Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2011 (J-GAAP)
November 10, 2010
Name of listed company: Nichii Gakkan Company
Listed on: Tokyo Stock Exchange 1st Section
Securities code: 9792
URL: http://www.nichiigakkan.co.jp
Representative: Daisuke Terada, President and Representative Director
Contact:
Koichi Terada, Director, Manager of Accounting and Finance Division
TEL: 03-3291-2121
Scheduled date of filing quarterly financial report:
November 11, 2010
Scheduled date to start dividends distribution
December 10, 2010
Supplementary quarterly materials prepared: Yes
Quarterly results information meeting held: Yes (for institutional investors and analysts)(Figures shown are rounded down to the nearest million yen.)

1. Consolidated financial results for the second quarter ended September 30, 2010 (April 1, 2010 – September 30, 2010)(1) Consolidated operating results(Percentage figures represent changes from the same period in the previous year.)

Net Sales

Operating Income

Ordinary Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

119,623

6.2

3,401

41.9

3,727

62.6

1,329

96.1

112,643

6.3

2,398

―

2,293

―

677

―

Six months ended
September 30, 2010
Six months ended
September 30, 2009

Net Income per Share

Diluted Net Income
per Share

Yen

Six months ended
September 30, 2010
Six months ended
September 30, 2009

Yen

19.25

—

9.80

—

(2) Consolidated financial position
Total Assets

Equity Ratio

Net Assets per Share

Millions of yen

Millions of yen%

Yen

122,228

50,51641.1

727.99119,081

49,72841.6

716.81

As of September 30, 2010
As of March 31, 2010
Reference: Shareholders’ equity:

Net Assets

As of September 30, 2010: 50,276 million yen

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

2. Dividends
Annual Dividends (Yen)First Quarter

Second Quarter

Third Quarter

—
—

6.00
7.00

—

6.00

12.00

—

7.00

14.00

Year ended March 31, 2010
Year ending March 31, 2011
Year ending March 31, 2011
(Forecast)Year-End

AnnualNote: Revision in the forecast of dividends during the current quarter: None

3. Consolidated financial result forecasts for the year ending March 31, 2011 (April 1, 2010 – March 31, 2011)(Percentage figures indicate the rate of change from the same period in the previous year.)

Net Sales
Full year

Operating Income

Ordinary Income

Net Income
per Share

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

240,000

2.0

8,000

16.5

8,300

20.7

3,500

10.9

50.68

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

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

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

As of September
30, 2010:

73,017,952 shares

As of September
30, 2010:
Six months ended
September 30,
2010:

As of March 31,
2010:
Six months ended
69,062,344 shares September 30,
2009:
3,955,761 shares

As of March 31,
2010:

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

69,183,778 shares* Presentation of implementation status for quarterly review procedures
The quarterly review procedure based on the Financial Instruments and Exchange Act does not apply to these Consolidated
Financial Results and the procedure based on this Act was not complete as of the release of these Consolidated Financial
Results.
* Explanation concerning the appropriate use of financial forecasts and other special notes(Forward looking statements)
The above forecasts are based on information Nichii Gakkan had in its possession as of the time this report was prepared andon certain assumptions judged to be reasonable. Various factors may cause actual results to differ significantly fromforecasts. Please refer to the disclaimers, provided under “Qualitative information on consolidated financial result forecasts”
on page 3 of the quarterly summary financial report (appendix materials), regarding assumptions upon which forecasts are
based and the use of forecasts.

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

Contents of the appendix materials
1. Qualitative information on quarterly consolidated financial results............................................................................... 2(1) Qualitative information on consolidated operating results......................................................................................... 2(2) Qualitative information on consolidated financial position ....................................................................................... 3(3) Qualitative information on consolidated financial result forecasts ............................................................................ 3
2. Others ............................................................................................................................................................................. 3(1) Overview of significant changes to subsidiaries ........................................................................................................ 3(2) Overview of the simplified accounting as well as specific accounting...................................................................... 3(3) Overview of changes in accounting policies, procedures and methods of presentation............................................. 3
3. Quarterly consolidated financial statements................................................................................................................... 4(1) Quarterly consolidated balance sheets ....................................................................................................................... 4(2) Quarterly consolidated statements of income ............................................................................................................ 6(3) Notes on premise of a going concern ......................................................................................................................... 7(4) Notes on significant fluctuation in amounts of shareholders’ equity ......................................................................... 7-1-

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

1. Qualitative information on quarterly consolidated financial results(1) Qualitative information on consolidated operating results
During the first six months ended September 30, 2010, the Japanese economy, supported by exports to emerging markets,
was on a recovery track, but, with stagnant personal incomes and difficult employment conditions adding to rapid yen
appreciation, its future remained highly uncertain.
Regarding business conditions for the Nichii Group, debate regarding the scheduled 2012 revision of the long-term careinsurance system got underway in May. Being discussed for social security reform are issues like the full-scale introductionof 24-hour home nursing service, improving compensation for care workers, and reviews of benefit and burden with an eye
toward securing financial resources.
With that as a backdrop, the Nichii Group, with our philosophy “contribute to the enhancement of human life,” worked
to further strengthen its internal training system, the goal of which is safe, secure service delivery. We also moved ahead
with the development and delivery of new user-oriented services applying e-learning and voice-recognition technology.
In terms of business results, we maintained steady increases in both net sales and profit. In our Health Care Business, thenumber of users of home-care, facility-care and non-insurance services continued to rise steadily. And in our Education
Business, services for the government’s support program “Study and obtain a qualification as a care worker while working
at long-term care facilities” contributed to an increase of non-operating revenue.
As a result, net sales were 119,623 million yen (112,643 million yen in the same period of the previous year), operating
income was 3,401 million yen (2,398 million yen in the same period of the previous year), ordinary income was 3,727
million yen (2,293 million yen in the same period of the previous year) and net income was 1,329 million yen (677 million
yen in the same period of the previous year).
Operating results by segment were as follows.
Beginning with the current fiscal year, we have partially revised the standard for the allocation of expenses among
segments.
<Medical Support Business>
Net sales for our Medical Support Business rose as we steadily increased the number of hospitals under contract andcontinued to make progress in contract revisions, increasing net sales per hospital. Profit, however, declined compared tothe same period a year ago due to a cost increase on factors like the reallocation of expenses among segments and a hike inhealth insurance rates.
Regarding the development of new services, the Company responded to the April contract revision, which created new
additional-medical-fee items and reassessed existing items to lighten the administrative burden of physicians. For this, we
actively deployed medical office work assistants and started to offer new “cyber clerk” medical administration services
applying voice-recognition technology in certain geographic areas.
As a result, sales of this segment were 51,213 million yen (50,435 million yen in the same period of the previous year),and operating income was 2,951 million yen (3,680 million yen in the same period of the previous year).
<Health Care Business>
In the Health Care Business, the number of users of care plan creation, home-visit care, day care, and other home-careservices covered by the long-term care insurance system remained at favorable levels. These results, together with increases
in users of non-insurance services such as welfare services for the handicapped and housekeeping services, contributed toan improvement in net sales.
In the area of facility-care services, individual facilities continued to see steady rises in service users, with stronger sales
activities and efforts to revise pricing contributing to increases at Nichii Home in particular. Rising user numbers are
helping to build a stable revenue base for our facility-care services.
Turning to the opening of new care facilities, we now have over 1,000 home-visit care service offices (including homevisit bathing service offices). Six new group homes added between April and September brought the number of carefacilities to 290. In accordance with our efforts to operate care facilities that are tailored to local needs, we are planning toopen nine new group homes and one pay nursing home in and after October.
As a result, segment sales during the period under review were 61,126 million yen (53,592 million yen in the same
period of the previous year) and operating income was 3,102 million yen (731 million yen in the same period of theprevious year).
<Education Business>
The Education Business saw an year-on-year decline in the number of students enrolled in its mainstay Home Helper Level
2 Course and Medical Office Work Course offerings. Despite that, however, the Company, with local governments
pursuing emergency measures to create employment in the medical and long-term care fields, managed to keep its-2-

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

performance in this business on track. We did this by actively working to promote our services for the government’s
support program “Study and obtain a qualification as a care worker while working at long-term care facilities” and otherjob training programs covered by subsidies.
With regard to the Web College, Nichii’s e-learning educational program inaugurated in September, we are focusing on
developing new courses to build a foundation for a new Education Business enterprise that meets learning needs in the
medical and long-term care fields and a wide array of other areas, as well. Toward that end, we also devoted substantial
efforts to PR activities including television commercials and participation in various types of events.
Therefore, sales of the segment during the period under review were 7,073 million yen (8,333 million yen in the same
period of the previous year) and operating income amounted to 1,043 million yen (1,923 million yen in the same period of
the previous year).
<Other Businesses>
In our Other Businesses segment, we are working to improve operational efficiency for the Group and moving ahead withthe development of new businesses.
At Lakewoods Garden Himeharu no Sato, a project being undertaken by Nichii Green Farm Co. Ltd. in Mobara City,
Chiba Prefecture, we are developing and preparing to offer gardening therapy, animal therapy and other new services,which are expected to bring synergy effects under the principal operations. The grand opening of Lakewoods Garden
Himeharu no Sato is scheduled for early April 2011.
Sales of the Other Businesses during the period under review were 209 million yen (282 million yen in the same periodof the previous year) and operating income was 5 million yen (185 million yen in the same period of the previous year).
(2) Qualitative information on consolidated financial position
Total assets at the end of the second quarter of the current fiscal year increased by 3,147 million yen compared with thefigure at the end of the previous fiscal year to 122,228 million yen. This is mainly because current assets increased by 1,266
million yen due to an increase in notes and accounts receivable, etc., while fixed assets increased by 1,880 million yen due
to increases in tangible fixed assets, etc.
Total liabilities increased by 2,359 million yen compared with the figure at the end of the previous fiscal year to 71,711
million yen. This is mainly because current liabilities increased by 2,509 million yen due to increase in short-term loans
payable and accrued expenses, etc.
Total net assets increased compared with the figure at the end of the previous fiscal year by 788 million yen to 50,516
million yen.
(3) Qualitative information on consolidated financial result forecasts
Our consolidated financial result forecasts for the year ending March 31, 2011 has not been changed since the last forecast
announcement on May 17, 2010.
2. Others(1) Overview of significant changes to subsidiaries
There is no related information.
(2) Overview of the simplified accounting as well as specific accounting* Simplified accounting method
Method used to value inventories
Write-downs on inventory carrying values were made only on inventories with clearly diminished commercial value
based on the estimated net disposal value.
(3) Overview of changes in accounting policies, procedures and methods of presentation* Changes in the accounting standards(Application of Accounting Standards for Asset Retirement Obligations)
Effective from the first quarter of the current fiscal year, Nichii Gakkan has applied the “Accounting Standards for Asset
Retirement Obligations” (ASBJ Statement No.18 issued on March 31, 2008) and the “Guidance on Accounting Standards
for Asset Retirement Obligations” (ASBJ Guidance No. 21 issued on March 31, 2008).
As a result of this application, operating income and ordinary income declined by 42 million yen each, and income
before income taxes and minority interests decreased by 546 million yen for the first six months ended September 30, 2010.
The amount change of asset retirement obligations due to the application of the accounting standards was 1,196 million yen.

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

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

As of September 30, 2010

As of March 31, 2010

Cash and deposits

4,128,303

4,128,264

Notes and accounts receivable

29,425,451

28,554,508

Merchandise and finished goods

421,204

341,091

Work in process

17,4772,356

Raw materials and supplies

206,836

204,690

8,260,512

7,971,467(62,944)(72,066)

42,396,840

41,130,312

Buildings and structures (net)27,122,791

26,163,653

Others (net)11,067,814

11,045,267

Total tangible fixed assets

38,190,606

37,208,921

Goodwill

14,047,528

14,530,389

Others5,459,937

4,500,173

Total intangible fixed assets

19,507,465

19,030,562

22,872,916

22,430,040

Allowance for doubtful accounts(739,311)(718,751)

Total investments and other assets

22,133,604

21,711,288

79,831,677

77,950,773

122,228,517

119,081,085

Notes and accounts payable

773,790

940,792

Short-term loans payable

1,818,002

1,018,002

AssetsCurrent assets

OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Tangible fixed assets

Intangible fixed assets

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

Income taxes payable

2,297,726

2,350,522

Other accrued expenses

14,475,522

13,906,413

Allowance for employees’ bonuses

4,583,930

4,199,857

Allowance for directors’ bonuses

19,90034,000

Others13,034,386

12,044,256

Total current liabilities

37,003,258

34,493,845

Long-term loans payable

22,108,318

24,002,119

Allowance for employees’ retirement benefits

4,340,663

4,133,049

Allowance for directors’ retirement benefits

153,748

149,221

Asset retirement obligations

1,212,440－

Others6,893,333

6,574,526

Total long-term liabilities

34,708,506

34,858,917

71,711,764

69,352,763

Long-term liabilities

Total liabilities-4-

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

As of September 30, 2010

As of March 31, 2010

Common stock

11,933,790

11,933,790

Capital surplus

17,354,214

17,354,214

Retained earnings

27,827,145

26,912,370

Treasury stock(6,788,946)(6,788,705)

Total shareholders’ equity

50,326,203

49,411,670

Unrealized gains on other securities(49,387)

92,759Total unrealized gains and adjustments(49,387)

92,759Minority interests

239,936

223,893

Total net assets

50,516,752

49,728,322

122,228,517

119,081,085

Net assets
Shareholders’ equity

Unrealized gains and adjustments

Total liabilities and net assets-5-Nichii Gakkan Company (9792) Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2011(2) Quarterly consolidated statements of income(Six months ended September 30, 2010)(Thousands of yen)Six months ended
September 30, 2009

Six months ended
September 30, 2010

Net sales

112,643,552

119,623,409

Cost of sales

89,917,886

95,685,813

Gross profit

22,725,666

23,937,596

Selling, general and administrative expenses

20,327,577

20,535,625

Operating income

2,398,088

3,401,970

Interest income

14,51855,702

Commission on consignment for office work

58,75257,552Rent income

68,51389,602－

227,424

Others72,337229,797

Total non-operating income

214,121660,079

264,352

279,823

Bond interest

3,307

－

Rent expenses

30,901

25,336

Others

20,60229,506

Total non-operating expenses

319,163334,667

2,293,046

3,727,383

Gain on sales of fixed assets

43,528210

Gain on prior periods bad debts recovered

69,757－

Reversal of allowance for employees’ bonuses－

111,148

Gain on sales of investment securities

－

5,119

113,286

116,478

Loss on retirement of fixed assets

11,26528,792

Loss on sales of investment securities

120,945

－

7,392

－

Loss on adjustment for changes of accounting standards
for asset retirement obligations－

504,813

Others－

5,716

139,602539,321

Income before income taxes and minority interests

2,266,730

3,304,540

Income taxes

2,141,511

1,953,541

Income taxes–deferred(573,534)

1,306

Total income and other taxes

1,567,977

1,954,847－

1,349,692

Minority interests income of consolidated subsidiaries

21,02920,542

Net income

677,723

1,329,149

Non-operating income

Commission on consignment for job creation businesses

Non-operating expenses
Interest expenses

Ordinary income
Extraordinary income

Total extraordinary income
Extraordinary losses

Loss on liquidation of businessTotal extraordinary losses

Income before minority interests-6-Nichii Gakkan Company (9792) Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending March 31, 2011

(3) Notes on premise of a going concern
There is no related information.
(4) Notes on significant fluctuation in amounts of shareholders’ equity
There is no related information.

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