Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010
February 9, 2010
Nichii Gakkan Company
Listed on: Tokyo Stock Exchange 1st Section
9792
URL: http://www.nichiigakkan.co.jp
Daisuke Terada, President and Representative Director
Koichi Terada, Director, Vice President of Accounting and Finance Division and General Manager of
Accounting Department
TEL: 03-3291-2121
Scheduled date of filing quarterly financial report:
February 12, 2010
Scheduled date to start dividends distribution－

Name of listed company:
Securities code:
Representative:
Contact:(Figures shown are rounded down to the nearest million yen.)

1. Consolidated financial results for the third quarter ended December 31, 2009 (April 1, 2009 – December 31, 2009)(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

176,693

10.8

4,810

－

4,844

－

2,260

－

159,422

－

(392)

－

(552)

－

(1,319)－Nine months ended
December 31, 2009
Nine months ended
December 31, 2008%

Diluted Net Income per
Share

Net Income per ShareYen
Yen
Nine months ended
32.70－
December 31, 2009
Nine months ended(37.52)－
December 31, 2008
Note: Since we have executed a 2-for-1 common share split on April 1, 2009, the figure of net income per-share for the nine months ended September 2008 did
not reflect the split.

(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, 2009

117,539

48,78541.3

703.27

As of March 31, 2009

120,491

47,87339.6

1,372.06

Reference: Shareholders’ equity:
As of December 31, 2009: 48,570 million yen
As of March 31, 2009: 47,682 million yen
Note: Since we have executed a 2-for-1 common share split on April 1, 2009, the figure of net assets per share for the year ended March 2009 did not reflect
the split.

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

First Quarter

Second Quarter

Third Quarter

Year ended March 31, 2009

－

11.00

－

Year ending March 31, 2010

－

6.00

－

Year-End

Annual

11.00

22.00

Year ending March 31, 2010
6.00
12.00
(Forecast)
Note: Change in the forecast of dividends in the current quarter of the fiscal year ending March 31, 2010: None
Note: Since we have executed a 2-for-1 common share split on April 1, 2009, the figure of dividend per share for the year ended March 2009 did not reflect the
split.

3. Consolidated financial result forecasts for the year ending March 31, 2010 (April 1, 2009 – March 31, 2010)(Percentage figures indicate the rate of change from the same period in the previous year.)

Net Sales

Full year

Operating Income

Ordinary Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

235,000

10.0

6,400

531.3

6,300

687.1

2,700

Note: Revision of the forecasts in the current quarter of the fiscal year ending March 31, 2010: Yes

1

Net Income
per Share

Net Income
%

－

Yen

39.06

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010

4. Others(1) Significant changes to subsidiaries during the term (transfers of specific subsidiaries with changes in the scope of
consolidation): None
(2) Adoption of the simplified accounting as well as specific accounting for preparing the quarterly consolidated
financial statements: Yes
Note: For details, please refer to Page 5, “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.: None
2) Changes other than 1): None
(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, 2009:

73,017,952 shares

As of March 31, 2009:

36,508,976 shares

As of March 31, 2009:

1,756,599 shares

2) Number of treasury stock at the end of each period
As of December 31, 2009:

3,955,229 shares

3) Average number of shares issued and outstanding in each period (quarterly consolidated cumulative period)
Nine months ended December 31, 2009: 69,143,318 shares

Nine months ended December 31, 2008: 35,166,243 shares

Note: Since we have executed a 2-for-1 common share split on April 1, 2009, above figures representing the number of shares issued and outstanding(including treasury stock) and the number of treasury stock as of March 31, 2009, as well as the average number of shares issued and outstanding(quarterly consolidated cumulative period) for the nine months ended December 31, 2008 did not reflect the split.

* Explanation concerning the appropriate use of estimated business results and other special notes
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 bematerially different depending on various factors.

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Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010

[Qualitative information and financial statements]
1. Qualitative Information on Consolidated Business Results
During the first nine months of the fiscal year ending March 31, 2010, the Japanese economy has gradually transitioned fromthe recession that began with the global financial crisis in 2008 into a slow recovery phase. Nevertheless, with factors likeweak employment conditions continuing with a persistently high unemployment rate, the overall situation remains difficult.
Regarding conditions with a more direct effect on the Nichii Group, shortages of physicians, nurses, and other medical
personnel and long-term care workers are a particular concern, and the securing and training of medical and long-term carepersonnel is a critical need.
Under these circumstances, however, the long-term care field saw some progress, as the government has implemented an
upward revision of 3% in compensation for long-term care workers effective in April 2009, followed by the provision ofsubsidies to further improve the said compensation starting from October in the same year. In addition, the medical field also
expects to see an upward revision of 0.19% in overall medical service fees, the first increase since 2000, which will take effecton and after April 1, 2010. As such, several public policies for ensuring manpower based on the improvement of compensation
are under way in both fields, where the potential for job-creating is significant.
Under its mid-to-long-term business strategy, the Nichii Group is working to develop and efficiently implement services
responding to various issues in the medical and long-term care fields, actively improving staff compensation and entering into
strategic capital and operational tie-ups, and restructuring health care subsidiaries so that synergies and more efficient business
operations can be pursued within the Group.
Business results saw a significant improvement in profitability based on greater capacity utilization for service centers andtraining facilities. The Education Business saw student numbers surpass the level for the same period last year, while the
Health Care Business enjoyed steady increases in users for both home-care and facility-care services.
As a result, net sales were 176,693 million yen (159,422 million yen in the same period of the previous year), operating
income was 4,810 million yen (392 million yen of operating loss in the same period of the previous year), ordinary income was
4,844 million yen (552 million yen of ordinary loss in the same period of the previous year) and net income was 2,260 million
yen (1,319 million yen of net loss in the same period of the previous year).
Business results by segment were as follows.
<Medical Support Business>
In the Medical Support Business, we continued our efforts to adjust contract terms to more reasonable conditions and to improvestaff compensation, in order to provide more efficient, higher-quality service through lower staff turnover and bring about avirtuous cycle that results in greater customer satisfaction. In addition, by moving ahead with marketing efforts aimed at gaining
new contracts, we have managed to increase the number of new contracts with hospitals and clinics and have seen both ourrevenue and profit improve beginning with the first quarter of the current fiscal year.
We have also expanded our existing medical support services and pushed ahead with development of comprehensive
medical management support services to strengthen our medical management support service offerings. Looking ahead, we
aim to develop new services, for example, by promoting the use of IT in applications like doctors' office work support services
employing voice recognition technology.
As a result, sales of this segment were 75,884 million yen (75,983 million yen in the same period of the previous year), andoperating income was 5,872 million yen (6,112 million yen in the same period of the previous year).
<Health Care Business>
In the Health Care Business, the number of users has steadily increased not only because of mergers with subsidiaries, which
added home-care service users, but also solid gains in users of our home-visit care and day care services. Efficiencies achieved
through an increase in the number of care plans per care manager and adjustments in staff assignments have led the way to
improved profitability. Our facility-care services also enjoyed increased capacity utilization for existing facilities and higher
income as a result.
To further increase the efficiency of our long-term care operations, cut indirect expenses, and realize greater synergies with
our other businesses, we reorganized the operations of our subsidiaries as of October 1. Now, all three of the former
consolidated subsidiaries (Nichii no Hohoemi Co., Ltd., Nichii no Kirameki Co., Ltd., and Nichii Kanto Co., Ltd.) and all fiveof the former non-consolidated home-care subsidiaries (Nichii Care Nagano Co., Ltd., Nichii Care Gifu Co., Ltd., Nichii Care
Aichi Co., Ltd., Nichii Care Kyoto Co., Ltd., and Nichii Care Hyogo Co., Ltd.) have been incorporated into the operations of
the parent company.
As a result of this merger, third-quarter consolidated results include three additional months of results for the facilities takenover from Nichii no Hohoemi and the other two former consolidated subsidiaries.
The number of care facilities rose to a total of 284 with the addition of a new group home opened in December. As forhome-care service offices, the 99 offices previously operated by the five non-consolidated subsidiaries in five different
prefectures (Nagano, Gifu, Aichi, Kyoto, and Hyogo) became a part of the operations of Nichii Gakkan with the Octoberreorganization.
As a result, segment sales during the period under review were 88,490 million yen (74,751 million yen in the same period of
the previous year) and operating income was 2,296 million yen (747 million yen of operating loss in the same period of theprevious year).
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Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010

<Education Business>
With the government advancing its emergency job creation project (i.e., the support program “Study and obtain a qualification
as a care worker while working at long-term care facilities”), we undertook to aid job creation in the field of long-term care byparticipating in this program under our “Education-to-Work” business model.
Enrollment for our course offerings continued to show steady growth especially for our mainstay “Medical Office Work”
and “Home Helper” training courses, which we are conducting throughout the country. Enrollment for our “Home Helper”
training course, in particular, outpaced levels for the same period last year. As part of our focus on developing and offeringcourses responding to front-line medical and long-term care needs, we are offering our “Medical Office Clerical Workers”
training course as a tailored response to personnel demand and supply conditions. Looking to the future, we are planning to
expand our course offerings to cover not only the medical and long-term care fields but also areas related to daily life.
Therefore, overall sales of the segment during the period under review were 11,866 million yen (8,196 million yen in thesame period of the previous year) and operating income amounted to 2,591 million yen (1,019 million yen of operating loss inthe same period of the previous year).
<Other Businesses>
With attention focused on our main businesses, we moved to improve the efficiency of our Group operations. To further expand
operations at Nichii Green Farm Co., Ltd. through gardening and agriculture, we prepared for the opening of “Himeharu no Sato”
in Mobara City, Chiba Prefecture and strengthened ties with our main businesses.
Overall sales of the Other Businesses during the period under review were 452 million yen (490 million yen in the same
period of the previous year) and operating income 341 million yen (272 million yen in the same period of the previous year).
2. Qualitative Information on Consolidated Financial Position
Total assets at the end of the first nine months of the current fiscal year decreased by 2,952 million yen compared with the figure
at the end of the previous fiscal year to 117,539 million yen. This is mainly because current assets increased by 2,123 million
yen due to increases in cash and deposits, notes and accounts receivable, etc., while fixed assets decreased by 5,075 million
yen due to decrease in goodwill.
Liabilities decreased by 3,863 million yen compared with the figure at the end of the previous fiscal year to 68,753 million yen.
This is mainly because current liabilities decreased by 2,884 million yen due to decrease in short-term loans payable, despite
increase in accrued expenses, etc. In addition, long-term liabilities decreased by 979 million yen due mainly to a drop in
long-term loans payable.
Net assets decreased compared with the figure at the end of the previous fiscal year by 911 million yen to 48,785 million yen.
3. Qualitative Information on Consolidated Financial Result Forecasts for the Year Ending March 31, 2010
Our consolidated financial results forecast for the year ending March 31, 2010 has been updated since the last forecast
announcement on May 19, 2009. For details, please refer to the “Notification of Revised Results Forecast” dated February 9,
2010.
Differences compared to the results forecast included in the financial report dated May 19, 2009 are given below.

Fiscal Year Ending March 31, 2010 (April 1, 2009 – March 31, 2010)
Operating
Ordinary
Net sales
incomeincomeNet income

Net income
per share(Millions of yen)

(Millions of yen)

(Millions of yen)

(Millions of yen)

(Yen)

Previous forecasts (A)236,000

5,470

5,350

2,500

35.97

Revised forecast (B)235,000

6,400

6,300

2,700

39.06

Change (B –A)(1,000)

930

950

200

－

Change (%)

(0.4)

17.0

17.8

8.0

－

213,601

1,013

800

(1,090)(31.10)(Reference) Previous
year results(Fiscal year ended
March 31, 2009)4

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010

4. Others(1) Significant changes to subsidiaries during the term (transfers of specific subsidiaries with changes in the scope 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
Method used to value inventories
In determining the value of inventory assets as of the end of the third quarter, some physical inventory counts wereomitted. Reasonable estimates based on physical inventory counts as of the end of the second quarter were used instead.
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
There is no related information.

5

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010

5. Quarterly Consolidated Financial Statements(1) Quarterly consolidated balance sheets(Thousands of yen)

As of December 31, 2009

As of March 31, 2009

AssetsCurrent assets
Cash and deposits

4,962,710

4,727,904

Notes and accounts receivable

28,346,049

25,720,516

Merchandise and finished goods

423,835

311,592

9,565

3,100

188,084

155,076

Others5,798,952

6,722,029

Allowance for doubtful accounts(72,614)(106,666)

39,656,583

37,533,553

Buildings and structures (net)26,576,407

27,033,300

Others (net)

9,729,335

9,535,703

Total tangible fixed assets

36,305,743

36,569,004

Goodwill

14,807,727

19,920,273

Others4,413,763

4,135,517

Total intangible fixed assets

19,221,491

24,055,790

Others

23,068,302

23,028,576

Allowance for doubtful accounts(712,937)(695,206)

22,355,365

22,333,369

77,882,600

82,958,164

117,539,183

120,491,717

Notes and accounts payable

934,779

803,676

Short-term loans payable

2,040,000

8,668,002

Income taxes payable

475,119

870,677

Accrued expenses

15,022,133

12,800,370

Allowance for employee bonuses

2,260,807

2,626,995

Allowance for directors’ bonuses

5,040

32,400

Others13,474,801

11,294,730

Total current liabilities

34,212,680

37,096,853

Long-term loans payable

24,670,550

26,622,366

Allowance for employee retirement benefits

4,105,634

3,704,320

Allowance for directors’ retirement benefits

147,106

142,044

Others5,617,905

5,052,291

Total long-term liabilities

34,541,196

35,521,022

68,753,877

72,617,875

Work in progress
Raw materials and supplies

Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets

Investments and other assets

Total investments and other assets
Total fixed assets
Total assets
Liabilities
Current liabilities

Long-term liabilities

Total liabilities

6

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010

(Thousands of yen)

As of December 31, 2009

As of March 31, 2009

Net assets
Shareholders’ equity
Common stock

11,933,790

11,933,790

Capital surplus

17,354,214

17,354,214

Retained earnings

26,150,621

24,820,390

Treasury stock(6,788,602)(6,436,143)

Total shareholders’ equity

48,650,024

47,672,252

Unrealized gains on other securities(79,954)

10,028

Total unrealized gains and adjustments(79,954)

10,028

Minority interests

215,236

191,560

Total net assets

48,785,306

47,873,842

117,539,183

120,491,717

Unrealized gains and adjustments

Total liabilities and net assets

7

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010(2) Quarterly consolidated statements of income(Nine months ended December 31, 2009)(Thousands of yen)

Nine months ended
December 31, 2008
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income (loss)

Nine months ended
December 31, 2009

159,422,201
131,727,027
27,695,174
28,087,822(392,648)

176,693,763
141,865,606
34,828,157
30,018,071
4,810,086

22,88365,571
184,962－－
84,176
357,594

19,09991,295－
113,038
141,101
143,248507,782

405,308
31,499－80,399517,208(552,262)

395,9103,307
42,474
31,295472,988
4,844,880

908
－
－
908

43,52869,757
16,142
129,428

15,0994,923
3,999
75,000－－99,022(650,376)
429,982
215,378645,361
23,687(1,319,425)

13,133
120,945－－
4,121,190
100,641
4,355,911
618,397555,037(2,225,772)(1,670,734)
28,1752,260,956

Non-operating income
Interest income
Commission on consignment for office work
Income from lease of fixed assets
Rent income
Compensation for damage received
OthersTotal non-operating income
Non-operating expenses
Interest expenses
Bond interest
Rent expenses
OthersTotal non-operating expenses
Ordinary income (loss)
Extraordinary income
Gain on sales of fixed assets
Gain on prior periods bad debts recovered
OthersTotal extraordinary income
Extraordinary losses
Loss on retirement of fixed assets
Loss on sales of investment securities
Loss on valuation of stocks of subsidiaries and affiliates
Provision of allowance for doubtful accounts
Adjustment for amortization of goodwill
OthersTotal extraordinary losses
Net income (loss) before income taxes and minority interests
Income taxes
Income taxes–deferred
Total income and other taxes
Minority interests income of consolidated subsidiaries
Net income (loss)

8

Nichii Gakkan Company (9792) Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending March 31, 2010

(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.

9