Consolidated Earnings Report for the First Nine Months of Fiscal 2017
[Japanese GAAP]
August 1, 2017
Company Name:
Stock Listing:Code Number:
URL:
Representative Director:
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Filing of Quarterly Securities Report:
Scheduled Payment of Dividends:
Supplementary explanatory materials prepared:
Explanatory meeting:

EPS Holdings, Inc.
First Section, Tokyo Stock Exchange4282
http://www.eps-holdings.co.jp
Yan Hao, Chairman & CEO
Shuzo Orihashi, Director, Executive Corporate Officer+81-3-5684-7873
August 14, 2017
－
None
None

(¥ millions are rounded down)
1. Consolidated Results for the Third Quarter of Fiscal 2017 (October 1, 2016 to June 30, 2017)(1) Consolidated Operating Results(¥ millions; percentage figures represent year-on-year changes)
Profit attributable toFirst Nine Months
Net sales
Operating income
Recurring profit
owners of parent
Fiscal 2017
44,637 16.9%
6,312
27.4%
6,513
25.9%
3,529
11.7%
Fiscal 2016
38,187 17.0%
4,953
37.7%
5,174
39.6%
3,158
100.6%
Note: Comprehensive income: June 30, 2017: ¥4,782 million (139.6%), June 30, 2016: ¥1,995 million (- 14.3%)
First Nine Months
Fiscal 2017
Fiscal 2016

Earnings
per share (¥)
76.57
74.46

Net income
per share (diluted) (¥)－－(2) Consolidated Financial Position
Total assets

Net assets

June 30, 2017
59,76643,312September 30, 2016
52,53034,364
Note: Equity: June 30, 2017: ¥40,245million, September 30, 2016: ¥33,801 million
2.

(¥ millions)
Equity ratio
(%)
67.3
64.3

Dividends
First Quarter－－

Dividend per share (¥)
Third Quarter－－

Year End
Full Year
Fiscal 2016
15.00
25.00
Fiscal 2017
Fiscal 2017 (forecast)
12.00－
Notes: 1. Revisions to recent dividend forecasts: None
2. Components of the fiscal 2016 interim dividend: Ordinary dividend of ¥8 per share and commemorative dividendof ¥2 per share (commemorative dividend to mark the 25th anniversary of the Company’s founding)Components of the fiscal 2016 year-end dividend: Ordinary dividend of 10 yen per share and special dividend of 5
yen per share
3.

Second Quarter
10.00
10.00

Forecast of Consolidated Results for Fiscal 2017 (October 1, 2016 to September 30, 2017)(¥ millions; percentage figures represent year-on-year changes)
Profit attributable to
Net sales
Operating income
Recurring profit
owners of parent
Full year
58,000
10.1%
6,500
4.4%
6,500
(1.4)%
3,500(11.7)%
Note: Revisions to recent consolidated results forecasts: None

*Notes(1) Changes to important subsidiaries during the first six months changes in specified subsidiaries resulting in revised scopeof consolidation): Yes
Newly included: 1 company (Name) Shanghai Hua Xin High Biotechnology Co., Ltd.
Excluded: – companies (Name)(2) Application of special accounting methods in the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting principles, accounting estimates and restatements①Changes in accounting policies in conjunction with revisions to accounting standards: None
②Other changes: None
③Changes in accounting estimates: None
④Restatements: None
(4) Number of shares issued (common stock)①Number of shares issued at end of
Fiscal 2017, 3Q end
period (including treasury stock):②Number of treasury stock at end of
period:Fiscal 2017, 3Q end③Average number of stock during theperiod:Fiscal 2017, 3Q

46,311,389 Fiscal 2016 end

46,311,389

207,722 Fiscal 2016 end

1,703,017

46,092,005 Fiscal 2016, 3Q

42,419,603

Note:
The total number of treasury shares included shares held by the employees’ shareholding trust, specifically 136,600 shares asof September 30, 2016 and 69,300 shares as of June 30, 2017.
* This financial report is outside the scope of the quarterly audit review.
* Explanation concerning the appropriate use of financial forecasts and other notable matters.
Earnings forecasts and other forward-looking statements in this report are based on data currently available to management
and certain assumptions that management believes are reasonable. Actual results may differ materially from thesestatements for various reasons.

Table of Contents of Supplementary Materials
1. Qualitative Information Concerning Quarterly Financial Statements and Other Matters………………………….………
(1) Explanation Regarding Consolidated Operating Results………………………………………………………………
(2) Explanation Concerning Forward-Looking Statements such as Consolidated Financial Forecasts……………………

2
2
3

2. Quarterly Consolidated Financial Statements………………………………………………………………………………
(1) Quarterly Consolidated Balance Sheets…………………………………………………………………..……………
(2) Quarterly Consolidated Statements of Income and Comprehensive Income……………………………………………
Quarterly Consolidated Statements of Income(The nine months ended June 30, 2017)……………………………………..…………………………………….
Quarterly Consolidated Comprehensive Income(The nine months ended June 30, 2017) ……………………………………………………………………………
(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Concerning the Going Concern Assumption) ……………………………………………………………….
(Note Concerning Significant Changes in the Amount of Shareholders’ Equity) …………………………..………
(Adoption of Special Accounting Treatment for the Preparation of Quarterly Consolidated Financial Statements) …
(Changes in Accounting Policies and Changes in and Restatements of Accounting Estimates) ………..…………
(Segment Information) ………………………………………………………………………………………………

4
4
6
6
7
8
8
8
8
8

3. Supplementary Information ……………………………………………………………………………………………… 10(1) Orders Received ……………………………………………………………………………………………………… 10

11. Qualitative Information Concerning Quarterly Financial Statements and Other Matters(1) Explanation Regarding Consolidated Operating Results
Overview of Operating Results for the Nine Months Ended June 30, 2017(¥ millions)
The First Nine Months of
The First Nine Months of
Fiscal 2017

Fiscal 2016

Net sales
Operating income
Recurring profit
Profit attributable toowners of parent

Amount38,187
4,953
5,174
3,158

%
100
13.0
13.5

Amount44,637
6,312
6,513

8.3

3,529

%

Change

100
14.1
14.6

Amount
6,449
1,359
1,339

7.9

370

%
16.9
27.4
25.9
11.7

In the nine months ended June 30, 2017, the EPS Group as a whole posted consolidated net sales of ¥44,637 million, an
increase of 16.9% year on year, mainly driven by higher sales across all businesses. Operating income rose by 27.4% year on
year to ¥6,312 million, the highest ever for a nine-month period, mainly reflecting firm performance trends across all
businesses except for the Global Research Business.
Operational segment are outlined as follows.
Segment Information
The Group primarily operates businesses in the following five segments (three domestic segments and two overseas
segments).
(¥ millions)
The First Nine
The First Nine
ChangeMonths of fiscal
Months of fiscal
2016
2017
CRO
Net sales
20,357
21,637
1,279
Operating income
4,836
5,082
246
SMO
Net sales
7,891
10,581
2,689
Domestic
Operating income
440
1,495
1,054
Business
CSO
Net sales
5,450
6,304
854
Operating income
231
448
217
GlobalNet sales
2,954
3,495
541
Research
Operating loss (income)
247
(317)
(564)
Overseas
EKISHIN
Net sales
2,793
4,600
1,806
Business(China)Operating income (loss)
(71)
288
359
Business
1) CRO BusinessIn the CRO Business, the Group conducts operations based on the following structure:a. Contract-based clinical study and post-marketing surveillance (PMS) services: EPS Corporation and EPS Associates Co.,Ltd.
b. On-site CRO services: EPMate Co., Ltd.
c. Pharmaceutical and medical IT services: e-Trial Co., Ltd.
d. Clinical research services: EP- CRSU Co., Ltd. (EPI Japan Co., Ltd. and J-CRSU Co., Ltd. merged on April 1, 2017).
Looking at performance by service, in clinical study services, net sales and operating income were largely in line with
forecasts, supported mainly by measures to strengthen management and promote the integration of internal management
systems. In PMS and related services, net sales and operating income both surpassed forecasts as a result of measures tostrengthen the organizational structure and rigorously enforce cost controls.
In on-site CRO services, net sales were below plan due to delays in securing resources, while operating income was largely
in line with plan. In pharmaceutical and medical IT services, net sales and operating income both surpassed forecasts.
In clinical research services, net sales and operating income both increased year on year due to favorable progress oncontract-based projects.
As a result, in the CRO Business, net sales were ¥21,637 million, an increase of 6.3% year on year, and operating income
was ¥5,082 million, an increase of 5.1% year on year.

2) SMO Business
The SMO Business is undertaken by EP-SOGO Co., Ltd. and Sogo Rinsho Médéfi Co., Ltd.
In this business, the Group developed a management structure capable of realizing integration synergies with the former
Sogo Rinsho Group, and strengthened the project management
system. These and other measures facilitated steady progress2
on various projects.
In addition, given that the integration with the former Sogo Rinsho Group was implemented in the six months ended March
31, 2016, higher sales as a result of the integration are reflected in operating results for the nine months ended June 30, 2017.
As a result, in the SMO Business, net sales rose sharply by 34.1% year on year to ¥10,581 million. Operating income was¥1,495 million, a significant increase of 239.4% year on year, as higher earnings from the integration outweighed theamortization of goodwill.
3) CSO Business
The CSO Business is undertaken by EP-PharmaLine Co., Ltd.
In CMR services for pharmaceuticals (CMR: Contract Medical Representative), the Group strengthened its sales system andnew customers are increasing, although the Company recorded only a slight increase year on year. In the pharmaceutical callcenter division, sales increased, reflecting continued strong performance in MR direct services, outbound e-detailing, andBCP response services, among others.
The PMS services and medical devices services both recorded significant year-on-year increases in sales, with BPO projects(monitoring MR, logistics management, etc.) in PMS services performing steadily alongside CMR and call center operations
for medical devices.
As a result, in the CSO Business, net sales were ¥6,304 million, an increase of 15.7% year on year, and operating income was¥448 million, an increase of 94.0% year on year.
4) Global Research Business
The Global Research Business comprises EPS International Holdings Co., Ltd. and overseas Group companies. In thissegment, the Group undertakes business primarily in East Asia, including China, and Southeast Asia.
In the Global Research Business, net sales rose 18.3% year on year to ¥3,495 million atop strong progress in current projects
and contribution from newly awarded projects.
Meanwhile, on the earnings front, the Group recorded an operating loss of ¥317 million in the Global Research Business,compared with operating income of ¥247 million in the same period of the previous fiscal year. This loss mainly reflected anincrease in recruitment activities and personnel expenses to continue strengthening the operating structure, and an increase in
the outsourcing ratio to Group companies in Japan.
5) EKISHIN (China) Business
The EKISHIN (China) Business is undertaken by EPS EKISHIN Co., Ltd., EPS (China) Co., Ltd. and other overseas Group
companies.
In the EKISHIN (China) Business, the Group is working to further expand earnings based on the business concept ofproviding specialist trading company functions between Japan and China in the healthcare field. The Group positions
existing sales of medical devices as the core driver of net sales in this segment, along with providing peripheral services suchas pharmaceutical- and investment-related services plus trading company services related to supplies and equipment for basic
non-clinical research.
EPS Holdings, Inc. has entered into a capital and business partnership with SUZUKEN Co., Ltd., and EPS (China) Co., Ltd.
has acquired a Chinese pharmaceutical manufacturer. As a result, the Group will work to strengthen the existing businessplatforms of both companies and their respective groups in China. In addition, the Group aims to create new added value inmedical services, beginning with manufacturing support- and logistics-related services.
In terms of operating results, particularly in pharmaceutical-related services, the abovementioned Chinese pharmaceuticalmanufacturer (Shanghai Hua Xin High Biotechnology Co., Ltd.), which was acquired at the beginning of the fiscal year
under review, posted strong operating results against forecasts. This led to higher net sales and earnings in the China
Business.
On the earnings front, sales of medical devices declined slightly, while newly added pharmaceutical products-related
operations also contributed. As a result, net sales were ¥4,600 million (up 64.7% year on year) with operating income of¥288 million (operating loss of ¥71 million in the same period of the previous fiscal year).

(2) Explanation Concerning Forward-Looking Statements such as Consolidated Financial Forecasts
The Group’s consolidated results are performing well compared with its plans. However, the Group is currently examining
whether or not there is a need to revise its full-year earnings forecast for the fiscal year ending September 2017. The result of
the examination will be disclosed promptly as necessary once it is complete.

32. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets
As of September 30, 2016
(Previous Fiscal Year-End)
AssetsCurrent assets:
Cash and time deposits
Trade notes and accounts receivable
Marketable securities
Merchandise and finished goods
Work in process
Other current assets
Less: Allowance for doubtful accounts
Total current assets
Fixed assets:
Property, plant and equipment
Intangible fixed assets:
Goodwill
Other intangible fixed assets
Total intangible fixed assets
Investments and other assets:
Investment securities
Lease and guarantee deposits
Other investments and other assets
Less: Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

4(¥ millions)
As of June 30, 2017(End of the Third Quarter of
Fiscal 2017)16,027
12,071
599
1,120
2,131
4,429
(47)
36,333

20,137
12,068
252
1,155
2,281
4,352
(51)
40,196

2,886

4,046

6,603
658
7,261

7,404
693
8,098

1,670
1,669
3,612
(905)
6,047
16,19652,530

3,569
1,704
3,049
(898)
7,425
19,57059,766

As of September 30, 2016
(Previous FiscalYear-End)

Liabilities
Current liabilities:
Trade notes and accounts payable
Short-term loans
Current portion of long-term loans receivable
Income taxes payable
Allowance for employees’ bonuses
Provision for loss on order received
Other current liabilities
Total current liabilities
Non-current liabilities:
Long-term debt
Allowance for directors’ and corporate auditors’
retirement benefits
Net defined benefit liability
Asset retirement obligations
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity:
Common stock
Additional paid-in capital
Retained earnings
Treasury common stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation adjustment on investment securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

5(¥ millions)
As of June 30, 2017(End of the Third Quarter of
Fiscal 2017)

1,404
265
774
1,531
2,515
21
6,883
13,395

1,119
265
774
624
1,101
171
7,938
11,994

2,544

1,903

263

304

1,247
460
254
4,770
18,165

1,352
477
421
4,459
16,454

3,888
12,107
19,398(2,014)33,3793,888
13,762
21,795(253)
39,192

(56)
730
(252)
422
563
34,36452,530

245
1,024
(216)
1,052
3,066
43,312
59,766

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(The nine months ended June 30, 2017)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Gain on consumption tax filing
Foreign exchange gains
Other non-operating income
Total non-operating income
Non-operating expenses
Interest expenses
Provision of allowance for doubtful accounts
Foreign exchange losses
Share of loss of entities accounted for using equity
methodOther non-operating expenses
Total non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sales of investment securities
Gain on step acquisitions
Total extraordinary gains
Extraordinary losses:
Loss on sales of shares of subsidiaries and associates
Loss on change in equity
Total extraordinary losses
Income before income taxes
Income taxes
Income tax adjustment
Total income taxes
ProfitProfit attributable to owners of parent
Profit attributable to non-controlling interests

6

The First Nine Months of
Fiscal 2016
(October 1, 2015
to June 30, 2016)
38,187
26,442
11,745
6,791
4,953(¥ millions)
The First Nine Months of
Fiscal 2017
(October 1, 2016
to June 30, 2017)
44,63730,016
14,620
8,307
6,312

28
248
―
143
420

52
―
129
108
290

25
95
3
56

35
―
―
20

19
200
5,174

34
89
6,513

196
48
244

10
―
10

4
95
99
5,319
1,630
498
2,128
3,190
31
3,158

―
153
153
6,370
2,101
431
2,532
3,838
309
3,529

Quarterly Consolidated Comprehensive Income(The nine months ended June 30, 2017)(¥ millions)

The First Nine Months of
Fiscal 2016 (October 1, 2015
to June 30, 2016)
ProfitOther comprehensive income:
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests

7

3,190

The First Nine Months of
Fiscal 2017
(October 1, 2016
to June 30, 2017)
3,838

(28)
(1,052)
11
(125)

302
559
35
47

(1,194)
1,995

944
4,782

2,016
(20)

4,160
622

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Concerning the Going Concern Assumption)
None(Note Concerning Significant Changes in the Amount of Shareholders’ Equity)
On October 18, 2016, EPS EKISHIN Co., Ltd., a consolidated subsidiary of EPS Holdings, Inc. (the Company), received
payment from SUZUKEN Co., Ltd. for a capital increase through a third-party allocation of shares.
On October 18, 2016, the Company disposed of 1,504,000 shares of its treasury stock through a third-party allocation to
SUZUKEN Co., Ltd.
Moreover, the Company acquired 73,000 shares of treasury stock pursuant to a resolution passed by the Board of Directors at
a meeting held on November 18, 2016.
As a result of the above, in the nine months ended June 30, 2017, additional paid-in capital increased by ¥1,655 million andcommon stock for treasury decreased by ¥1,761 million. Consequently, as of June 30, 2017, additional paid-in capital stoodat ¥13,762 million and common stock for treasury stood at ¥253 million.
(Adoption of Special Accounting Treatment for the Preparation of Quarterly Consolidated Financial Statements)
None(Changes in Accounting Policies and Changes in and Restatements of Accounting Estimates)
None(Segment Information)【Segment Information】
I. The First Nine Months of Fiscal 2016 (October 1, 2015 to June 30, 2016)
1. Information Concerning Net Sales and Operating Income for Each Segment(¥ millions)

Net sales
Sales to outside
customers
Inter-segment
sales andtransfers
Total
Segment
operating income

Adjustment(Note 1)

Amountrecorded onquarterly
consolidated
financialstatements

38,187―38,187809

2,271(2,271)

―

2,793

1,010

40,458(2,271)

38,187

(71)

(0)

5,683

(730)

4,953

CRO

SMO

CSO

GlobalResearch
Business

EKISHIN(China)Business

Others19,038

7,822

5,432

2,912

2,780

200

1,318

69

17

41

13

20,357

7,891

5,450

2,954

4,836

440

231

247

Total

Notes 1. Eliminations/Corporate for operating income of ¥(730) million includes intersegment transactions of ¥68 million
and non-attributable corporate expenses not distributed to each segment of ¥(798) million. The main corporate
expenses comprise expenses related to the Company (the holding company).
2. Information Concerning Impairment Loss on Fixed Assets or Goodwill in Each Reportable Segment
In the six months ended March 31, 2017, Sogo Rinsho Holdings Co., Ltd. became a wholly owned subsidiary of theCompany by means of a stock exchange with the Company. As a result, the amount of goodwill in the SMO Businesssegment increased by ¥6,496 million.
The amount of goodwill is a provisional estimate, as the allocation of the acquisition cost has not yet been completed.

8II. The First Nine Months of Fiscal 2017 (October 1, 2016 to June 30, 2017)
1. Information Concerning Net Sales and Operating Income for Each Segment(¥ millions)

CRO

SMO

CSO

GlobalResearch
Business

China
Business

Others

Total

Adjustment(Note 1)

Amountrecorded onquarterly
consolidated
financialstatements

Net sales
Sales to outside
19,564
10,490
6,279
3,484
4,588
229
44,637
44,637―
customers
Inter-segment
sales and
2,072
90
25
11
11
1,041
3,253
(3,253)―transfers
Total
21,637
10,581
6,304
3,495
4,600
1,271
47,890(3,253)
44,637
Segment
5,082
1,495
448
(317)
288
57
7,055
(742)
6,312
operating income
Notes 1. Eliminations/Corporate for operating income of ¥(742) million includes intersegment transactions of ¥27 million
and non-attributable corporate expenses not distributed to each segment of ¥(770) million. The main corporate
expenses comprise expenses related to the Company (the holding company).
2. From the three months ended December 31, 2016, the Domestic CRO, Domestic SMO, and Domestic CSO
segments have been renamed as the CRO Business, SMO Business and CSO Business, respectively.
Segment information for the nine months ended June 30, 2016 is presented based on the revised names of thereportable segments.

2. Notes Concerning Changes in Reportable Segments
From the three months ended December 31, 2016, the Company has changed its method of disclosure for the CPO
section, which had previously been included in the reportable segment “Others,” by including it in the CRO Business. Thischange was made because the main operations of the CPO section had become substantially identical to the CRO Business,as the business model of the CPO section had shifted from BPO (Business Processing Outsourcing) services related topharmaceuticals and healthcare to various services related to the operation and management of clinical research.
Segment information for the nine months ended June 30, 2016 has been prepared based on the reclassified reportablesegments.

3. Information Concerning Impairment Loss on Fixed Assets or Goodwill in Each Reportable Segment
In the three months ended December 31, 2016, EPS (China) Co., Ltd., a consolidated subsidiary of the Company,
acquired the shares of China Genetic Limited. As a result, the amount of goodwill in the EKISHIN (China) Business segment
increased by ¥1,453 million.
The amount of goodwill is a provisional estimate as the allocation of the acquisition cost has not yet been completed.

93. Supplementary Information(1) Orders Received(¥ millions)

New orders
CRO Business
Monitoring
12,828
Data Management
7,926
CRO Others
1,406
CRO Business total
22,161SMO Business
7,820
CSO Business
5,402
Global Research Business
5,069
EKISHIN (China) Business
4,616
Others230
Total
45,300Notes:
1. Figures represent sales prices.
2. The above figures do not include consumption taxes.

The First Nine Months of Fiscal 2017
(October 1, 2016 to June 30, 2017)
YoY (%)
Backlog
140.6
93.8
83.4
115.1
104.8
102.0
174.5
160.2
113.5
119.2

10

20,79917,525
1,726
40,051
16,697
6,018
8,638
108
10
71,523

YoY (%)
119.1
103.1
55.1
106.6
91.8
92.2
152.7
76.8
101.7
105.0