Financial Results for the First Three Quarters of the Year Ending March 31, 2014 (J-GAAP)
February 7, 2014
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: February 13, 2014
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 three quarters ended December 31, 2013
(April 1, 2013 – December 31, 2013)(1) Consolidated operating results(Percentage figures represent changes year on year.)
Net Sales
Operating Income
Ordinary Income
Net Income
Million yen

Nine months ended
December 31, 2013
Nine months ended
December 31, 2012
(Note) Comprehensive income:%Million yen%

Million yen%

Million yen%

204,208

2.3

5,061

(23.7)

3,951(35.5)

2,300(20.3)

199,587

6.0

6,634

(23.3)

6,126(29.0)

2,885(26.1)

Nine months ended December 31, 2013: 2,189 million yen (-27.6%);
Nine months ended December 31, 2012: 3,025 million yen (-22.9%)

Net Income per Share

Diluted Net Income per Share
Yen

Nine months ended
December 31, 2013
Nine months ended
December 31, 2012

Yen

32.92

—

41.49

—

(2) Consolidated financial position
Total Assets

Net Assets
Million yen

As of December 31, 2013
As of March 31, 2013
Reference: Shareholders’ equity:

Equity Ratio
Million yen

168,340
166,619%

62,123
61,25536.7
36.6

As of December 31, 2013: 61,801 million yen; As of March 31, 2013: 60,952 million yen

2. Dividends
1Q-endAnnual dividends
3Q-end2Q-endYen

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

—
—

Yen

Year-end

Yen

9.00
10.00

—
—

Annual
Yen

Yen

9.00

18.00

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.)

Net Sales

Operating Income

Million yen

Full year

273,200%

2.2

Million yen

6,600

Ordinary Income%(24.5)(Note) Revisions to most recently announced financial results forecast: No

Million yen

5,000

Net Income
per Share

Net Income%(39.9)

Million yen

2,800

%

(36.1)Yen

40.07

* 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 December 31, 2013:
73,017,952
As of March 31, 2013:
73,017,952
2) Number of treasury stock
As of December 31, 2013:
3,133,293
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 December 31, 2013:
69,885,644
As of December 31, 2012:
69,541,611* 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 4 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 Three Quarters 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 ···························································································································· 4(3) Information on the future outlook, including consolidated financial results forecasts······································ 4
2. Summary information (notes)······························································································································ 4(1) Significant changes to subsidiaries during the term························································································· 4(2) Application of 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
Nine months ended December 31················································································································· 7
Quarterly consolidated statements of comprehensive income
Nine months ended December 31················································································································· 8(3) Notes to quarterly consolidated financial statements ······················································································· 9Notes on the premise of a going concern········································································································· 9Notes on significant fluctuation in the amount of shareholders’ equity···························································· 91Nichii Gakkan Company (9792) Financial Results for the First Three Quarters of the Year Ending March 31, 2014

1. Qualitative information on quarterly financial results(1) Details of business results
In the first nine months of the fiscal year ending March 31, 2014, the Japanese economy benefited from improving
corporate earnings, rising stock prices rising and moderately recovering consumer spending, backed by the underlying
trend of a weaker yen, with the economic and monetary policies of the government as a backdrop.
Given the decision in September 2013 to award Tokyo the 2020 Olympic Games and with the number of foreign
visitors Japan topping 10 million people, a further acceleration of globalization is expected going forward.
With respect to social security system reform, the specific content and timing of each policy were presented,
including the promotion of a comprehensive care system for local communities, the review of the scope of coverageof nursing care insurance and increased burdens on users, based on one of the philosophies under the so-called social
security program act, which is the refining and streamlining of social security.
To realize stable growth in long-term profits, the Nichii Gakkan Group has been moving forward with its
medium-term management strategy since April 2012, with the diversification of business management as the basic
focus.
In the language education business, the core of the strategies, the Group completed the nationwide establishment of
COCO Juku classrooms by the end of the previous fiscal year and has been building a consistent language delivery
system tailored to the diverse learning objectives of children and adults, including the deployment of COCO Juku
Junior and the development of a support system for students who want to study abroad in Japan and overseas in thecurrent fiscal year. Strategic investments in the language education business, including the recruitment of instructors
and counselors, have run their course, and the Group has moved to a new stage for investment recovery in the future.
The Group is currently working on the integrated reform of the language education business and the existingeducation business and has been reviewing the operation of classrooms, its sales system and its advertising strategy,
among other things, in the current fiscal year.
In conjunction with these endeavors, the Group has also been working on the diversification of segment categories
and geographical diversification, such as the enhancement of medical management support services and services notcovered by the long-term care insurance system, the expansion of the childcare business, the development of clinics
in Singapore, and preparation for the development of business in China.
In the Childcare Business, the Group promoted the provision of comprehensive services from authorized baby-care
centers to childcare centers inside hospitals and companies to meet diversified childcare needs. The Group also
focused on providing high value-added services such as the provision of English conversation lessons and exchangewith elderly people.
Looking at operating results, the Group achieved record sales for the sixth consecutive quarter, thanks to the solidincrease in the number of users and new users in the mainstay Medical Support Business and Long-Term Care
Business and the contribution of subsidiaries (GABA Corporation and Nichii Care Palace Company). Earnings
declined from a year ago, mainly because of strategic investments in the language education business and the impactof the shift of the qualification system to a basic training course for care workers, despite stable growth in theLong-Term Care Business.
As a result, the Group posted net sales of 204,208 million yen for the first nine months under review (compared withthe 199,587 million yen posted in the same period of the previous fiscal year), operating income of 5,061 million yen(compared with 6,634 million a year ago), and ordinary income of 3,951 million yen (compared with 6,126 million
yen a year ago). Net income was 2,300 million yen (compared with 2,885 million yen a year ago).
Results by business segment are as follows:<Medical Support Business>
Sales continued to increase in the Medical Support Business segment due to the new contracts acquired from large
hospitals and the expansion of operations at hospitals where the Group is offering services. Earnings for the segment
declined due to a temporary increase in personnel and other expenses derived from the acquisition of new contracts
from large hospitals. The Group is working to improve operational efficiency at hospitals where it acquired newcontracts, with the aim of rapidly increasing profitability.
In its management support services, the Group took steps to enhance its diversified and comprehensive services,
including the commencement of operation of clinics in Singapore and the provision of medical concierge services.
2

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

Net sales in this segment stood at 79,372 million yen (compared with 77,951 million yen in the same period of theprevious fiscal year), and operating income was 6,110 million yen (compared with 6,169 million yen a year ago).
<Long-term Care Business>
The Group worked to develop a comprehensive service delivery system rooted in local needs, such as the opening of
new facilities and the enhancement of home nursing care services and dementia care services. As the number of users
continued to rise steadily, both for at-home services and services at health care facilities, boosting both sales andprofits. The number of users at the end of December 2013 was 143,750 for at-home services (an increase of 2,223
users from the same period of the previous fiscal year) and 10,288 for services at health care facilities (an increase of
434 users).
The Group also held a nursing case trial class and forums to allow communication with children at day-care centers
operated by the Group across the country. The Group also made efforts to increase the value of services focused on
local communities, as indicated by the conclusion of an anti-disaster agreement with Edogawa Ward, Tokyo by Nichii
Care Palace Company in November 2013.
Looking at the status of the new operating bases that were established, for its home care services, the Group opened
15 care plan facilities (bringing the total number of these facilities to 789), 11 home-visit care facilities (increasing
the total number of these facilities, including home-visit bathing facilities, to 1,112), 11 day-care facilities (for a totalof 364), 7 home nursing care facilities (for a total of 66), and 2 welfare equipment leasing facilities (for a total of 139).
For its facility care services, the Group established 11 Nichii no Hohoemi group homes (for a total of 258), two Nichii
no Kirameki pay nursing homes (for a total of 53), and one Nichii Home pay nursing home (for a total of 53).
As a result, net sales for the segment reached 107,584 million yen (compared with the 102,972 million yen posted in
the same period of the previous fiscal year). Operating income for the segment was 9,841 million yen (compared with
8,308 million yen a year ago).
(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 establish a balance in its business portfolio that protects against risks such as institutional changes, the Groupfocused on enhancing services that are not covered by the long-term care insurance system, such as sales of healthcare products, housekeeping services, the meal home delivery service and the care staff dispatch service. In eachservice, the Group aimed to develop products that reflect the opinions of users of nursing care services and theirfamilies as well as feedback from its staff, with the aim of improving its services.
In its operations in China, the Group strengthened business promotion systems by dispatching representatives toChina and establishing a Chinese business headquarters, preparing for the building of a business model.
As a result, net sales for the Health Care Business segment came to 2,790 million yen (compared with the 2,948
million yen posted in the same period of the previous fiscal year). Operating income for the segment was 105 million
yen (compared with 296 million yen a year ago).
(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 language education business, the Group built a system to provide language education tailored to wide-ranging
language needs across different age groups through the expansion of COCO Juku Junior, the development of a system
to support students who want to study abroad, and the opening of the American Language Institute (ALI) Tokyo
Center of the New York University School of Continuing and Professional Studies (NYU-SCPS). In terms of the
expansion of COCO Juku Junior, the Group promoted the rollout of classrooms based on a franchise model (156classrooms at the end of December 2013) and took action to improve operational efficiency, making effective use of
the management resources of the existing education business for the operation of classrooms and sales management,
etc. Earnings faced severe conditions due to preliminary expenses such as classroom operating and advertisingexpenses. GABA Corporation, which specializes in individual lessons, steadily increased the number of students. In
3

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

COCO Juku, the number of students also followed an upward trend, albeit moderately.
In the existing education business, the number of students fell due to factors such as a decline in needs for acquiring
qualifications associated with the improved employment situation and the impact of the changeover of thequalification system to a basic training course for care workers. The Group also sought to ensure appropriate nursing
care skills by providing training courses such as a basic course in practical care and free seminars tailored to various
needs, while seeking to identify potential human resources for nursing care. In addition, the Group prepared for theprovision of a training course for working-level nursing care workers (opened in February 2014), etc. in line withinstitutional trends.
As a result, net sales for the Education Business segment totaled 14,120 million yen (compared with the 15,453
million yen posted in the same period of the previous fiscal year). Operating loss for the segment was 5,163 million
yen (compared with operating loss of 2,662 million yen a year ago).
<Other Businesses>
In Others Businesses, the Group undertook the task of operating according to the Group’s strategies, such as thefostering of therapy dogs, with the aim of increasing the added value of the segment mainstay businesses. As ameasure to strengthen its business base, the Group also sought to develop a system and improve operating efficiency
in each Group company.
Net sales for the Other Businesses segment amounted to 340 million yen (compared with 262 million yen posted in
the first three quarters of the previous fiscal year). Operating loss for the segment was 69 million yen (compared with
operating income of 140 million yen posted in the first three quarters of the previous fiscal year).

(2) Details of financial position
Total assets at the end of the first three quarters under review increased 1,720 million yen from the end of theprevious fiscal year, to 168,340 million yen. The main reasons for the increase were a 681 million yen rise in current
assets, primarily due to an increase in securities, and a 1,038 million yen rise in noncurrent assets, mainly reflecting
an increase in lease assets.
Liabilities increased 852 million yen from the end of the previous fiscal year, to 106,216 million yen. The key factors
contributing to this increase were a 2,201 million yen rise in current liabilities, mainly reflecting an increase in
short-term loans payable, and a 1,349 million yen drop in noncurrent liabilities, primarily attributable to a reduction in
long-term loans payable.
Net assets increased 868 million yen from the end of the previous fiscal year, to 62,123 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 November 7, 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.

4

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters 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
Noncurrent 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 noncurrent assets
Total assets

5(Thousand yen)Q3 of Fiscal 2014
(As of December 31, 2013)

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

8,617,598
32,779,799
3,004,434
603,32287,191
337,992
11,488,415(33,928)
56,884,825

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

29,256,881
23,156,281
9,738,189
62,151,352

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

18,896,587
3,908,453
22,805,041

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

26,906,759(407,947)
26,498,811
111,455,205
168,340,031

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters 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 provision
Other
Total current liabilities
Noncurrent liabilities
Long-term loans payable
Lease obligations
Provision for retirement benefits
Provision for directors’ retirement benefits
Asset retirement obligations
Other
Total noncurrent 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

6(Thousand yen)Q3 of Fiscal 2014
(As of December 31, 2013)

827,506
982,562
1,472,751
16,678,253
4,998,197
39,7006,630
27,291,434
52,297,036

1,225,226
5,775,565
379,692
17,887,190
2,524,525—
20,951
26,685,088
54,498,240

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

16,155,307
23,866,117
5,335,498
165,866
1,747,862
4,447,533
51,718,185
106,216,425

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

11,933,790
17,354,214
37,804,405(5,374,270)
61,718,140

146,927

30,176

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

53,27083,447
322,018
62,123,605
168,340,031

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

(2) Quarterly consolidated statements of income and comprehensive income(Quarterly consolidated statements of income)(Nine months ended December 31)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Rent income
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
Loss on liquidation of subsidiaries and affiliates
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

Fiscal 2013
(from April 1, 2012
to December 31, 2012)
199,587,654
157,123,886
42,463,767
35,829,057
6,634,710(Thousand yen)
Fiscal 2014
(from April 1, 2013
to December 31, 2013)
204,208,864
162,034,181
42,174,683
37,113,428
5,061,254

107,898
153,307204,258
433,954899,418

105,110
152,087
57,874
190,888505,960

1,305,548
37,41965,006
1,407,974
6,126,154

1,509,687
47,14059,0301,615,859
3,951,356

1,922
—
1,922

1,030,370
850
1,031,220

38,40743,454

3,221
199,980—
69,001
310,610
5,817,465
1,872,980
1,033,734
2,906,714
2,910,751
25,4712,885,279——
77,03622,207
142,699
4,839,877
1,506,201
1,008,031
2,514,232
2,325,644
25,2522,300,391

7

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

(Quarterly consolidated statements of comprehensive income)(Nine months ended December 31)

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

Fiscal 2013
(from April 1, 2012
to December 31, 2012)
2,910,751(Thousand yen)
Fiscal 2014
(from April 1, 2013
to December 31, 2013)
2,325,644

70,84543,417
114,263
3,025,014(116,750)(18,920)(135,671)
2,189,973

2,999,542
25,471

2,164,720
25,2528

Nichii Gakkan Company (9792) Financial Results for the First Three Quarters 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.

9