Financial Results for the First Quarter of the Year Ending March 31, 2014 (J-GAAP)
August 7, 2013
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 for filing the quarterly financial report: August 13, 2013
Scheduled date to start dividends distribution:—
Supplementary quarterly materials prepared:
Yes
Quarterly results information meeting held:
Yes (for institutional investors and financial analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated financial results for the first quarter ended June 30, 2013 (April 1, 2013 – June 30, 2013)(1) Consolidated operating results(Percentage figures represent changes from the previous year.)
Net Sales
Operating Income
Ordinary Income
Net Income
Million yen

Three months ended
June 30, 2013
Three months ended
June 30, 2012
(Note) Comprehensive income:%Million yen%

Million yen%

Million yen%

68,161

3.8

1,727

(7.3)

1,367

(18.3)

1,047

70.8

65,644

7.4

1,863(16.3)

1,673(26.5)

613(40.9)

Three months ended June 30, 2013: 915 million yen (86.0%);
Three months ended June 30, 2012: 492 million yen (-54.6%)

Net Income per Share

Diluted Net Income per ShareYen

Three months ended
June 30, 2013
Three months ended
June 30, 2012

Yen

14.99

—

8.83

—

(2) Consolidated financial position
Total Assets

Net Assets
Million yen

As of June 30, 2013
As of March 31, 2013
Reference: Shareholders’ equity:

Equity Ratio
Million yen

162,818
166,619%

61,54961,25537.6
36.6

As of June 30, 2013: 61,239 million yen; As of March 31, 2013: 60,952 million yen

2. Dividends
1Q-endYen

Year ended March 31, 2013
Year ending March 31, 2014
Year ending March 31, 2014
(forecast)

Annual dividends
3Q-end2Q-end——Yen

Year-end

Yen

Annual
Yen

Yen

9.00

—

9.00

18.00

10.00

—

10.00

20.00

(Note) Revisions to most recently announced dividend forecast: No

3. Forecast of consolidated financial results for the year ending March 31, 2014 (April 1, 2013 – March 31, 2014)(Percentage figures represent changes from previous year for full year figures and from same period of previous year for interim period figures.)

Net Sales

Operating Income

Million yen

First six months
Full year

137,400
277,600

%

4.0
3.9

Million yen

3,600
9,000

Ordinary Income
%

(7.8)
3.0

(Note) Revisions to most recently announced financial results forecast: No

Million yen

3,200
8,000

Net Income
per Share

Net Income
%

(8.4)
(3.9)

Million yen

2,100
4,500

%

46.6
2.7

Yen

30.05
64.39

* Notes(1) Significant changes in subsidiaries during the term (Changes in specified subsidiaries resulting in changes in scope of
consolidation): None
(2) Application of specific accounting for preparing the quarterly consolidated financial statements: None
(3) Changes in accounting policies, changes of accounting estimates and restatement
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): None
3) Changes in accounting estimates: None
4) Restatement: None
(4) Number of shares outstanding (common stock)1) Number of shares issued and outstanding (including treasury stock)
As of June 30, 2013:
73,017,952
As of March 31, 2013:
73,017,952
2) Number of treasury stock
As of June 30, 2013:
3,132,043
As of March 31, 2013:
3,131,669
3) Average number of shares issued and outstanding in each period (quarterly consolidated cumulative period)
As of June 30, 2013:
69,886,123
As of June 30, 2012:
69,443,261* 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 as of the time this report was prepared and on certain assumptions judged tobe reasonable. Various factors may cause actual results to differ significantly from forecasts. Please refer to the disclaimers, provided under“(3) Information on the future outlook, including consolidated financial results forecasts” of “1. Qualitative information on quarterly
financial results” on page 5 of the quarterly consolidated financial results (attached document), regarding the assumptions upon which
forecasts are based and the use of forecasts.

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

{ Table of Contents for the Attached Document
1. Qualitative information on quarterly financial results·························································································· 2(1) Details of business results ······························································································································· 2(2) Details of financial position ···························································································································· 5(3) Information on the future outlook, including consolidated financial results forecasts······································ 5
2. Summary information (notes)······························································································································ 5(1) Significant changes to subsidiaries during the term························································································· 5(2) Application of specific accounting for preparing the quarterly consolidated financial statements···················· 5(3) Changes in accounting policies, accounting estimates and restatement ··························································· 5
3. Quarterly consolidated financial statements ········································································································ 6(1) Quarterly consolidated balance sheets············································································································· 6(2) Quarterly consolidated statements of income and comprehensive income······················································· 8
Quarterly consolidated statements of income
Three months ended June 30 ························································································································ 8
Quarterly consolidated statements of comprehensive income
Three months ended June 30 ························································································································ 9(3) Notes to quarterly consolidated financial statements ····················································································· 10
Notes on the premise of a going concern······································································································· 10
Notes on significant fluctuation in the amount of shareholders’ equity·························································· 10

1Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

1. Qualitative information on quarterly financial results(1) Details of business results
During the first three months ended June 30, 2013, the Japanese government presented its growth strategies in stages,
and the Cabinet headed by Prime Minister Shinzo Abe approved the Japan Revitalization Strategy, which consists ofthree action plans—namely, the Industry Revitalization Plan, the Strategic Market Creation Plan, and the Strategy of
Global Outreach.
The goal of the Japan Revitalization Strategy is to develop high-value-added service industries in social security
fields, which the Nichii Gakkan Company (hereinafter the “Company”) is closely affiliated with, by carrying out
regulatory and institutional reforms and making the most of its financial resources and business know-how in theprivate sector. In addition, the Japan Revitalization Strategy is promoting women’s social participation and stronger
programs for training personnel capable of competing globally as measures to boost the country’s growth potential by
maximizing its human resources. The Company expects the Strategy to energize the language education and childcare
markets, in which it is making strategic investments.
To achieve stable, long-term earnings growth, the Company and its consolidated subsidiaries (hereinafter the“Group”) launched a five-year medium-term management plan in April 2012. The Group has been advancing
initiatives to strengthen its operating foundation and expand the scope of its operations under this plan.
During the first quarter under review, the Group reorganized its former Health Care Business segment into theLong-term Care Business segment, which is in charge of promoting services covered by the long-term care insurance
system, and its new Health Care Business segment, which is in charge of promoting services not covered by thelong-term care insurance system, in an effort to strengthen its operating base. By implementing this and otherinitiatives, the Group worked to develop an internal system to promote new businesses and step up its sales andmanagement systems.
To expand the scope of its operations, the Group endeavored to create a consistent language education system bylaunching COCO Juku Junior, a new brand of English conversation schools, and improved its system to help students
planning to study abroad. At the same time, the Group made progress in its efforts to globalize its core operations
through measures such as establishing a medical clinic in Singapore and expanding the long-term care business inBeijing, China.
The Group also advanced the establishment and provision on a commissioned basis of various kinds of child carecenters, including certified child care centers, in-hospital child care centers, and in-office child care centers. The
Group focused on giving these child care centers high added value by also linking them to COCO Juku English
conversation schools.
Looking at operating results, the Group posted increased sales for the sixth consecutive year, backed by factors suchas the new contracts it received from large hospitals, a rise in the number of users of long-term care services, andgrowth in the number of GABA Corporation clients.
Turning to earnings, the Long-term Care Business segment and the Company’s subsidiaries (GABA Corporation andNichii Care Palace Company) posted higher profits. Profits declined due to strategic investments, such as those to
carry out promotional activities for launching COCO Juku Junior English conversation schools. However, net income
increased as a result of the extraordinary income posted in connection with the sales of investment securities.
As a result, the Group posted net sales of 68,161 million yen for the first quarter under review (compared with 65,644
million yen posted in the first quarter of the previous fiscal year), operating income of 1,727 million yen (comparedwith 1,863 million yen posted in the first quarter of the previous fiscal year), and ordinary income of 1,367 million
yen (compared with 1,673 million yen posted in the first quarter of the previous fiscal year). Net income was 1,047
million yen (compared with 613 million yen posted in the first quarter of the previous fiscal year).
Results by business segment are as follows:
For your information, the Group restructured its business segments in April 2013 by reorganizing its previous HealthCare Business segment into the Long-term Care Business segment, in charge of the services covered by the long-termcare insurance system, and its new Health Care Business segment, in charge of services not covered by the long-termcare insurance system.
<Medical Support Business>
Sales continued to rise for the Medical Support Business segment due to factors such as the new contracts acquired
from large hospitals and the expanded scope of operations at hospitals where the Group is offering its services on a2

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

commissioned basis. Earnings for the segment fell, reflecting a temporary increase in personnel expenses associatedwith the acquisition of a new contract.
To strengthen its human resources base, the Group is expanding and improving its training programs, aiming at
improving its operational efficiency and increasing customer satisfaction. In May 2013, the Group started a medical
management training program in collaboration with Tama University’s Medical Service and Nursing Care Solutions
Research Institute.
In its management support services, the Group endeavored to expand and improve its product lineup to support
medical institutions in various ways, applying information technology, responding to the need to globalize theinstitutions, and preparing to expand the clinic in Singapore.
As a result, net sales for the segment came to 26,314 million yen (compared with 25,870 million yen posted in thefirst quarter of the previous fiscal year). Operating income for the segment was 1,855 million yen (compared with
2,086 million yen posted in the first quarter of the previous fiscal year).
<Long-term Care Business>
The number of users rose steadily for both home care services and facility care services. Both sales and earnings grewfor the Long-term Care Business segment, also supported by the improved profitability of Nichii Care Palace
Company.
Looking at the status of the new operating bases that were established, for its home care services, the Group opened
eight care plan facilities (bringing the total number of these facilities to 782), four home-visit care facilities(increasing the total number of these facilities, including home-visit bathing facilities, to 1,105), four day-carefacilities (bringing the total number of these facilities to 357), four home nursing care facilities (bringing the total
number of these facilities to 63), and one welfare equipment leasing facility (bringing the total number of thesefacilities to 138). For its facility care services, the Group established two Nichii no Hohoemi group homes (bringing
the total number of these homes to 249).
As a result, net sales for the segment reached 35,413 million yen (compared with 33,664 million yen posted in thefirst quarter of the previous fiscal year). Operating income for the segment was 3,149 million yen (compared with
2,453 million yen posted in the first quarter of the previous fiscal year).
(Note) The major services offered in this segment based on the new segment classifications were as follows: homecare services, facility care services, welfare services for the disabled, and childcare services (excluding these
services at hospitals).
<Health Care Business>
To keep its business portfolio free from institutional risks, such as the risk of revisions to the long-term care insurance
system, the Group switched to a new business promotion system, and advanced initiatives to expand and strengthen
the services not covered by the long-term care insurance system, such as the development and sale of health careproducts, housekeeping services, meal home delivery, and care staff dispatching service.
To expand its operations in China, in May 2013 the Group gave a presentation on the health care business at theSecond China International Senior Services Expo, one of the largest international welfare exhibitions held in China.
Taking further steps, the Group launched a Chinese business project, and continued preparations to expand its
operations in Beijing.
As a result, net sales for the Health Care Business segment came to 811 million yen (compared with 934 million yen
posted in the first quarter of the previous fiscal year). Operating income for the segment was 7 million yen (comparedwith 185 million yen posted in the first quarter of the previous fiscal year).
(Note) The major services offered in this segment based on the new segment classifications were as follows: sales ofhealth care products, housekeeping services, meal home delivery, and care staff dispatching service.
<Education Business>
In the Education Business segment, the Group launched a new brand of English conversation schools called COCO
Juku Junior in April 2013 in a bid to secure a foothold in the market for English conversation courses for children,which is anticipated to expand in the future. The Group started offering COCO Juku Junior English conversation
courses at the 73 schools under its management by the end of June 2013. The Group endeavored to attract more
3

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

students by continuing its aggressive promotion efforts and stepping up its sales activities for COCO Juku and COCO
Juku Junior English conversation schools.
In the area of providing support for overseas studies, the Group established the COCO Juku Study Abroad Desk incollaboration with York Global Study Center Co., Ltd., a Company subsidiary, to establish a support system forstudents hoping to study abroad. In addition, the Group got ready for the New York University School of Continuing
and Professional Studies (NYU-SCPS) American Language Institute (ALI) Tokyo Center, scheduled to open in
October 2013. As these activities indicate, the Group endeavored to develop a system that allows it to meet thediverse needs for language education found in a broad range of age groups toward its goal of training personnel
capable of working around the world.
GABA Corporation sustained sales and earnings growth, with net sales rising 6.3% from the same quarter of theprevious fiscal year and operating income before amortization of goodwill climbing 10.2% year on year. These results
contributed to the Group’s earnings.
In existing businesses, the Group slowly advanced its changeover from the Home Helper Level 2 Course to basic
training course for care workers in response to the nursing care qualification reviews in April 2013. The Group will
wait until at least June 2013 to start offering this beginning staff training course on a full scale. However, sales forexisting businesses rose from the first quarter of the previous fiscal year, thanks to a year-on-year increase in thenumber of students continuing to take the Home Helper Level 2 Course who had completed their applications by theend of the previous fiscal year.
As a result, net sales for the Education Business segment totaled 5,465 million yen (compared with 5,083 million yen
posted in the first quarter of the previous fiscal year). Operating loss for the segment was 1,169 million yen(compared with a loss of 827 million yen posted in the first quarter of the previous fiscal year).
<Other Businesses>
As part of its measures to strengthen its operating foundation, the Group expanded and improved its functions forsupporting its respective businesses.
During the first quarter under review, the Company changed the settlement period for Tokyo Marunouchi PublishingCo., Ltd. from January to March, and the settlement period for Nihon Support Service Co., Ltd. from February to
March.
As a result, net sales for the Other Businesses segment amounted to 156 million yen (compared with 91 million yen
posted in the first quarter of the previous fiscal year). Operating loss for the segment was 9 million yen (comparedwith operating income of 33 million yen posted in the first quarter of the previous fiscal year).

4

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

(2) Details of financial position
Total assets at the end of the first quarter under review fell 3,800 million yen from the end of the previous fiscal year,
to 162,818 million yen. The main reasons for the drop were a 2,221 million yen decrease in current assets, primarily
due to a fall in deferred tax assets, and a 1,579 million yen decrease in property, plant and equipment, mainlyreflecting a decline in investment securities.
Liabilities shrank 4,094 million yen from the end of the previous fiscal year, to 101,269 million yen. The key factorsthat contributed to this decrease were a 2,427 million yen decline in current liabilities, mainly due to a reduction in
the provision for bonuses, and a 1,667 million yen drop in non-current liabilities, primarily attributable to a reduction
in long-term loans payable.
Net assets increased 293 million yen from the end of the previous fiscal year, to 61,549 million yen.

(3) Information on the future outlook, including consolidated financial results forecasts
There is no change in the consolidated financial results forecast for the year ending March 31, 2014, which was
released on May 24, 2013.

2. Summary information (notes)(1) Significant changes to subsidiaries during the term
No related information.

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

(3) Changes in accounting policies, accounting estimates, and restatement
No related information.

5

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

3. Quarterly consolidated financial statements(1) Quarterly consolidated balance sheets
Fiscal 2013
(As of March 31, 2013)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable—trade
Short-term investment securities
Merchandise and finished goods
Work in progress
Raw materials and supplies
Other
Less: allowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment
Buildings and structures—net
Lease assets—net
Other—net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Other
Less: Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

6(Thousand yen)
Q1 of Fiscal 2014
(As of June 30, 2013)

8,686,050
32,200,612
2,398,857
589,186
31,546
394,759
11,947,652(45,765)
56,202,899

7,078,898
32,259,030
3,098,810
596,289
47,930342,275
10,587,742(29,569)
53,981,408

29,669,321
20,286,491
9,573,455
59,529,268

29,592,682
20,294,226
9,348,140
59,235,049

20,311,644
4,075,938
24,387,582

19,805,223
3,916,385
23,721,609

27,467,468(967,518)
26,499,950
110,416,801
166,619,700

26,868,266(987,380)
25,880,886
108,837,544
162,818,953

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

Fiscal 2013
(As of March 31, 2013)
Liabilities
Current liabilities
Notes and accounts payable—trade
Short-term loans payable
Income taxes payable
Accrued expenses
Provision for bonuses
Provision for directors’ bonuses
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustments
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets

7(Thousand yen)
Q1 of Fiscal 2014
(As of June 30, 2013)

827,506
982,562
1,472,751
16,678,253
4,998,197
39,70027,298,064
52,297,036

863,448
1,570,239
394,742
17,605,903
2,701,114
24,85026,709,532
49,869,829

21,021,495
20,693,301
4,991,263
167,319
1,714,930
4,479,039
53,067,349
105,364,385

19,350,075
20,777,329
5,099,043
161,681
1,730,800
4,281,156
51,400,087
101,269,917

11,933,790
17,354,214
36,818,238(5,372,812)
60,733,430

11,933,790
17,354,214
37,250,320(5,373,157)
61,165,168

146,927

22,421

72,190219,118
302,765
61,255,314
166,619,700

52,31874,740309,127
61,549,036
162,818,953

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

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

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
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Loss on retirement of property, plant and equipment,
net
Loss on sales of property, plant and equipment, net
Loss on valuation of investment securities
Provision of allowance for doubtful accounts
Other
Total extraordinary losses
Income before income taxes and minority interests
Income taxes—current
Income taxes—deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

8

Fiscal 2013
(from April 1, 2012
to June 30, 2012)
65,644,980
51,787,727
13,857,252
11,994,164
1,863,088(Thousand yen)
Fiscal 2014
(from April 1, 2013
to June 30, 2013)
68,161,094
53,489,243
14,671,850
12,944,782
1,727,068

30,86852,38534,92745,69871,751

7,308

60,98770,264286,259

50,54867,176205,658

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

483,980
13,651
67,943565,575
1,367,151———

1,030,370
850
1,031,220

3,225

26,187555
199,980
50,00017,820271,581
1,401,828
341,040
441,858
782,898
618,929
5,583
613,346—
49,99925,000—101,186
2,297,185
307,337
930,034
1,237,372
1,059,813
12,361
1,047,451

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

(Quarterly consolidated statements of comprehensive income)(Three months ended June 30)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

9

Fiscal 2013
(from April 1, 2012
to June 30, 2012)
618,929(Thousand yen)
Fiscal 2014
(from April 1, 2013
to June 30, 2013)
1,059,813(101,938)(24,871)(126,810)
492,119(124,506)(19,871)(144,377)
915,435

486,535
5,583

903,073
12,361

Nichii Gakkan Company (9792) Financial Results for the First Quarter of the Year Ending March 31, 2014

(3) Notes to quarterly consolidated financial statements(Notes on the premise of a going concern)
No related information.
(Notes on significant fluctuations in the amount of shareholders’ equity)
No related information.

10