Consolidated Financial Results
for the Second Quarter of the Fiscal Year Ending March 31, 2009
November 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 report: Scheduled for November 14, 2008
Payment of dividends:
Scheduled for December 11, 2008
(Amounts under one million yen have been rounded down.)

1. Consolidated Results for the Second Quarter Ended September 30, 2008
(1) Consolidated business results (Cumulative)(Percentage figures indicate the rate of change from the same period in the previous year.)

Net Sales
Six months ended
September 30, 2008
Six months ended
September 30, 2007

Operating Income

Ordinary Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

105,958－（1,181）－（1,313）－（1,539）－96,701(5.4)

880(33.7)

966(29.6)

13(97.2)Net Income
per Share

Diluted Net Income
per Share
Yen

Six months ended
September 30, 2008
Six months ended
September 30, 2007

Yen

（43.72）

－

0.39

－

(2) Consolidated financial position
Total Assets

Net Assets

Millions of yen

Equity Ratio

Millions of yen

Net Assets per Share%Yen

As of September 30, 2008

121,315

48,30639.7

1,366.88

As of March 31, 2008

121,284

50,60941.6

1,432.54

Reference: Equity Capital: Second quarter ended September 30, 2008: ¥48,140 million, Year ended March 31, 2008: ¥50,454 million

2. Dividends
Dividend 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

－

11.00

－

－

－

Year ended March 31, 2009
(Forecast)

－

－

－

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 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 second quarter of the fiscal year ending March 31, 2009: Yes

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: No
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 thebasis 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 September 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 September 30, 2008: 1,289,662 shares
As of March 31, 2008: 1,288,636 shares
3) Average number of shares issued and outstanding in each period
Second quarter ended September 30, 2008: 35,219,862 shares
Second quarter ended September 30, 2007: 35,221,022 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.

[Qualitative information and financial statements]
1. Qualitative Information on Consolidated Business Results
The Japanese economy during the six months from April 1 to September 30, 2008 was mired in deepening uncertainty
over the global financial system in the wake of the US sub-prime loan problem. Followed by falling capital expenditure
due to deteriorating corporate profits and stagnating personal consumption in the face of high prices for crude oil andgrains, business sentiment has shifted from a sense of deceleration to strengthening signs of recession.
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.
As to operating results, sales posted the first overall increase in three years as facility-care service revenues in the
Health Care Business contributed.
With regard to earnings, Health Care Business recorded a loss for the period mainly due to forward-looking
investments in the facility-care service business, although the home-care service business has been recovering from thesevere conditions that followed the revision of the long-term care insurance system.
In the Medical Support Business, earnings fell compared with a year earlier. This is mainly due to efforts to update
contract terms with medical institutions, with a decline in the number of medical institutions under contract.
As a result of these activities, net sales during the six months ended September 30, 2008 increased 9.6% over the same
period of the previous year to 105,958 million yen, operating loss was 1,181 million yen (880 million yen of operating
income in the same period of the previous year), ordinary loss was 1,313 million yen (966 million yen of ordinary
income in the same period of the previous year) and net loss was 1,539 million yen (13 million yen of net income in thesame 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.
Efforts to update contract terms connected in the period under review to a temporary decline in the number of medical
institutions under contract and impacted earnings for the period. Nonetheless, we will ensure an appropriate income level,
enhance employee compensation, increase the staff retention ratio, provide high-quality services, and promote measures
to enhance customer satisfaction.
To upgrade and expand services, the group has worked to create a product-mix consistent with customer needs, which
includes the development and sales launch of “Medical Receipt Diagnosis 2.0”as an application for medical offices
combining analysis of medical service fee statements and marketing services.
As a result, net sales of the Medical Support Business decreased by 7.7% over the same period of the previous year
to 50,723 million yen, and operating income decreased by 27.0% to 3,736 million yen.

<Health Care Business>
In the Health Care Business, contributions from facility-care service connected to strong revenue growth compared withthe same period of last year. Operating starts of the facility-care service facilities assumed by the group occurred largely
as planned (nineteen facilities opened in the six-month period under review). However, although contributions torevenues and earnings are expected to gain full momentum beginning in the next fiscal year, the financial result for theperiod under review has been unfavorable due to start-up costs such as staff expenses and goodwill amortization charges.
In home-care services, where severe conditions continued since the revision of the long-term care insurance system in
2006, signs of recovery have emerged including rising monthly user numbers compared with a year earlier since July.
As a result, net sales of the Health Care Business increased by 37.7% over the same period of the previous year to49,516 million yen, and operating loss was 833 million yen (441 million yen of operating income in the same period of
the previous 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 six months ended June 30, 2008, are included.

<Education Business>
In the Education Business, steps were taken to strengthen course contents and course offerings and to enhance
convenience. Courses for medical office work (a key offering in the course program) were upgraded and expanded instep with the revision of medical service fees in 2008. In order to improve course participants’ customer satisfaction,
Manabi Net Plus was made available to all course participants from April, and a new Practical Dietary Education course
has started in June.
With respect to sales promotion activities, we continued with advertising campaigns focused on response ratios andefficiency and took steps to provide information on trends in regulations and job opportunities related to medical andlong-term care services by hosting field-specific course information and job consultation meetings.
Thanks to these efforts, sales of courses for medical office work during the period under review increased comparedwith the year earlier, and second-quarter sales of home helper courses also rose compared with last year, reflecting a
recovery trend. As a result, net sale decreased by 1.0% over the same period of the previous year to 5,346 million yen,and operating loss was 887 million yen (820 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, the group has been working on implementing
efficient services.
Net sales for the Other Businesses decreased by 7.3% over the same period of the previous year to 371 million yen,and operating income increased by 454.7% to 119 million yen.

2. Qualitative Information on Consolidated Financial Position
Total assets at the end of the second quarter under review increased by 30 million yen compared with the figure at theend of the previous fiscal year to 121,315 million yen. This is mainly because cash and deposits, and other intangible
fixed assets increased by 695 million, and 895 million yen, respectively, although other current assets and tangible fixed
assets decreased by 1,010 million, and 415 million yen, respectively.
Liabilities increased by 2,333 million yen compared with the figure at the end of the previous fiscal year to 73,008
million yen. This is mainly because short-term borrowings increased by 5,357 million yen, whereas notes and accounts
payable, accrued expenses, and bonds decreased by 815 million, 1,098 million, and 1,480 million yen, respectively.
Net assets decreased compared with the figure at the end of the previous fiscal year by 2,302 million yen to 48,306
million yen.

3. Qualitative Information on Consolidated Financial Result Forecasts for the Year Ending March 31, 2009
In the medical and long-term care service fields, a serious lack of medical doctors and care workers becomes a social
problem. As a countermeasure, revisions of relevant laws and regulations are under way which include remuneration for
deploying clerical support staff for medical doctors and enhanced conditions for care workers. As for the revision to care
worker compensation for implementation in April 2009, the supplemental economic stimulus package announced in
October provides for a 3.0 percent increase, the first raise since the introduction of the long-term care insurance system.
Going forward, remuneration arrangements by type of service and region will be indicated in stages.
Nichii Group will strengthen the coordination with its group companies and between individual operations andservices, engage in developing products and services consistent with regulatory trends and customer needs, and further
increase the predominance of the Nichii Group.
In the Medical Support Business, the group will work to optimize its revenue and income structure by updating
contracts with customers, and with a view to secure human resources take steps to upgrade career enhancement schemes
and training schemes. During the second quarter under review, efforts to update contracts with an ensuing drop in thenumber of medical institutions under contract have led to lower revenues and earnings; however, profit margins are
expected to improve beginning in the third quarter.
The Health Care Business has been seeing paced but steady growth in the number of home-care service users,
associated with expectations of enhanced operating rates for facility-care centers. However, due to forward-looking
investments for facility-care services, financial results will likely be unfavorable. The group’s solid relations withmedical institutions and marketing efforts through the branch network to promote facility-care services have started
bearing fruit. Going forward, by pursuing synergies among individual services, we will offer solutions differentiatedfurther still consistent with user needs.
In the Education Business, through a communications strategy which in an effective manner combines field-specificadvertising campaigns and various information events at the individual branch level, efforts will be made to grow thegroup’s business volume and to strengthen staff supply capabilities to the medical and long-term care fields.
With the continued weak employment environment, courses for qualifications will be placed under public attention,
raising expectations that going forward the business environment will turn around.
In the development of courses, we will promote its offerings with a view to addressing new needs including staff
supply consistent with regulatory trends. For example, a Course for Medical Office Clerical Workers which started in
November enables acquiring skills equivalent to the “medical doctors’ clerical support staff” provided under the revisionof medical service fees implemented in April 2008 to support medical doctors in clerical tasks.
With regard to the Other Business, we will continue to work on business initiatives using group internal management
resources, and promote group strategies through an optimized organizational structure.

In consideration of these environments and prospects, our outlook for the performance in the year ending March 31,
2009 is 215,000 million yen for net sales (an increase by 7.6% over the previous fiscal year), 1,000 million yen for
operating income (a decrease by 53.9% year on year), 580 million yen for ordinary income (a decrease by 71.6% year onyear) and 720 million yen in net loss (net loss of 834 million yen for the current fiscal year).
Full-year earnings estimates announced on May 22, 2008, for the fiscal year ending March 2009 have been revised as
described in the “Revision Notice concerning Earnings Estimates ”released today on November 11, 2008.

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 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: 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 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.

Quarterly Consolidated Financial Statements(1) Consolidated balance sheet(Thousands of yen)
As of September 30, 2008

As of March 31, 2008ASSETS
Current assets
Cash and deposits
Notes and accounts receivable
Merchandise
Finished products
Half-finished products
Raw materials
Products in process

4,421,047
25,921,377
295,138
65,61323,160498

3,725,993
25,666,006
335,133
64,072
44,615546

32,14730,320

Others8,132,927

9,142,961

Allowance for doubtful accounts(140,049)(159,089)

Total current assets

38,751,860

38,850,562

Buildings and structures, net
Others, net

27,929,471
9,075,742

28,514,834
8,905,793

Total tangible fixed assets

37,005,213

37,420,628

Goodwill
Others

20,517,004
2,651,615

20,824,684
1,756,064

Total intangible fixed assets

23,168,619

22,580,749

OthersAllowance for doubtful accounts

23,159,448(769,572)

23,123,814(690,939)

Total investments and other assets

Fixed assets
Tangible fixed assets

Intangible fixed assets

Investments and other assets

22,389,875

22,432,875

Total fixed assets

82,563,709

82,434,252

Total assets

121,315,569

121,284,814

(Thousands of yen)
As of September 30, 2008

As of March 31, 2008

LIABILITIESCurrent liabilities
Notes and accounts payable

935,412

1,751,233

Short-term loans payable

5,670,000

313,000

Income taxes payable
Accrued expenses
Allowance for employee
bonuses
Allowance for directors’ andauditors’ bonuses
OthersTotal current liabilities

569,635

690,768

15,100,726

16,199,170

3,120,094

3,019,660

24,10036,0009,203,595

8,998,796

34,623,564

31,008,630-

1,480,000

Long-term loans payable
Allowance for employee
retirement benefits
Allowance for directors’ andauditors’ retirement benefits
Others28,024,591

28,025,416

3,578,820

3,384,767

138,585

143,208

6,643,027

6,633,527

Total long-term liabilities

38,385,024

39,666,919

73,008,589

70,675,550

11,933,790

11,933,790

Long-term liabilities
Bonds

Total liabilities
NET ASSETS
Shareholders’ equity
Common stock
Capital surplus

17,354,214

17,354,214

Retained earnings

24,760,761

27,075,682

Treasury stock(5,936,896)(5,935,860)

Total shareholders’ equity

48,111,869

50,427,827

28,70826,761

28,70826,761

166,401

154,675

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

48,306,980

50,609,264

Total liabilities and net assets

121,315,569

121,284,814

(2) Consolidated statements of income(Thousands of yen)Six months ended
September 30, 2008
Net sales

105,958,315

Cost of sales

88,049,542

Gross profit

17,908,772

Selling, general and administrative expenses

19,090,561

Operating loss

(1,181,788)

Non-operating income
Interest income

15,930Commission on consignment for office work

42,952

Income from lease of fixed assets

100,661

Others49,433

Total non-operating income

208,977

Non-operating expenses
Interest expenses

262,984

Bond interest

23,310

Others54,647

Total non-operating expenses

340,942

Ordinary loss

(1,313,754)

Extraordinary income
Reversal of allowance for doubtful accounts

12,264

Total extraordinary income

12,264Extraordinary losses
Loss on retirement of fixed assets

10,435

Loss on revaluation of stocks of affiliates

3,999

Provision for allowance for doubtful accounts

75,000Total extraordinary losses

89,435

Loss before income taxes(1,390,924)

Income, inhabitants and business taxes

266,927

Adjustments for income and other taxes(134,435)

Total income and other taxes

132,492

Minority interests
Net loss

16,225(1,539,642)

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 six months ended September 30, 2007
(Thousands of yen)Six months ended
September 30, 2007
Category
I

Ratio to net
sales (%)

AmountNet sales

96,701,923

100.0

II Cost of sales

78,699,549

81.4

Gross profit
III Selling, general and administrative
expenses
Operating income

18,002,373

18.6

17,121,801

17.7

880,5720.9

194,4270.2

108,6960.1

966,303

1.0

62,8660.1

456,307

0.5

572,8620.6

542,150

0.6

IV Non-operating income
1. Interest income

39,383

2. Dividend income
3. Commission on consignment for
office work
4. Income from lease of fixed assets
5. Interest on refund of income taxes
and others
6. Income from lease of facilities

5,292

7. Others

43,714
18,33730,21023,16634,323

V Non-operating expenses
1. Interest expenses

24,810

2. Bond interest

39,128

3. Compensation for damages
4. Loss on cancellation ofguarantee deposit
5. Others

5,943
34,607
4,207

Ordinary income
VI Extraordinary income
1. Gain on sale of fixed assets
2. Reversal of allowance for
doubtful accounts
VII Extraordinary losses

489
62,377

1. Loss on retirement of fixed assets
2. Loss on revaluation of
inventories
3. Cost for the settlement

216,258

4. Expenses for changing brands

34,580

Income before income taxes
Income, inhabitants and business
taxes
Adjustments for income and othertaxes
Minority interests
Net income

25,468180,000

242,451
299,698

16,9860.0

13,7250.0