoodwill amortization. Incidentally, the Education Business were incurred an operating loss.
As a result of these activities, net sales during the first quarter ended June 30, 2008 were 52,815 million yen (48,624
million yen in the same period of the previous year), operating loss was 881 million yen (229 million yen operating
income in the same period of the previous year), ordinary loss was 943 million yen (262 million yen ordinary income inthe same period of the previous year) and net loss was 943 million yen (2 million yen net income in the same period of
the previous year).
Shown below is the net sales and operating income by segment.
Segment

Net Sales

Operating Income

Millions of yen%

Millions of yen%

Medical Support Business

25,343

92.2

1,791

74.5

Health Care Business

24,595

135.8

（690）

－

Education Business

2,733

95.7

（281）

－

Other Businesses

143

81.1

55

126.9

*Nichii Care Palace Co., Ltd., which in September 2007 became a 100% subsidiary of the Company, and the successor companies ofthe facility care services of COMSN, Inc. (namely, Nichii no Hohoemi, Co., Ltd.; Nichii no Kirameki, Co., Ltd.; and Nichii Home,
Co., Ltd.) close their annual accounts in December; therefore, their financial results for the quarter ended March 31, 2008 are
included.

Facilities in process of facility care services
Number of facilities in process in the three months ended June 30, 2008
(January 1, 2008-March 31, 2008)
Group home

4

1

3

Pay nursing home

14

6

8

Rental housing facilities for elderly

2

0

2

Total

20

7

13

2. Qualitative Information on Consolidated Financial Position
Total assets at the end of the first quarter under review were 119,898 million yen, having decreased by 1,386 million yen
compared with the figure at the end of the previous fiscal year, mainly because other current assets decreased by 1,460
million yen.
Liabilities increased by 322 million yen compared with the figure at the end of the previous fiscal year to 70,997
million yen, mainly because short-term borrowings increased by 3,497 million yen, although notes and accounts

payable, accrued bonuses, accrued expenses and bonds decreased.
Net assets decreased by 1,709 million yen to 48,900 million yen.

3. Qualitative Information on Consolidated Financial Result Forecasts for the Year Ending March 31, 2009
The business results were in line with forecasts generally; therefore, consolidated financial result forecasts have notchanged since May 22, 2008, the announcement date of the financial reports.
（Percentage figures indicate the rate of change from the same period in the previous year.）
Net Sales
Millions of yen

Operating Income%

Millions of yen%

Ordinary Income
Millions of yen

Net Income%

Millions of yen%

First sixmonths108,400

12.1

17(98.1)

(138)

－

(960)

－

Full year

222,000

11.1

3,140

44.6

2,720

33.2

50

－

4. Others(1) Significant changes to subsidiaries during the term (transfers of specific subsidiaries with changes in the scopeof consolidation)
There is no related information.
(2) Adoption of the simple accounting as well as specific accounting for preparing the quarterly consolidated
financial statements: Yes*Adoption of simplified method in the accounting method
Inventories at the end of the quarter under review were calculated in a reasonable manner, omitting partial
inventory taking, based on the physical inventory taking carried out at the end of the previous fiscal year.
Furthermore, write-downs on inventory carrying values were made only on inventories with clearly diminishedcommercial 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: Yes*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) wasapplied 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 quarter under review, the Company has
opted for the early adoption of the Financial Accounting Standard for Lease Transactions (Financial AccountingStandard No. 13) and the Application Guidelines for the Financial Accounting Standard for Lease Transactions(Financial Accounting Standard Application Guideline No. 16), using accounting treatment consistent with regularpurchase transactions. The impact of this change on operating income is immaterial.

Quarterly Consolidated Financial Statements(1) Consolidated balance sheet(Thousands of yen)
As of June 30, 2008ASSETS
Current assets
Cash and deposits
Notes and accounts receivable

As of March 31, 2008

Merchandise
Finished products
Half-finished products
Raw materials

3,472,864
25,912,569
371,834
46,607
23,160500

3,725,993
25,666,006
335,133
64,072
44,615
546

Products in process
Others

32,09030,3207,682,382

9,142,961

Allowance for doubtful accounts(156,089)(159,089)

Total current assets

37,385,920

38,850,562

Fixed assets
Tangible fixed assets
Buildings and structures, net
Others, net

28,076,554
8,922,621

28,514,834
8,905,793

Total tangible fixed assets

36,999,175

37,420,628

Goodwill
Others20,815,370
2,084,052

20,824,684
1,756,064

Total intangible fixed assets

22,899,422

22,580,749

OthersAllowance for doubtful accounts

23,302,515(688,986)

23,123,814(690,939)

Total investments and other assets

22,613,529

22,432,875

Total fixed assets

82,512,128

82,434,252

Total assets

119,898,048

121,284,814

Intangible fixed assets

Investments and other assets

(Thousands of yen)
As of June 30, 2008

LIABILITIESCurrent liabilities
Notes and accounts payable
Short-term loans payable
Income taxes payable
Accrued expenses
Allowance for employee
bonuses
Allowance for directors' andauditors' bonuses
OthersTotal current liabilities

As of March 31, 2008

1,019,143
3,810,000
303,225
15,707,603

1,751,233
313,000
690,768
16,199,170

1,644,133

3,019,660－

36,0009,539,003

8,998,796

32,023,109

31,008,630

878,000
28,023,906

1,480,000
28,025,416

3,477,745

3,384,767

143,293

143,208

6,451,884

6,633,527

38,974,830

39,666,919

70,997,940

70,675,550

11,933,790
17,354,214

11,933,790
17,354,214

Long-term liabilities
Bonds
Long-term loans payable
Allowance for employee
retirement benefits
Allowance for directors' andauditors' retirement benefits
OthersTotal long-term liabilities
Total liabilities
NET ASSETS
Shareholders' equity
Common stock
Capital surplus
Retained earnings

25,357,479

27,075,682

Treasury stock
Total shareholders' equity(5,936,387)(5,935,860)

48,709,097

50,427,827

32,464

26,761

32,464

26,761

158,546

154,675

Unrealized gains and adjustments
Unrealized gains on othersecurities
Total unrealized gains andadjustments
Minority interests
Total net assets

48,900,108

50,609,264

Total liabilities and net assets

119,898,048

121,284,814

(2) Consolidated statements of income(Thousands of yen)Three months ended June 30,
2008
Net sales
Cost of sales

52,815,977

Gross profit

8,637,579

Sevice, general and administrative
expenses
Operating loss
Non-operating income
Interest income
Commission on consignment for
office work
Income from lease of fixed assets
OthersTotal non-operating income
Non-operating expenses
Interest expenses
Bond interest
OthersTotal non-operating expenses
Ordinary loss
Extraordinary income
Reversal of allowance for doubtfulreceivables
Total extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Total extraordinary losses

44,178,398

9,519,480(881,901)
7,760
21,52326,93332,21688,433
124,768
13,004
12,614150,387(943,854)
2,857
2,857
2,964
2,964

Loss before income taxes(943,961)

Income, inhabitants and business taxes
Adjustments for income and other
taxes
Total income and other taxes

146,325

Minority interests
Net loss(155,289)(8,963)8,370(943,368)

Accounting Standards for Quarterly Financial Reporting (Accounting Standards No. 12) and Implementation
Guidance for Accounting Standards for Quarterly Financial Reporting (Implementation Guidance No. 14) wasapplied 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.

(Reference)
Consolidated statements of incomeof the three months ended June 30,2007(Thousands of yen)Three Months ended June 30, 2007
Ⅰ
Ⅱ
Ⅲ

Ⅳ

Net sales
Cost of sales
Gross profit
Service, general andadministrative expenses
Operating income
Non-operating income
Interest income

Dividend income
Commission on consignment
for office work
Income from lease of fixed
assetsOthersⅤ Non-operating expense
Interest expenses

48,624,839
39,781,933
8,842,905
8,613,255
229,650
63,205
5,210
5,261
21,428
8,141
23,162
30,625
4,046

Bond interest

19,875Compensation for damages

4,036

Loss on cancellation ofguarantee deposit
OthersOrdinary income
Extraordinary income
OthersExtraordinary losses
Loss on retirement of fixed
assetsExpenses for changing brandIncome before income taxes
Income and other taxes
Income and other taxes adjustment
Minority interests
Net income

698
1,969
262,229
28
22,11743,454
8,873
34,580240,931
119,395
111,637
7,800
2,098