Consolidated Financial Statements for the Nine Months Ended December 31, 2007
February 15, 2008

Listed company name: Nichii Gakkan Company
Code number: 9792
RepresentativeContact

Listed on: Tokyo Stock Exchange 1st Section
URL: http://www.nichiigakkan.co.jp

Title: President and Representative Director Name: Takashi Mori
Title: Director, Vice President of Accounting Division and General Manager ofAccounting Department
Name: Koichi Terada
Tel: 03-3291-2121*Amounts under one million yen have been rounded down.

1. Consolidated Results for the Nine Months of FY2008 (April 1, 2007-December 31, 2007)(1) Business results(Percentage figures indicate the rate of change from the same period in the previous year.)
Net Sales
Nine Months ended
December 31, 2007
Nine Months ended
December 31, 2006
For the year ended
March 31, 2007

Operating Income
Millions of yen%

Millions of yen%

Millions of yen%

147,323

(3.8)

1,796

(14.1)

1,931(10.6)

276(69.3)

153,165

(1.2)

2,091

(48.5)

2,159(49.0)

901－

202,549

2,635

2,709

774

Equity Ratio

Net Assets
per Share

Diluted Net Income
per Share
Yen

Nine Months ended
December 31, 2006For the year ended
March 31, 2007

Net Income%Net Incomeper Share

Nine Months ended
December 31, 2007

Ordinary Income

Millions of yen

Yen

7.86

－

25.59

－

22.00

－

(2) Consolidated financial position
Total Assets

Net Assets

Millions of yen

Nine Months ended
December 31, 2007
Nine Months ended
December 31, 2006
For the year ended
March 31, 2007

Millions of yen%

Yen

120,646

51,74842.8

1,464.46

92,78952,37556.3

1,482.89

92,11552,24756.6

1,479.10

2. Dividends
Dividends per share
Nine Months ended December 31, 2007－

Nine Months ended December 31, 2006

－13.

Consolidated Financial Results Forecasts for FY 2008 (April 1, 2007-March 31, 2008)

There is no change in the full-year forecast of operating performance for FY2008, as presented in the “Notification
about revision of full-year forecast of FY2008” published November 22, 2007.

4.

Others(1) Significant transfers to subsidiaries during the term (transfers of specific subsidiaries with changes
in the range of consolidation): None
(2) Adoption of simplified method in the accounting method: Yes(3) Difference in the accounting method from the one applied for the recent fiscal year: Yes* Disclaimer regarding Forward-looking Statements and Other Remarks
Consolidated Financial Results Forecasts for FY 2008 has been prepared based on data as of the announcement date.
Actual results may differ from the forecasted figures due to various factors.

(Reference) Overview of the Non-Consolidated Business Results*Amounts under one million yen have been rounded down.

Non-Consolidated Results for the Nine Months of FY2008 (April 1, 2007-December 31, 2007)(1) Non-Consolidated Operating Results(Percentage figures represent changes from the same period of the previous year.)
Net Sales

Operating Income

Ordinary Income

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Nine Months ended
December 31, 2007
Nine Months ended
December 31, 2006

140,244

(6.4)

1,795

(6.9)

2,044

0.3

829

(5.5)

149,766

1.3

1,928

(50.4)

2,038(50.1)

876－

For the year ended March
31, 2007

198,099

2,506

2,682

Net Assets

Equity Ratio

856

Net Income
per Share
Yen

Nine Months ended
December 31, 2007
Nine Months ended
December 31, 2006
For the year ended March31, 2007

23.54
24.89
24.30

(2) Non-Consolidated Financial Position
Total Assets
Millions of yen

Nine Months ended
December 31, 2007
Nine Months ended
December 31, 2006
For the year ended March31, 2007

Millions of yen

Net Assets
per Share%Yen

110,078

48,40444.0

1,374.32

88,57948,39854.6

1,374.08

86,811

48,36955.7

1,373.29

2

[Qualitative information and financial statements]
1. Qualitative information on consolidated operating results
In the 3rd quarter operating results for the current year, the sales result was severely affected due to the drop in homecare service fees and the reduction in income from the Medical office administrative work course and the Home helper
training course in the Education Business section, even though the conversion in September of “the Nichii Care PalaceCompany” (the old Japan-Silver Inc.), that operates a pay nursing home, into a wholly-owned subsidiary contributed toour sales.
In addition, the profit results were severely affected due to decreasing sales in the Health Care Business andEducation Business and the influence of temporary cost increases for smoothly transferring the COMSN long-term carebusiness during the period of November to December, even though we worked to reduce labor costs by efficiently
allocating human resources in the Medical Support Business, and reducing operating costs by reducing company-wide
advertising and promotion expenses.
As a result of these activities, net sales during the 3rd quarter of the year ending March 31, 2008 were ¥147,323
million (down 3.8% year on year), operating income was ¥1,796 million (down 14.1% year on year), ordinary income
was ¥1,931 million (down 10.6% year on year), and net income was ¥276 million (down 69.3% year on year).
By converting the Nichii Care Palace Company into a wholly-owned subsidiary and inheriting the COMSN nursing
care business, the Nichii Gakkan Group has realized “total long-term care service” that covers preventive care, homecare, and facility care.
The financial results of Nichii-no Hohoemi Co., Ltd., Nichii-no Kirameki Co., Ltd., and Nichii Home Co., Ltd., ourinherited facility care services, are to be included in the consolidated statements for the fiscal year ending March 31,
2008.

Shown below is the segment information on net sales and operating income by business category.

Segment
Medical Support Business
Health Care Business
Education Business
Other Businesses

Net Sales(Millions of Yen)

YoY
(%)

82,32756,560
7,833
601

(1.1)
(4.6)
(19.5)(32.7)

Operating Income(Millions of Yen)
7,741
442
(1,192)
185

YoY
(%)
(1.1)
(72.3)(4.2)(13.7)

2. Qualitative information on consolidated financial position
Total assets were ¥120,646 million, having increased ¥28,530 million compared with the figure at the end of theprevious fiscal year, mainly due to accounts due increased ¥1,823 million, short-term loans increased ¥23,196 million,buildings and structures increased ¥2,617 million, goodwill increased ¥3,382 million, and cash and deposit decreased¥5,412 million.
Liabilities were ¥68,897 million, having increased ¥29,029 million compared with the figure at the end of the previous
fiscal year, mainly due to short-term borrowings increased ¥28,068 million, long-term advance received increased¥4,332 million, reserve for bonuses decreased ¥1,614 million and bonds decreased ¥2,506 million yen.
Net assets were ¥51,748 million, having decreased ¥498 million compared with the figure at the end of the previous
fiscal year.

3３. Others(1) Significant changes to subsidiaries during the term (transfers in specified subsidiaries with changes in the range ofconsolidation): None
(2) Adoption of simplified method in the accounting method:
The physical inventory check is omitted for some of the inventory assets.
(3) Difference in the accounting method from the method applied for the recent fiscal year:
In line with amendments to the Corporation Tax Law, and effective as of the current consolidated fiscal year, Nichii
Gakkan group has changed the depreciation method applied to tangible fixed assets acquired on or after April 1,
2007, according to the change in the depreciation method stipulated by the revised Corporation Tax Law. This change
has had only a slight influence on profit and loss.
And, Nichii Gakkan group records the assets acquired on and before March 31, 2007, in such a way that thedifference between an amount equivalent to 5% of the acquisition price and the memorandum value is depreciatedequally over five years from the fiscal year following the year in which the remaining value reached 5% of theacquisition price calculated based on the depreciation method under the previous Corporation Tax Law. The resulting
depreciation amount is included in the Allowance for depreciation account. This change has had only a slightinfluence on profit and loss.

4

Quarterly Consolidated Financial Statements (Summary)
1. Quarterly Consolidated Balance Sheet (Summary)Nine Months ended
December 31, 2006

Nine Months ended
December 31, 2007

AmountAmount(Thousands of yen)
(Reference)
FY2007

ChangeAmountRC

Amount%ASSETSI Current assets
1. Cash and deposits
2. Notes and accounts receivable
3. Inventories
4. Short-term loans
5. Deferred tax assets
6. Others
7. Allowance for doubtful
accounts
Total current assets
II Fixed assets(1) Tangible fixed assets
1. Buildings and structures
2. Land
3. Others
Total tangible fixed assets(2) Intangible fixed assets
1. Goodwill
2. Others
Total intangible fixed assets(3) Investments and other assets
1. Investment securities
2. Long-term loans receivable
3. Guarantee money deposited
4. Deferred tax assets
5. Others
6. Allowance for doubtful
accounts
Total investments and otherassets
Total fixed assets
Total assets

8,661,719
24,736,187
1,857,721－
2,152,684
3,647,467

4,459,893
24,272,094
1,151,253
23,197,100
2,958,564
5,809,539（4,201,825）（464,093）(706,468)
23,197,100
805,880
2,162,072(48.5)(1.9)(38.0)－
37.4
59.3

9,872,547
24,124,838
1,475,298
900
3,766,302
3,329,580（104,595)（85,979）

18,615(17.8)(105,039)

40,951,184

61,762,465

20,811,280

50.8

42,464,428

26,467,280
7,733,496
744,755
34,945,532

28,969,227
8,205,304
721,608
37,896,140

2,501,947
471,807（23,146）
2,950,608

9.5
6.1
(3.1)
8.4

26,351,745
7,681,997
440,157
34,473,899

2,723,046
1,193,247
3,916,294

6,053,299
1,067,808
7,121,107

3,330,252（125,439）
3,204,813

122.3(10.5)
81.8

2,670,896
1,133,609
3,804,505

912,6032,449,850
4,756,563
3,401,867
4,049,660

1,229,002
3,061,653
5,515,496
1,541,610
3,147,991

386,399
611,802758,932（1,860,257）(901,669)

42.3
25.0
16.0
(54.7)(22.3)

1,201,807
2,444,542
4,763,833
1,525,228
2,169,636(2,594,547)（699,390）

1,895,156(73.0)(732,681)

12,975,998

13,866,364

890,365

6.9

11,372,368

51,837,825
92,789,009

58,883,612
120,646,078

7,045,787
27,857,068

13.6
30.0

49,650,772
92,115,200

5Nine Months ended
December 31, 2006

Nine Months ended
December 31, 2007

AmountAmount(Reference)
FY2007

ChangeAmountRC

Amount%I

LIABILITIESCurrent liabilities
1. Notes and accounts payable
2. Short-term loans payable
3. Current installments oflong-term debt

I

1,006,139
28,470,000(524,435)
27,870,000(34.3)－

1,144,987
402,000

38,352

21,085(17,267)(45.0)

33,1784.

Current redemption of bonds

3,808,000

3,808,000－－

3,808,000

5.
6.
7.
8.

Accrued expenses
Consumption tax payable
Income taxes payable

16,442,918
1,464,838
142,755

16,519,267
1,236,696
451,549

76,349(228,142)
308,7930.5(15.6)
216.3

16,011,429
1,574,166
154,193

Allowance for employee
bonuses

1,572,873

1,706,229

133,356

8.5

3,320,330

9.

Allowance for directors' andauditors' bonuses

－

1,780

1,780

－

36,00010. Others
Total current liabilities
II

1,530,574
600,000

4,995,377

4,896,871(98,505)(2.0)

4,891,422

30,595,691

58,117,620

27,521,928

90.0

31,375,708

6,590,000
22,037－2,782,000
20,867
4,332,549(3,808,000)(1,169)4,332,549(57.8)(5.3)－

5,288,000
19,118－2,953,328

3,356,846

406,51813.8

2,941,991

Long-term liabilities
1. Bonds
2. Long-term loans payable
3. Long-term advance received
4. Allowance for employee
retirement benefits
5. Allowance for directors' andauditors' retirement benefits
6. Others
Total long-term liabilities

130,427

138,397

8,250

6.3

132,243

125,083
9,817,597

149,185
10,779,846

24,101
962,249

19.3
9.8

110,927
8,492,282

Total Liabilities

40,413,289

68,897,467

28,484,178

70.5

39,867,990

NET ASSETSShareholders' equity
1. Common stock
2. Capital surplus
3. Retained earnings

11,933,790
17,354,214
28,813,219

11,933,790
17,354,214
28,187,346－－(625,873)

－－
(2.2)

11,933,790
17,354,214
28,686,400(5,933,206)(5,935,858)(2,652)0.0(5,934,751)

52,168,018

51,539,492(628,525)(1.2)

52,039,654

63,22839,416(23,812)(37.7)

56,82663,22839,416(23,812)(37.7)

56,826

4. Treasury stock
Total shareholders' equity
II

Unrealized gains and adjustments

III

Unrealized gains on other securities
Total unrealized gains andadjustments
Minority interest

144,473

169,701

25,22717.5

150,729

Total net assets

52,375,720

51,748,610(627,109)(1.2)

52,247,210

Total liabilities and net assets

92,789,009

120,646,078

27,857,068

30.0

92,115,200

6

2. Quarterly Consolidated Statements of Income (Summary)

IIIIIIIVV

VI

VIINet sales
Cost of sales
Gross profit
Selling, general and administrative
expenses
Operating income
Non-operating income
1. Interest income
2. Dividend income
3. Commission on consignment foroffice work
4. Income from lease of fixed assets
5. Interest on refund of income taxes
and other
6. Income from lease of facilities
7. Others
Total non-operating income
Non-operating expenses
1. Interest expenses
2. Bond interest
3. Compensation for damages
4. Bond issue cost
5. Loss on disengagement ofguarantee money deposited
6. Others
Total non-operating expenses
Ordinary income
Extraordinary income
1. Gain on sale of fixed assets
2. Gain on sale of investment insecurities
3. Gain on sale of stock of affiliatedcompany
4. Reversal of allowance for
doubtful receivables5. Others
Total extraordinary income
Extraordinary losses
1. Loss on sale of fixed assets
2. Loss on retirement of fixed assets
3. Loss on revaluation of inventories
4. Loss on impairment
5. Loss on disengagement of lease
6. Settlement payments
7. Expense for change of brands
Total extraordinary losses
Income before income taxes
Income, inhabitants and business taxes
Adjustments for income and other taxes
Minority interest
Net income(Thousands of yen)

Nine Months ended
December 31, 2006

Nine Months ended
December 31, 2007

AmountAmount(Reference)
FY2007

ChangeAmountRCAmount

202,549,097
163,310,893
39,238,203

153,165,394
123,298,712
29,866,681

147,323,129
118,192,599
29,130,530(5,842,265)(5,106,113)(736,151)

%
(3.8)
(4.1)
(2.5)

27,775,548

27,333,534(442,014)(1.6)

36,602,387

2,091,133

1,796,996(294,137)(14.1)

2,635,815

19,512
12,838129,372
5,730

109,859(7,108)563.0(55.4)

26,342
12,83867,857

66,571(1,285)(1.9)

90,904

23,42421,803(1,621)(6.9)

30,985－30,23030,230－－－74,499198,132

37,34049,778
340,827

37,340(24,720)
142,694－(33.2)
72.0－
137,690298,762

33,64437,178
10,96632,940100,928
57,2097,805－

67,284
20,031(3,160)(32,940)

200.0
53.9
(28.8)－

40,451
57,40927,262
32,940702

33,58332,880－41,06314,084
129,516
2,159,749

6,421
205,948
1,931,874(7,663)76,431(227,874)(54.4)
59.0(10.6)

25,500224,627
2,709,950

29,320489(28,830)(98.3)

29,3202,850

21,00018,149

636.8

2,850

－

20,99920,999－－－68,75868,758－－634
32,804－111,247(634)
78,442

－
239.1

634
32,804－35,633－52,560103,395－－
191,5892,000,964
429,322645,314
24,990901,337－
41,510216,258－－
180,000
123,591
561,360
1,481,761
378,020803,298
23,471
276,970－
5,877
216,258(52,560)(103,395)
180,000
123,591
369,771(519,203)(51,301)
157,984(1,518)(624,366)

－
16.5
－
－
－
－
－
193.0
(26.0)(12.0)
24.5(6.1)(69.3)

22,14759,472
274,665
52,560103,395－－
512,2422,230,512
510,409912,722
32,612774,768

7