Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013(J-GAAP)
August 7, 2012
Name of listed company: Nichii Gakkan Company
Listed on: Tokyo Stock Exchange 1st Section
Securities code:
9792
URL: http://www.nichiigakkan.co.jp
Representative:
Masatoshi Saito, 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:
August 10, 2012
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 first quarter year ended June 30, 2012 (April 1, 2012 - June 30, 2012)(1) Consolidated operating results(Percentage figures represent changes from the previous year.)

Net Sales

Operating Income

Ordinary Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

65,644

7.4

1,863(16.3)

1,673(26.5)

613(40.9)

61,132

2.8

2,225

29.3

2,277

24.2

1,038

98.3

Three months ended
June 30, 2012
Three months ended
June 30, 2011

(Note) Comprehensive income: Three months ended June 30, 2012: ¥492 million (-54.6%); Three months ended June 30, 2011: ¥1,084 million (131.3%)

Net Income
per Share
Three months ended
June 30, 2012
Three months ended
June 30, 2011

Diluted Net Income
per Share
Yen

Yen

8.83

―

15.04

―

(2) Consolidated financial position
Total Assets

Equity Ratio

Millions of yen

Millions of yen%

158,051

57,37436.1

157,816

57,442Three months ended
June 30, 2012
As of March 31, 2012
Reference: Shareholders’ equity:

Net Assets

As of June 30, 2012: 57,097 million yen

36.2
As of March 31, 2012: 57,166 million yen

2. Dividends
1Q-endCash Dividends per Share
3Q-end2Q-endYear-end

Annual

Yen

Yen

Yen

Yen

Yen

―
―

8.00

―

8.00

16.00

Year ending March 31, 2013
9.00
(forecast)(Note) Revision since the most recently announced dividend forecast: None

―

9.00

18.00

Year ended March 31, 2012
Year ending March 31, 2013

3. Forecast of consolidated financial results for the year ending March 31, 2013 (April 1, 2012 - March 31, 2013)(Percentage figures represent changes from previous year for full year figures and from same period of previous year for interim period figures.)

Net SalesFirst six months
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

134,300
274,000

8.9
6.5

4,000
11,400(18.4)(2.3)

3,600
11,000(25.9)(13.2)

1,600
5,800

(27.6)
(1.6)

23.04
83.52

(Note) Revision since the most recently announced financial result forecast: None1

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

* Notes(1) Significant changes in subsidiaries during the term (Changes in specified subsidiaries resulting in changes in scopeof consolidation): None
(2) Application of the specific accounting for preparing the quarterly consolidated financial statement: None
(3) Changes in accounting policies, changes in accounting estimates, restatements
1) Changes in accounting policies due to revisions of accounting standards, etc: None
2) Changes in accounting policies due to reasons other than those stated in 1): Yes
3) Changes in accounting estimates: Yes
4) Restatements: None
(Note) These changes are relevant to “Changes in significant matters forming the basis of preparing the quarterly consolidated financial
statements (Section 5 of Article 10).” For more details, please refer to “2. Summary (Notes) information, (3) Changes in accounting
policies, accounting estimates and restatement” on page 4.

(4) Number of shares outstanding (common stock)1) Number of shares issued andoutstanding (including treasury stock)

As of June 30, 2012:

73,017,952 shares As of March 31, 2012:

73,017,952 shares

2) Number of treasury stock

As of June 30, 2012:

3,574,541 shares As of March 31, 2012:

3,574,673 shares

3) Average number of shares issued andoutstanding in each period(quarterly consolidated cumulative
period)Three months ended
June 30, 2012:

69,443,261 shares

Three months ended
June 30, 2011:

69,061,526 shares* 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 in its possession as of the time this report was prepared and on certain
assumptions judged to be reasonable. Various factors may cause actual results to differ significantly from forecasts. Please refer to thedisclaimers, provided under “Qualitative information on consolidated financial result forecasts” on page 4 of the quarterly consolidated
financial results (appendix materials), regarding assumptions upon which forecasts are based and the use of forecasts.

2

Table of Contents for the Attached Document
1. Qualitative information on quarterly financial results·················································································· 2(1) Qualitative information on consolidated business results················································································2(2) Qualitative information on consolidated financial position·············································································3(3) Qualitative information on consolidated financial result forecasts ································································4

2. Summary (Notes) information ························································································································· 4(1) Significant changes to subsidiaries during the period······················································································4(2) Application of the specific accounting for preparing the quarterly consolidated financial statements ·····4(3) Changes in accounting policies, accounting estimates and restatement ························································4

3. Quarterly consolidated financial statements ·································································································· 5(1) Quarterly consolidated balance sheets···············································································································5(2) Quarterly consolidated statements of income and comprehensive income ···················································7(Quarterly consolidated statements of income) ······························································································7(Quarterly consolidated statements of comprehensive income)····································································8(3) Notes on premise of a going concern ··················································································································8(4) Notes on significant fluctuation in amounts of shareholders’ equity······························································81

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

1. Qualitative information on quarterly financial results(1) Qualitative information on consolidated business results
The social security service in which the Nichii Gakkan Group operates is undergoing moves toward a comprehensive
reform of social security and tax, with the dual aims of rebuilding a sustainable social security system and strengthening thecountry’s fiscal health. With the revisions to the long-term care insurance system and to compensation for medical service
fees and for long-term care workers both carried out in April 2012, and legislation for a comprehensive reform of social
security and tax, which includes a phased increase in the consumption tax rate, passed by the House of Representatives inJune 2012, the relevant legal framework is taking shape.
The government’s “The Strategy for Rebirth of Japan” proposes a growth strategy to address globalization and thecountry’s declining birthrate and aging population, by deregulating the medical, long-term care, and health fields to create
new markets and expand employment across generations.
Against this backdrop, the Nichii Group launched a medium-term management strategy in April 2012 to address thesedrastic environmental changes and achieve stable, long-term profit growth. Under this strategy, we have been promoting the
expansion of our business areas and reinforcement of our business base, to increase growth, stability, and profitability at allof our businesses.
During the first three months ended June 30, 2012, we strove to expand our business scope by making initial preparations
for support services for international medical exchanges at the Medical Support Business, expanding services not coveredby the long-term care insurance system at the Health Care Business, and strengthening the development of our language
education at the Education Business. In particular, we view language education as essential to the Nichii Group’s strategy.
In addition to achieving stable growth for the Education Business, we used language education to address theinternationalization of medical institutions, and develop English conversation lessons for children at the child care business.
Accordingly, we launched the new COCO Juku brand in April 2012 and aggressively opened schools across Japan, andcarried out promotional activities through television commercials and advertising on public transportation, to establish anationwide base for our language school business.
To reinforce our operating base, in addition to the strengthening of existing businesses by aggressively opening long-termcare facilities, realigning our marketing structure and restructuring our Health Care Business, and beginning Grouprealignment for personnel services, as we have worked to build an optimal organization for the execution of our strategy.
In terms of business results, the Medical Support Business and Health Care Business each recorded year-on-year sales
and profit growth on increases in the number of users of their services and from further improvements in operational
efficiency. At the Education Business, although GABA Corporation continued to show solid results, a decline in enrollment
at existing courses and strategic investment for COCO Juku led to sales growth, but with a decline in profit.
As a result, consolidated net sales during the first three months ended June 30, 2012 totaled 65,644 million yen(compared with 61,132 million yen in the same period of the previous year), with operating income of 1,863 million yen(2,225 million yen), ordinary income of 1,673 million yen (2,277 million yen), and net income of 613 million yen (1,038
million yen).
Results by business segment are as follows:<Medical Support Business>
The Medical Support Business is in the final year of its contract revision strategy launched as a five-year plan, andcontinuously expanded its scope of operations at one medical institution, while at the same time worked to acquire newcontracts, primarily at private hospitals. In terms of strengthening the human resource base under the contract revision
strategy, continued efforts were made to improve staff compensation, increase staff retention and skill levels, enhance
operational efficiency, and deliver higher customer satisfaction, and the continuation of this favorable cycle resulted in acontinued trend of profit growth.
Efforts to expand management support services included supporting closer cooperation between medical care andlong-term care services, and making initial preparations for support service for international medical exchanges, as we
strove to expand our fields of operations by pursuing synergies across the Group and between businesses to provide
comprehensive support to institution management.
As a result, the segment sales during the first three months ended June 30, 2012 totaled 25,870 million yen (comparedwith 25,694 million yen in the same period of the previous fiscal year), with operating income of 2,086 million yen (1,962
million yen).

2

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

<Health Care Business>
The Health Care Business further expanded its network of long-term care facilities and worked to increase the utilization ofexisting facilities, which led to increases in the number of users for both home-care and facility-care services. Services notcovered by long-term care insurance also maintained a stable growth track on continued strength in the number of users of
welfare services for persons with disabilities.
The effect of the revisions to long-term care compensation carried out in April 2012 was held to a minimum bypromoting efficient facility management, and through even closer cooperation between medical care and long-term care
operations, we strengthened our development of home-visit care services, as we strove to enhance our total long-term careservices in line with user needs.
Our business development in China included the conclusion of a basic agreement for a capital tie-up between Riyi Fuli
Qiju Maoyi (Shanghai) Co., Ltd., which was set up in April 2012 as a subsidiary of Nichii Carenet Company, our groupwholesaler of long-term care products and welfare equipment, and Toyota Tsusho Corporation. We intend to further
strengthen our operating base by offering higher value-added welfare equipment wholesaling services in China.
During the first three months ended June 30, 2012, the home-care services facilities opened nine new care plan facilities(bringing the total to 746), 13 new home-visit care facilities (1,075; including home-visit bathing facilities), five new
day-care facilities (331), and 16 new home-nursing facilities (39). In the area of facility-care services, we opened one new
Nichii no Hohoemi facilities (bringing the total to 242) and four new Nichii no Kirameki facilities (47).
As a result, segment sales for the first three months ended June 30, 2012 totaled 34,599 million yen (32,329 million yen
in the same period of the previous fiscal year), with operating income of 2,638 million yen (2,090 million yen).
<Education Business>
In the Education Business, as the employment environment showed a gradual improvement, demand for accreditation
continued to decline, and as a result enrollment at the Education Business’s mainstay Home Helper Level 2 Course andMedical Administration Course decreased.
With the language education business expected to grow going forward, we are aggressively rolling out the new COCO
Juku brand to meet diverse language education needs and maximize the Group’s strengths. We are striving to provide a
unique, proprietary curriculum that includes group lessons for businesspeople, primarily using a two-instructor system, andEnglish lessons tailored for medical staff.
During the first three months ended June 30, 2012, we opened 29 language schools across Japan and began full-scale
promotional activities from June to raise awareness of COCO Juku, including television commercials, advertising on public
transportation, and trial lessons, and also carried out strategic investment to attract students.
Solid results continued at GABA on increased enrollments.
As a result, segment sales for the first three months ended June 30, 2012 totaled 5,083 million yen (3,026 million yen in
the same period of the previous fiscal year), with an 827 million yen operating loss (a 309 million yen profit in the same
period of the previous year).
<Other Businesses>
In Other Businesses, centering on Lakewoods Garden Himeharu no Sato, in Mobara City, Chiba Prefecture, we strove toincrease awareness and promote our therapeutic dogs.
As a result, segment sales for the first three months ended June 30, 2012 totaled 91 million yen (82 million yen in thesame period of the previous fiscal year), with a 33 million yen operating profit (a 144 million yen loss in the same period of
the previous year).

(2) Qualitative information on consolidated financial position
Total assets at the end of the first three months ended June 30, 2012 increased by 235 million yen from the end of theprevious fiscal year, to 158,051 million yen. The main factor behind this growth was a 2,980 million yen increase in fixed
assets from growth in tangible fixed assets, which was partially offset by a 2,744 million yen decrease in current assets froma decline in cash and deposits.
Liabilities increased by 303 million yen from the previous fiscal year-end, to 100,677 million yen. Despite a 231 million
yen decrease in current liabilities that included a decrease in income taxes payable, an increase in lease liabilities led to a
534 million yen increase in long-term liabilities.
Net assets decreased by 67 million yen from the previous fiscal year-end, to 57,374 million yen.

3

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

(3) Qualitative information on consolidated financial result forecasts
There is no change in the consolidated financial result forecast for the year ending March 31, 2013 which was released on
May 15, 2012.

2. Summary (Notes) information(1) Significant changes to subsidiaries during the period
There is no related information.

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

(3) Changes in accounting policies, accounting estimates and restatement
Changes in accounting policies(Change in depreciation method for tangible fixed assets)
Previously, for depreciation of tangible fixed assets, the Nichii Group (the Company and its consolidated subsidiaries)
applied the declining balance method, which has been changed to the straight line method from the first three months ended
June 30, 2012.
Taking into consideration the Group’s further global business development going forward, a review of the investment
effect of tangible fixed assets from the perspective of integrating Group accounting policies and properly adjusting periodic
income determined that the straight line method represented an allocation of expenses that conformed more closely to theactual use of these assets.
The effect of this change was to increase consolidated first-quarter operating income, ordinary income, and net income
before income taxes and minority interests for the first three months ended June 30, 2012, by 90 million yen respectively.

4

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

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

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Securities
Merchandise and finished goods
Work in progress
Raw materials and supplies
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets
Buildings and structures
Lease assets (net)Others (net)Total tangible fixed assets
Intangible fixed assets
Goodwill
OthersTotal intangible fixed assets
Investments and other assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

5

FY2011(As of March 31, 2012)

FY2012(As of June 30, 2012)

8,699,654
31,802,791
1,599,880
599,236
5,810
333,724
11,099,077(38,293)
54,101,880

6,683,374
31,802,367
1,599,658
663,226
44,072
312,218
10,340,777(88,693)
51,357,003

26,996,379
15,540,953
9,632,708
52,170,041

27,388,061
17,305,131
10,508,417
55,201,609

21,918,063
4,900,437
26,818,501

21,406,825
4,657,610
26,064,436

25,733,630(1,007,711)
24,725,918
103,714,460
157,816,341

26,427,670(998,802)
25,428,868
106,694,914
158,051,917

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

(Thousands of yen)

Liabilities
Current liabilities
Notes and accounts payable
Short-term loans payable
Income taxes payable
Other accrued expenses
Allowance for employee bonuses
Allowance for directors’ bonuses
Other provision
OthersTotal current liabilities
Long-term liabilities
Long-term loans payable
Lease liabilities
Allowance for employee retirement benefits
Allowance for directors’ retirement benefits
Asset retirement obligations
OthersTotal long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

6

FY2011(As of March 31, 2012)

FY2012(As of June 30, 2012)

957,132
193,091
3,274,561
16,178,955
4,775,256
36,50042,34523,451,659
48,909,502

1,023,568
2,932,049
488,506
16,851,217
2,548,185
22,00037,877
24,775,008
48,678,413

24,990,175
15,833,977
4,719,843
162,923
1,542,245
4,215,370
51,464,536
100,374,038

23,703,198
17,570,484
4,810,183
161,774
1,579,453
4,173,963
51,999,057
100,677,470

11,933,790
17,354,214
34,057,020(6,133,715)
57,211,311

11,933,790
17,354,214
34,114,542(6,133,364)
57,269,182(45,042)－(45,042)
276,034
57,442,302
157,816,341(146,981)(24,871)(171,853)
277,11757,374,447
158,051,917

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statements of income)(Three months ended June 30)(Thousands of yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Rent income
Commission on consignment for job creation businesses
Subsidy income
OthersTotal non-operating income
Non-operating expenses
Interest expenses
Rent expenses
OthersTotal non-operating expenses
Ordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on sales of fixed assets
Loss on valuation of investment securities
Loss on disaster
OthersTotal extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes–deferred
Total income and other taxes
Income before minority interests
Minority interests in income
Net income (loss)

7

FY2011FY2012(from April 1, 2011
to June 30, 2011)(from April 1, 2012
to June 30, 2012)

61,132,509
48,660,507
12,472,002
10,246,307
2,225,694

65,644,980
51,787,727
13,857,252
11,994,164
1,863,088

32,38958,49536,552
79,256
66,546273,240

30,86852,38571,751
60,98770,264286,259

196,874
14,152
10,797
221,824
2,277,110

398,384
12,58264,970475,937
1,673,410

3,640
－
－
39,649－43,2892,233,821
98,156
1,091,219
1,189,376
1,044,445
5,983
1,038,462

3,225
555
199,980－
67,820271,581
1,401,828
341,040
441,858
782,898
618,929
5,583
613,346

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Fiscal Year Ending March 31, 2013

(Quarterly consolidated statements of comprehensive income)(Three months ended June 30)(Thousands of yen)
FY2011(from April 1, 2011
to June 30, 2011)

FY2012(from April 1, 2012
to June 30, 2012)

1,044,445

618,929

39,959－39,9591,084,405(101,938)(24,871)(126,810)
492,119

1,078,421
5,983

486,535
5,583

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests(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.

8