Consolidated Earnings Report for the First Six Months of Fiscal 2017
[Japanese GAAP]May 2, 2017
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Supplementary explanatory materials prepared:
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EPS Holdings, Inc.
First Section, Tokyo Stock Exchange4282
http://www.eps-holdings.co.jp
Yan Hao, Chairman & CEO
Shuzo Orihashi, Director, Executive Corporate Officer
May 12, 2017
June 5, 2017
Yes
Yes (for institutional investors and analysts)(¥ millions are rounded down)
1. Consolidated Results for the First Six Months of Fiscal 2017 (October 1, 2016 to March 31, 2017)(1) Consolidated Operating Results(¥ millions; percentage figures represent year-on-year changes)
Profit attributable toFirst Six Months
Net sales
Operating income
Recurring profit
owners of parent
Fiscal 2017
30,397
18.5%
4,636
22.2%
4,774
21.3%
2,555
1.2%
Fiscal 2016
25,650
16.3%
3,794
55.6%
3,937
57.0%
2,524
156.4%
Note: Comprehensive income: March 31, 2017: ¥ 3,558 million (73.5%), March 31, 2016: ¥2,050 million (32.7%)
First Six Months
Fiscal 2017
Fiscal 2016

Earnings
per share (¥)
55.44
61.06

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

Net assets

March 31, 201760,26242,445September 30, 2016
52,53034,364
Note: Equity: March 31, 2017: ¥39,619 million, September 30, 2016: ¥33,801 million
2.

(¥ millions)
Equity ratio
(%)
65.7
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 yen per share and commemorative
dividend of 2 yen 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 business 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, 2Q end
period (including treasury stock):②Number of treasury stock at end of
period:Fiscal 2017, 2Q end③Average number of stock during theperiod:Fiscal 2017, 1H

46,311,389 Fiscal 2016 end

46,311,389

224,855 Fiscal 2016 end

1,703,017

46,089,496 Fiscal 2016, 1H

41,340,709

Note:
The total number of treasury shares included shares held by the employees’ shareholding trust, specifically 136,600 shares asof September 30, 2016 and 87,700 shares as of March 31, 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(Six months ended March 31, 2017)…………………………………………………………………………………
Quarterly Consolidated Comprehensive Income(Six months ended March 31, 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
8

3. Supplementary Information ……………………………………………………………………………………………… 10(1) Consolidated Statements of Cash Flows (Summary) …………………………………………………………………… 10(2) 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 Six Months Ended March 31, 2017(¥ millions)

Net sales
Operating income
Recurring profit
Profit attributable toowners of parent

First Six Months of Fiscal
2016
Amount%25,650
100
3,794
14.8
3,937
15.4
2,524

First Six Months of Fiscal
2017
Amount%30,397
100
4,636
15.3
4,774
15.7

9.8

2,555

8.4

ChangeAmount
4,747
842
837
30

%
18.5
22.2
21.3
1.2

In the six months ended March 31, 2017, the EPS Group as a whole posted consolidated net sales of ¥30,397 million, an
increase of 18.5% year on year, mainly driven by higher sales across all businesses. Operating income rose by 22.2% year on
year to ¥4,636 million, the highest ever for a six-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)First Six Months First Six Months
Changeof fiscal 2016of fiscal 2017
CRO
Net sales
13,997
14,943946
Operating income
3,613
3,791
177
SMO
Net sales
5,004
7,090
2,086
Domestic
Operating income
419
1,012
592
Business
CSO
Net sales
3,539
4,155
616
Operating income
124
260
136
GlobalNet sales
2,098
2,384
285
Research
Operating loss (income)
219
(152)
(372)
Overseas
China
Net sales
1,869
3,165
1,296
Business
Business
Operating income (loss)
(74)
183
258

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: EPI Japan Co., Ltd. and J-CRSU Co., Ltd.
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 forecast due to delays in securing resources, while operating income waslargely in line with forecast. 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 ¥14,943 million, an increase of 6.8% year on year, and operating income
was ¥3,791 million, an increase of 4.9% year on year.
2) SMO Business
The SMO Business is undertaken by EP-SOGO Co., Ltd. and Sogo Rinsho Médéfi Co., Ltd.
2

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 progresson 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 six months ended March 31, 2017.
As a result, in the SMO Business, net sales rose sharply by 41.7% year on year to ¥7,090 million. Operating income was¥1,012 million, a significant increase of 141.3% 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), performance was mostly flat due to a large
number of small projects and the absence of any new large drug projects. Meanwhile, in the pharmaceutical call center
division, the Group posted higher sales owing to strong growth in MR Direct services and other operations.
There has been an increasing trend in BPO projects (monitoring MR, logistics management, etc.) in PMS services frompharmaceutical companies, therefore the number of BPO projects in the PMS division rose significantly year on year.
CMR services for medical devices also trended firmly, along with substantial growth in call center operations for medical
devices, leading to an increase in net sales.
As a result, in the CSO Business, net sales increased by 17.4% year on year to ¥4,155 million, and operating income rose by
109.6% to ¥260 million.
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 13.6% year on year to ¥2,384 million. This increase was mainly due to steadyprogress on projects currently under way, along with a positive contribution from newly awarded projects.
Meanwhile, on the earnings front, the Group recorded an operating loss of ¥152 million in the Global Research Business,compared with operating income of ¥219 million in the same period of the previous fiscal year. This loss mainly reflected anincrease in recruitment activities and personnel expenses to strengthen the operating structure, and an increase in theoutsourcing 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 EKISHIN(China) Business.
As a result, in the EKISHIN (China) Business, the Group posted net sales of ¥3,165 million, an increase of 69.4% year on
year. Operating income was ¥183 million, compared with an operating loss of ¥74 million in the same period of the previous
fiscal year.

(2) Explanation Concerning Forward-Looking Statements such as Consolidated Financial Forecasts
There have been no changes to the consolidated financial forecasts announced in the financial report for the fiscal year ended
September 30, 2016 issued on November 8, 2016.
For details, please see the press release titled “Revision of the Business Result Forecast,” which was announced today.

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 March 31, 2017(End of the First Six Months)

16,027
12,071
599
1,120
2,131
4,429
(47)
36,333

19,626
13,213
546
1,122
1,936
4,049
(51)
40,444

2,886

3,915

6,603
658
7,261

7,757
697
8,454

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

3,651
1,681
3,012
(898)
7,446
19,81760,262(¥ millions)

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

As of September 30, 2016
(Previous Fiscal
Year-End)As of March 31, 2017(End of the First Six Months)

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

1,081
265
774
1,794
2,305
152
6,847
13,219

2,544

2,096

263

289

1,247
460
254
4,770
18,165

1,307
464
438
4,596
17,816

3,888
12,107
19,398(2,014)33,3793,888
13,762
21,283(271)
38,662

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

207
979
(229)
957
2,825
42,44560,262

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(For the six months ended March 31, 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 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

First Six Months of fiscal
2016(October 1, 2015
to March 31, 2016)
25,65017,443
8,206
4,412
3,794

(¥ millions)First Six Months of fiscal
2017(October 1, 2016
to March 31, 2017)
30,397
20,248
10,149
5,512
4,636

24
193
―
113
331

20
―
108
69
199

17
95
27
37

29
―
―
13

10
188
3,937

18
61
4,774

196
48
244

―
―
―

―
―
4,182
1,576
66
1,643
2,539
14
2,524

153
153
4,621
1,792
62
1,854
2,766
211
2,555

Quarterly Consolidated Comprehensive Income(Second quarter, for the six months ended March 31)(¥ millions)

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

First Six Months of fiscal
2016(October 1, 2015
to March 31, 2016)
2,539

First Six Months of fiscal
2017(October 1, 2016
to March 31, 2017)
2,766

(23)
(423)
12
(54)

264
453
22
51

(488)
2,050

791
3,558

2,058
(7)

3,091
467

(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 six months ended March 31, 2017, additional paid-in capital increased by ¥1,655 million andcommon stock for treasury decreased by ¥1,743 million. Consequently, as of March 31, 2017, additional paid-in capital stoodat ¥13,762 million and common stock for treasury stood at ¥271 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. First Six Months of Fiscal 2016 (October 1, 2015 to March 31, 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 financial
statements

25,650―25,650554

1,548(1,548)

―

1,869

689

27,198(1,548)25,650

(74)

(0)

4,302

(508)

3,794

CRO

SMO

CSO

GlobalResearch
Business

13,108

4,953

3,526

2,068

1,859

134

889

51

13

30

9

13,997

5,004

3,539

2,098

3,613

419

124

219

EKISHIN(China)Business

Others

Total

Notes 1. Eliminations/Corporate for operating income of ¥(508) million includes intersegment transactions of ¥44 million
and non-attributable corporate expenses not distributed to each segment of ¥(553) 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. First Six Months of Fiscal 2017 (October 1, 2016 to March 31, 2017)
1. Information Concerning Net Sales and Operating Income for Each Segment(¥ millions)

CRO

SMO

CSO

GlobalResearch
Business

EKISHIN(China)Business

Others

Total

Adjustment(Note 1)

Amountrecorded onquarterly
consolidated
financialstatements

Net sales
Sales to outside
13,530
7,066
4,134
2,373
3,157
135
30,39730,397―
customers
Inter-segment
sales and
1,413
24
21
10
8
707
2,185
(2,185)―transfers
Total
14,943
7,090
4,155
2,384
3,165
843
32,583(2,185)30,397
Segment
39
3,791
1,012
260
(152)
183
5,135
(498)
4,636
operating income
Notes 1. Eliminations/Corporate for operating income of ¥(498) million includes intersegment transactions of ¥18 million
and non-attributable corporate expenses not distributed to each segment of ¥(516) 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 six months ended March 31, 2016 are 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 six months ended March 31, 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 ¥1,528 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) Consolidated Statements of Cash Flows (Summary)

Ⅰ Cash flows from operating activities
Ⅱ Cash flows from investing activities
Ⅲ Cash flows from financing activities
Ⅳ Effect of exchange rate changes on cash andcash equivalents
Ⅴ Increase in cash and cash equivalents
Ⅵ Cash and cash equivalents at beginning ofquarter
Ⅶ Cash and cash equivalents at end of quarter
Depreciation
Amortization of goodwill

First Six Months of Fiscal 2016
(October 1, 2015
to March 31, 2016)
2,481
(250)
(468)

(¥ millions)First Six Months of Fiscal 2017
(October 1, 2016
to March 31, 2017)
2,779(3,017)
3,501

(137)

289

1,624

3,553

14,692

16,607

17,430268
288

20,160372560(2) Orders Received(¥ millions)

New orders
CRO business
Monitoring
7,353
Data Management
4,931
CRO Others998
CRO business total
13,283
SMO business
5,359
CSO business
3,789
Global research business
4,676
China business
3,115
Others134
Total
30,359Notes:
1. Figures represent sales prices.
2. The above figures do not include consumption taxes.

First Six Months of Fiscal 2017
(October 1, 2016 to March 31, 2017)
YoY (%)
Backlog
102.3
95.7
106.2
100.0
121.7
127.7
203.0
156.0
99.3
121.0

10

18,827
16,547
1,833
37,20817,660
6,550
9,355
38
9
70,822

YoY (%)
100.4
105.5
59.2
99.1
98.1
107.2
158.5
21.5
109.0
104.6