Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011 (J-GAAP)
February 9, 2011
Name of listed company: Nichii Gakkan Company
Listed on: Tokyo Stock Exchange 1st Section
Securities code: 9792
URL: http://www.nichiigakkan.co.jp
Representative: Daisuke Terada, President and Representative Director
Contact:
Koichi Terada, Director, Manager of Accounting and Finance Division
TEL: 03-3291-2121
Scheduled date of filing quarterly financial report:
February 10, 2011
Scheduled date to start dividends distribution―
Supplementary quarterly materials prepared: Yes
Quarterly results information meeting held: None
(Figures shown are rounded down to the nearest million yen.)

1. Consolidated financial results for the third quarter ended December 31, 2010 (April 1, 2010 – December 31, 2010)(1) Consolidated operating results(Percentage figures represent changes 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%

180,643

2.2

6,187

28.6

6,856

41.5

2,794

23.6

176,693

10.8

4,810

―

4,844

―

2,260

―

Nine months ended
December 31, 2010
Nine months ended
December 31, 2009

Diluted Net Income
per Share

Net Income per Share
Yen

Nine months ended
December 31, 2010
Nine months ended
December 31, 2009

Yen

40.47

—

32.70

—

(2) Consolidated financial position
Total Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

122,435

51,58041.9743.29119,081

49,72841.6

716.81

As of December 31, 2010
As of March 31, 2010
Reference: Shareholders’ equity:

Net Assets

As of December 31, 2010: 51,333 million yen

As of March 31, 2010: 49,504 million yen

2. Dividends
Annual Dividends (Yen)First Quarter

Second Quarter

Third Quarter

—
—

6.00
7.00

—
—

Year ended March 31, 2010
Year ending March 31, 2011

Year-EndYear ending March 31, 2011
(Forecast)

Annual

6.00

12.00

7.00

14.00

Note: Revisions to the above forecast of dividends in the current quarter under review: None

3. Consolidated financial result forecasts for the year ending March 31, 2011 (April 1, 2010 – March 31, 2011)(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

240,000

2.0

8,000

16.5

8,300

20.7

3,500

10.9

50.68

Note: Revisions to the above forecast of dividends in the current quarter under review: None4. Others (For more details, refer to “2. Others” of the appendix materials on page 4.)(1) Significant changes to subsidiaries during the term: None
Note: This refers to transfers of specific subsidiaries with changes in the scope of consolidation during the quarter.

(2) Application of the simplified accounting as well as specific accounting: Yes
Note: This refers to application of the simplified accounting as well as specific accounting for preparing the quarterly consolidated financial statements.

(3) Changes in accounting policies, procedures and methods of presentation
1) Changes due to the revision of accounting standard, etc.: Yes
2) Changes other than 1): None
Note: This refers to changes in accounting policies, procedures and methods of presentation for preparing the quarterly consolidated financial statements
described in the section of “Changes in significant matters forming the basis of preparing the quarterly consolidated financial statements.”(4) Number of shares issued and outstanding (common stock)1) Number of shares issued andoutstanding (including treasury stock)2) Number of treasury stock3) Average number of shares issued andoutstanding in each period (quarterly
consolidated cumulative period)

As of December 31,
2010:
As of December 31,
2010:
Nine months ended
December 31,
2010:

As of March 31,
2010:
As of March 31,
3,956,227 shares
2010:
Nine months ended
69,062,224 shares December 31,
2009:
73,017,952 shares

73,017,952 shares
3,955,469 shares

69,143,318 shares* Presentation of implementation status for quarterly review procedure
The quarterly review procedure based on the Financial Instruments and Exchange Act does not apply to the quarterly
consolidated financial results and the procedure based on this Act was not complete as of the release of these Consolidated
Financial Results.
* Explanation concerning the appropriate use of financial forecasts and other special notes(Forward looking statements)
The above forecasts are based on information Nichii Gakkan had in its possession as of the time this report was prepared andon certain assumptions judged to be reasonable. Various factors may cause actual results to differ significantly fromforecasts. Please refer to the disclaimers, provided under “Qualitative information on consolidated financial result forecasts”
on page 3 of the quarterly consolidated financial results (appendix materials), regarding assumptions upon which forecasts
are based and the use of forecasts.

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011

Contents of the appendix materials
1. Qualitative information on quarterly consolidated financial results ...............................................................................2(1) Qualitative information on consolidated operating results .........................................................................................2(2) Qualitative information on consolidated financial position ........................................................................................3(3) Qualitative information on consolidated financial result forecasts.............................................................................3
2. Others..............................................................................................................................................................................4(1) Overview of significant changes to subsidiaries.........................................................................................................4(2) Overview of the simplified accounting as well as specific accounting.......................................................................4(3) Overview of changes in accounting policies, procedures and methods of presentation .............................................4
3. Quarterly consolidated financial statements ...................................................................................................................5(1) Quarterly consolidated balance sheets ........................................................................................................................5(2) Quarterly consolidated statements of income .............................................................................................................7(3) Notes on premise of a going concern..........................................................................................................................8(4) Notes on significant fluctuation in amounts of shareholders’ equity ..........................................................................8-1-

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011

1. Qualitative information on quarterly consolidated financial results(1) Qualitative information on consolidated operating results
During the first nine months ended December 31, 2010, the Japanese economy saw corporate earnings improve in some
sectors, but, amid ongoing difficult employment conditions, its future remains highly unpredictable.
Regarding business conditions for the Nichii Group, the October 26, 2010 cabinet approval of the supplemental budget
included an allocation of 1,123,900 million yen for improving child care, medical, long-term care, and social welfare. The
budget also included funds for securing human resources for the field of nursing care for elderly. The field of social
security, therefore, is expected to remain an area of growth characterized by high demand and employment creation.
Meanwhile, in the lead up to the long-term care insurance system revision slated for April 2012, discussions regarding
two key topics – the realization of comprehensive regional systems that would provide organic and integrated medical,
nursing care, preventive health care, residential, and household support services, and the building of a sustainable long-termcare system aimed at balancing the burden for and receipt of those services. Looking ahead, attention is being focused on
discussions of integrated reforms covering both long-term care and the tax system, which are expected to begin in earnest.
Against that backdrop, the Nichii Group continued to focus on improving compensation as a means to secure humanresources for medical and nursing care services. In addition, we worked on the development of care worker training courses
applying Nichii’s e-learning educational program Web College and the provision of services aimed at helping nurses findjobs. At the same time, we pushed ahead with the construction of a system for providing comprehensive services spanning
medical (nursing) and nursing care needs to enhance our service offerings, taking advantage of all our management
resources, and to further promote synergies among our main businesses.
As for operating results, steady increases in users of our Health Care Business’ home-visit care, day care, and other inhome care services, and a strong response to our Education Business’ “Study and obtain a qualification as a care worker
while working at long-term care facilities” program, contributed to an increase of non-operating revenue.
As a result, net sales were 180,643 million yen (176,693 million yen in the same period of the previous year), operating
income was 6,187 million yen (4,810 million yen in the same period of the previous year), ordinary income was 6,856
million yen (4,844 million yen in the same period of the previous year) and net income was 2,794 million yen (2,260
million yen in the same period of the previous year).
Operating results by segment were as follows.
Beginning with the current fiscal year, we have partially revised the standard for the allocation of expenses among
segments.
<Medical Support Business>
In our Medical Support Business, higher net sales per hospital resulting from ongoing progress in contract revisions and asteady increase in the number of hospitals (mainly private) under contract kept net sales on an upward trend. Profit,
however, fell compared to the same period a year ago due to factors like higher health insurance rates and theimplementation of compensation improvements. That said, however, there are signs that initiatives like our efforts toprovide more services to medical institutions already under contract and assign personnel more efficiently are beginning to
pay off.
We began offering our "cyber clerk" medical administration services in some areas in October and are focusing on
promotion of these services as a way to not only lighten the administrative burden of physicians but also help secure more
physicians by improving working environments.
As a result, sales of this segment during the first nine months ended December 31, 2010, were 77,113 million yen(75,884 million yen in the same period of the previous year), and operating income was 4,910 million yen (5,872 million
yen in the same period of the previous year).
<Health Care Business>
The Health Care Business remained on a growth track on the strength of steady increases in users of our home-visit care,day care, and other in-home care services and steady increases in users of our facility-care services. The latter includes theimpact of new care facility openings.
During the third quarter under review, we opened 14 new home-visit care service facilities, 6 new day care service
facilities, and 13 new in-home care support facilities in our in-home care service operations. In our facility-care service
operations, we added 4 new group homes (Nichii no Hohoemi) and 1 new pay nursing home (Nichii no Kirameki), bringing
the overall total to 295.
Moving forward, we will continue to add new facilities tailored to local needs to address the shortage of careinfrastructure and expand the Nichii Group’s nursing care service network.

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Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011

As a result, segment sales during the first nine months ended December 31, 2010, were 92,931 million yen (88,490
million yen in the same period of the previous year) and operating income was 5,125 million yen (2,296 million yen in thesame period of the previous year).
<Education Business>
In the Education Business, enrollment figures for the mainstay Home Helper Level 2 Course and Medical Office Work
Course offerings continued to fall relative to last year, which benefited from a sudden rise in demand for professional
qualifications in response to a change in employment conditions. Nevertheless, with local governments promoting the“Study and obtain a qualification as a care worker while working at long-term care facilities” programs and strong
enrollment figures for job training programs covered by subsidies to address shortages of medical and long-term carepersonnel, overall enrollment figures remained at high levels.
With regard to the Web College, we are advancing strategies aimed at building a stronger business foundation byfocusing on the development of new courses to expand the range of population segments enrolling and actively pursuing
event sponsorship and other PR initiatives in various locations.
Therefore, sales of the segment during the first nine months ended December 31, 2010, were 10,159 million yen (11,866
million yen in the same period of the previous year) and operating income amounted to 1,573 million yen (2,591 million
yen in the same period of the previous year).
<Other Businesses>
In our Other Businesses segment, we are undertaking new initiatives to improve operational efficiency and promote
additional synergies for the Group.
In the lead up to the grand opening of Lakewoods Garden Himeharu no Sato in the first half of April 2011, we aremoving ahead with the preparation of operational infrastructure and focusing on the development of an animal (dog)therapy program to supplement the physical care provided in our Health Care Business with mental health care services
focusing on emotional healing.
Sales of the Other Businesses during the first nine months ended December 31, 2010, were 439 million yen (452 million
yen in the same period of the previous year) and operating income was 45 million yen (341 million yen in the same periodof the previous year).
(2) Qualitative information on consolidated financial position
Total assets at the end of the third quarter of the current fiscal year increased by 3,353 million yen compared with the figure
at the end of the previous fiscal year to 122,435 million yen. This is mainly because current assets increased by 919 million
yen due to an increase in notes and accounts receivable, etc., while fixed assets increased by 2,434 million yen due toincreases in tangible fixed assets, etc.
Total liabilities increased by 1,501 million yen compared with the figure at the end of the previous fiscal year to 70,854
million yen. This is mainly because current liabilities increased by 2,436 million yen due to increase in accrued expenses,
etc.
Total net assets increased compared with the figure at the end of the previous fiscal year by 1,852 million yen to 51,580
million yen.
(3) Qualitative information on consolidated financial result forecasts
Our consolidated financial result forecasts for the year ending March 31, 2011 has not been changed since the previous
forecast announcement on May 17, 2010.

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Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011

2. Others(1) Overview of significant changes to subsidiaries
There is no related information.
(2) Overview of the simplified accounting as well as specific accounting* Simplified accounting method
Method used to value inventories
With respect to the calculation of inventory levels at the end of the third quarter of the current fiscal year, physicalinventory is partially omitted and the method of calculation is based on a rational method on the foundation of levels ofphysical inventory at the end of the second quarter of the current fiscal year.
Write-downs on inventory carrying values were made only on inventories with clearly diminished commercial value
based on the estimated net disposal value.
(3) Overview of changes in accounting policies, procedures and methods of presentation
Effective from the first quarter of the current fiscal year, Nichii Gakkan has applied the “Accounting Standards for Asset
Retirement Obligations” (ASBJ Statement No.18 issued on March 31, 2008) and the “Guidance on Accounting Standards
for Asset Retirement Obligations” (ASBJ Guidance No. 21 issued on March 31, 2008).
As a result of this application, operating income and ordinary income declined by 61 million yen each, and income
before income taxes and minority interests decreased by 565 million yen for the first nine months of the current fiscal year.
The amount change of asset retirement obligations due to the application of the accounting standards was 1,196 million yen.

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Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheets(Thousands of yen)

As of December 31, 2010

As of March 31, 2010

Cash and deposits

3,792,307

4,128,264

Notes and accounts receivable

30,065,198

28,554,508

Merchandise and finished goods

392,333

341,091

4,680

2,356

200,833

204,690

7,655,100

7,971,467(60,650)(72,066)

42,049,803

41,130,312

Buildings and structures (net)26,900,447

26,163,653

Others (net)

12,233,991

11,045,267

Total tangible fixed assets

39,134,438

37,208,921

Goodwill

13,806,097

14,530,389

Others5,430,739

4,500,173

Total intangible fixed assets

19,236,837

19,030,562

22,755,684

22,430,040

Allowance for doubtful accounts(741,751)(718,751)

Total investments and other assets

22,013,932

21,711,288

80,385,207

77,950,773

122,435,011

119,081,085

Notes and accounts payable

995,518

940,792

Short-term loans payable

340,000

1,018,002

AssetsCurrent assets

Work in process
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets

Investments and other assets
OthersTotal fixed assets
Total assets
Liabilities
Current liabilities

Income taxes payable

1,314,402

2,350,522

Other accrued expenses

16,382,170

13,906,413

Allowance for employees’ bonuses

2,245,724

4,199,857－

34,000

Others15,652,407

12,044,256

Total current liabilities

36,930,223

34,493,845

Long-term loans payable

20,246,988

24,002,119

Allowance for employees’ retirement benefits

4,457,328

4,133,049

Allowance for directors’ retirement benefits

155,833

149,221

Asset retirement obligations

1,218,822－

Others7,845,281

6,574,526

Total long-term liabilities

33,924,253

34,858,917

70,854,476

69,352,763

Allowance for directors’ bonuses

Long-term liabilities

Total liabilities-5-

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011
(Thousands of yen)

As of December 31, 2010

As of March 31, 2010

Common stock

11,933,790

11,933,790

Capital surplus

17,354,214

17,354,214

Retained earnings

28,809,368

26,912,370

Treasury stock(6,789,269)(6,788,705)

Total shareholders’ equity

51,308,103

49,411,670

Unrealized gains on other securities

24,94392,759Total unrealized gains and adjustments

24,94392,759Minority interests

247,488

223,893

Total net assets

51,580,535

49,728,322

122,435,011

119,081,085

Net assets
Shareholders’ equity

Unrealized gains and adjustments

Total liabilities and net assets-6-Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011(2) Quarterly consolidated statements of income(Nine months ended December 31, 2010)(Thousands of yen)

Nine months ended
December 31, 2009

Nine months ended
December 31, 2010

Net sales

176,693,763

180,643,444

Cost of sales

141,865,606

144,484,659

Gross profit

34,828,157

36,158,785

Selling, general and administrative expenses

30,018,071

29,970,822

Operating income

4,810,086

6,187,962

Interest income

19,09983,735

Commission on consignment for office work

91,29586,828Rent income

113,038

165,180

Compensation for damage received

141,101－－

522,468

Others143,248

323,100

Total non-operating income

507,782

1,181,313

395,910436,041

Bond interest

3,307

－

Rent expenses

42,47438,858Others31,29538,030Total non-operating expenses

472,988

512,930

4,844,880

6,856,345

43,528

210－

111,148

Gain on prior periods bad debts recovered

69,757－

Gain on sales of investment securities

16,142

5,119

Total extraordinary income

129,428

116,478

Loss on retirement of fixed assets

13,13338,441

Loss on sales of investment securities

120,945－

Adjustment for amortization of goodwill

4,121,190－－

504,813

100,641

132,779

4,355,911

676,033

Income before income taxes and minority interests

618,397

6,296,790

Income taxes

555,037

2,239,207

Income taxes–deferred(2,225,772)

1,234,680

Total income and other taxes(1,670,734)

3,473,888－

2,822,902

28,17528,0942,260,956

2,794,807

Non-operating income

Commission on consignment for job creation businesses

Non-operating expenses
Interest expenses

Ordinary income
Extraordinary income
Gain on sales of fixed assets
Reversal of allowance for employees’ bonuses

Extraordinary losses

Loss on adjustment for changes of accounting standards
for asset retirement obligations
OthersTotal extraordinary losses

Income before minority interests
Minority interests in income
Net income-7-Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2011

(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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