Consolidated Earnings Report for the First Nine Months of Fiscal 2018
[Japanese GAAP]
August 1, 2018
Company Name:
Stock Listing:Code Number:
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Filing of Quarterly Securities Report:
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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 13, 2018
－
None
None

(¥ millions are rounded down)
1. Consolidated Results for the First Nine Months of Fiscal 2018 (October 1, 2017 to June 30, 2018)(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 2018
48,462
8.6%
5,488(13.1)%
5,667(13.0)%
3,447(2.3)%
Fiscal 2017
44,637 16.9%
6,312
27.4%
6,513
25.9%
3,529
11.7%
Note: Comprehensive income: June 30, 2018: ¥3,613 million [(24.5)%], June 30, 2017: ¥4,782 million [139.6%]
First Nine Months
Fiscal 2018
Fiscal 2017

Earnings
per share (¥)
74.88
76.57

Net income
per share (diluted) (¥)－－(2) Consolidated Financial Position(¥ millions)
Equity ratio
Total assets
Net assets(%)
June 30, 2018
64,104
46,25667.2
September 30, 2017
64,34544,86265.0
Note: Equity: June 30, 2018: ¥43,056 million, September 30, 2017: ¥41,818 million
2.

Dividends
First Quarter

Dividend per share (¥)
Second Quarter
Third Quarter
10.00
－
12.00
－

Year End
20.00

Full Year
30.00

13.00

25.00

Fiscal 2017－
Fiscal 2018－
Fiscal 2018 (forecast)
Notes: 1. Revisions to recent dividend forecasts: None
2. The year-end dividend for fiscal 2017 includes a special dividend of 8 yen per share.
3.

Forecast of Consolidated Results for Fiscal 2018 (October 1, 2017 to September 30, 2018)(¥ millions; percentage figures represent year-on-year changes)
Profit attributable toProfitNet sales
Operating income
Recurring profit
owners of parent
per share (¥)
Full year
66,000 9.1%
6,850(9.8)%
7,000 (10.4)%
4,200(9.9)%
91.06
Note: Revisions to recent consolidated results forecasts: None

*Notes(1) Changes to important subsidiaries during the first nine months changes in specified subsidiaries resulting in revised scopeof consolidation: None
(2) Application of special accounting methods in the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting principles, accounting estimates and restatements
a. Changes in accounting policies in conjunction with revisions to accounting standards: Noneb. Other changes: Nonec. Changes in accounting estimates: None
d. Restatements: None
(4) Number of shares issued (common stock)a. Number of shares issued at end of
Fiscal 2018, 3Q end
period (including treasury stock):

46,311,389 Fiscal 2017 end

46,311,389

b. Number of treasury stock at end of
Fiscal 2018, 3Q end
period:593,181 Fiscal 2017 end

186,899

46,046,404 Fiscal 2017, 3Q

46,092,005

c. Average number of stock during the
Fiscal 2018, 3Q
period:Note: Number of treasury shares at the end of period includes 47,600 shares of the Company held by the employees’
shareholding trust as of September 30, 2017. Since the employees’ shareholding trust sold all of its shares during thethird quarter of the fiscal year ending September 30, 2018, as of June 30, 2018 there are no shares held in the trust.
* This financial report is outside the scope of the quarterly audit reviews performed by certified public accountants or
auditing firms.
* 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……………………

22
4

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, 2018)……………………………………..…………………………………….
Quarterly Consolidated Comprehensive Income(The nine months ended June 30, 2018) ……………………………………………………………………………
(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Concerning the Going Concern Assumption) ……………………………………………………………….
(Note Concerning Significant Changes in the Amount of Shareholders’ Equity) …………………………..………
(Segment Information) ………………………………………………………………………………………………

5
5
7
7
8
9
9
9

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, 2018(¥ millions)
The First Nine Months of
Fiscal 2017
Amount%The First Nine Months of
Fiscal 2018
Amount%ChangeAmount%Net sales

44,637100.0

48,462

100.0

3,825

8.6

Operating income

6,312

14.1

5,488

11.3

(824)

(13.1)

Recurring profit

6,513

14.6

5,667

11.7

(845)

(13.0)

Profit attributable toowners of parent

3,529

7.9

3,447

7.1

(81)

(2.3)

In the nine months ended June 30, 2018, the EPS Group as a whole posted consolidated net sales of ¥48,462 million, an
increase of 8.6% year on year, mainly from sales increases in the CRO Business and Overseas Business. These were partially
offset by a decline in sales in the SMO Business and CSO Business, which fell back after a strong performance in theprevious fiscal year. Meanwhile, consolidated operating income was ¥5,488 million, down 13.1% year on year due to theimpact of the fall back from a strong performance in the previous fiscal year in the SMO Business. Both net sales and profit
progressed largely in line with the consolidated forecasts for the EPS Group as a whole.
Operational segment are outlined as follows.
Segment Overview
The Group primarily operates businesses in the following five segments (three domestic segments and two overseas
segments).
(¥ millions)
The First Nine
The First Nine
Months of fiscal
Months of fiscal
Change20172018
Net sales
21,63722,769
1,132
CRO
Operating income
5,082
5,115
33
Domestic
Net sales
10,581
10,464(116)
SMO
Business
Operating income
1,495
738
(756)
Net sales
6,304
5,859
(444)
CSO
Operating income
448
297
(151)
Overseas
Business

GlobalResearch

Net sales
Operating income (loss)

3,495
(317)

3,686
111

191
428

EKISHIN(China)Business

Net sales
Operating income

4,600
288

8,091
66

3,491
(222)

2

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. Clinical research services: EP- CRSU Co., Ltd. and Sogo Rinsho Médéfi Co., Ltd.
c. On-site CRO services: EPMate Co., Ltd.
d. Pharmaceutical and medical IT services: e-Trial Co., Ltd.
Looking at performance by service, in clinical study services, net sales and operating income both made steady progressagainst forecasts, supported mainly by measures to strengthen management of overall clinical development and to promote
the integration of internal management systems. In PMS and related services, net sales were higher than in the same period of
the previous fiscal year, but operating income was slightly lower than forecast as the start-up of a new business required
more resources than expected. In clinical research services, net sales and operating income both increased year on year due tofavorable progress on contract-based projects. In on-site CRO services, net sales and operating income both trended firmly as
resources were secured as planned. In pharmaceutical and medical IT services, net sales and operating income both
performed solidly.
As a result, in the CRO Business, net sales were ¥22,769 million, an increase of 5.2% year on year, and operating income
was ¥5,115 million, an increase of 0.7% year on year.
2) SMO Business
The SMO Business is undertaken primarily by EP-SOGO Co., Ltd. and EXAM Co., Ltd.
EP-SOGO Co., Ltd. converted EXAM Co., Ltd. into a wholly owned subsidiary on October 2, 2017 and absorbed it bymerger on July 1, 2018.
In this business, the Group has achieved steady progress on integration with EXAM Co., Ltd. The Group worked tostrengthen the project management system and bolster the sales structure through such means as fully expanding
proposal-based sales activities. Efforts were also made to enhance the quality control system. However, in terms of results,
the Group recorded declines in sales and income, mainly reflecting the impact of the sluggish growth of planned orders.
As a result, in the SMO Business, net sales were ¥10,464 million, a decrease of 1.1% year on year, and operating income was¥738 million, a decrease of 50.6% year on year.
3) CSO Business
The CSO Business is undertaken by EP-PharmaLine Co., Ltd.
Amid an ongoing slump in demand for MRs in the pharmaceutical industry, the Group took steps to strengthen new businesscreation and its sales systems, while working to manage costs and reduce expenses. However, sales and profits declined year
on year to the significant effect on CMR (Contract Medical Representative) services for pharmaceuticals and PMS services.
As a result, in the CSO Business, net sales were ¥5,859 million, a decrease of 7.1% year on year, and operating income was¥297 million, a decrease of 33.7% year on year.
4) Global Research Business
The Global Research Business comprises EPS International Holdings Co., Ltd. and overseas Group companies.
In the Global Research Business, net sales rose 5.5% year on year to ¥3,686 million atop strong progress on current projects
and a contribution from newly awarded major projects. On the earnings front, the Group recorded operating income of ¥111
million in the Global Research Business, compared with an operating loss of ¥317 million in the same period of the previous
fiscal year. This return to profitability reflected a positive contribution from the effect of the integration of management
departments, in addition to the increase in net sales. The CRO business and related services in China have been managed
under the control of the EKISHIN (China) Business from the fiscal year ending September 30, 2018.
5) EKISHIN (China) Business
The EKISHIN (China) Business comprises the two regional holding companies EPS EKISHIN Co., Ltd. and EPS (China)
Co., Ltd., and related overseas Group companies.
In the EKISHIN (China) Business, the Group provides five types of services, specifically, product-related services centeredon pharmaceuticals and medical devices, specialized services related to clinical trials, investment-related services,international trading-related services and peripheral support services. The Group is working to further expand earnings as a
specialist trading company in the healthcare industry linking Japan and China.
The Group is expanding collaboration with business partners through initiatives such as setting up a joint venture with thegroup asset management firm of Shandong Buchang Pharmaceuticals Co., Ltd., a major Chinese pharmaceuticalmanufacturer, in addition to entering into a solid capital and business partnership with SUZUKEN CO., LTD. Through thesecollaborations, the Group is working to upgrade and expand its operating foundation and create new added value.
In specialized services, the Group is rebuilding the CRO service inside China, which had been struggling in terms ofoperating results, through a strategic alliance with Hangzhou Tigermed Consulting Co., Ltd., one of China’s largest clinicalCROs.
3In terms of operating results, net sales and profits both performed steadily versus the plan, as continuous measures to step up
the development of existing markets and cultivate new regional markets in pharmaceutical-related product services from thefirst half contributed to earnings. Since the fiscal year ending September 30, 2018, the amount of sales has been increasing at
Shanghai Hua Xin High Biotechnology Co., Ltd. in product-related services due to a change in distribution processes in
China.
As a result, net sales were ¥8,091 million, up 75.9% year on year, and operating income was ¥66 million, down 76.9% year
on 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, 2017 issued on November 7, 2017.

4

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets
As of September 30, 2017
(Previous Fiscal Year-End)
AssetsCurrent assets:
Cash and time deposits
Notes and accounts receivable - tradeMarketable 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

5(¥ millions)
As of June 30, 2018(End of the First Nine Months)

22,773
13,119
662
1,052
1,756
4,711
(52)
44,023

18,873
14,810
1,167
963
1,937
4,516
(51)
42,218

4,145

4,071

7,107
726
7,834

6,884
697
7,581

4,039
1,704
3,496
(898)
8,342
20,32264,345

5,495
1,809
3,827
(898)
10,233
21,886
64,104(¥ millions)

Liabilities
Current liabilities:
Notes and accounts payable - trade
Short-term loans
Current portion of long-term loans payable
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:
Capital stock
Additional paid-in capital
Retained earnings
Treasury common stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income:
Valuation difference on available-for-sale 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

As of September 30, 2017
(Previous Fiscal Year-End)As of June 30, 2018(End of the First Nine Months)

1,120
65
774
1,905
2,840
215
8,365
15,287

362
65
699
238
1,228
221
10,832
13,648

1,660

1,154
412

320

6

1,245
497
472
4,195
19,483

1,414
525
692
4,199
17,8483,888
13,451
23,437(230)
40,545

3,888
13,601
25,407(1,167)
41,729

372
1,007
(107)
1,272
3,043
44,86264,345

651
838
(163)
1,327
3,199
46,256
64,104

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(The nine months ended June 30, 2018)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividend income
Foreign exchange gains
Subsidy income
Other non-operating income
Total non-operating income
Non-operating expenses:
Interest expenses
Foreign exchange losses
Other non-operating expenses
Total non-operating expenses
Recurring profit
Extraordinary gains:
Gain on sales of investment securities
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 non-controlling interests
Profit attributable to owners of parent

7

First Nine Months of
Fiscal 2017
(October 1, 2016
to June 30, 2017)
44,63730,016
14,6208,307
6,312(¥ millions)First Nine Months of
Fiscal 2018
(October 1, 2017
to June 30, 2018)
48,462
31,182
17,279
11,790
5,488

52
31
129
7
69
290

35
52
75
126
289

35
54
89
6,513

14
77
19
110
5,667

10
10

-

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

5,667
1,435
631
2,067
3,600
152
3,447

Quarterly Consolidated Comprehensive Income(The nine months ended June 30, 2018)

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

8

First Nine Months of
Fiscal 2017
(October 1, 2016
to June 30, 2017)
3,838(¥ millions)First Nine Months of
Fiscal 2018
(October 1, 2017
to June 30, 2018)
3,600

302
559
35

279
(210)
(56)

47

0

944
4,782

12
3,613

4,160

3,502

622

110

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Concerning the Going Concern Assumption)
None(Note Concerning Significant Changes in the Amount of Shareholders’ Equity)
The Company acquired 451,200 of its own shares in accordance with a resolution of the Board of Directors on March 27,
2018.
As a result, treasury shares increased by ¥936 million over the nine-months ended June 30, 2018, to stand at ¥1,167 million
as of June 30, 2018.
(Segment Information)【Segment Information】
I. 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

EKISHIN(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.

II. The First Nine Months of Fiscal 2018 (October 1, 2017 to June 30, 2018)
1. Information Concerning Net Sales and Operating Income for Each Segment(¥ millions)

CRO

SMO

CSO

GlobalResearch
Business

EKISHIN(China)Business

Others

Total

Adjustment(Note)

Amountrecorded onquarterly
consolidated
financialstatements

Net sales
Sales to outside
20,46910,416
5,785
3,675
7,949
166
48,462―
48,462
customers
Inter-segment
sales and
2,300
48
74
11
142
1,067
3,645
(3,645)―transfers
Total
22,76910,464
5,859
3,686
8,091
1,234
52,108(3,645)48,462
Segment
5,115
738
297
111
66
59
6,388
(899)
5,488
operating income
Note: Eliminations/Corporate for operating income of ¥(899) million includes intersegment transactions of ¥35 million
and non-attributable corporate expenses not distributed to each segment of ¥(935) million. The main corporate
expenses comprise expenses related to the Company (the holding company).

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

New orders
CRO Business
19,645
SMO Business
10,328CSO Business
5,345
Global Research Business
3,760
EKISHIN (China) Business
7,639
Others163
Total
46,882
Notes: 1. Figures represent sales prices.
2. The above figures do not include consumption taxes.

The First Nine Months of Fiscal 2018
(October 1, 2017 to June 30, 2018)
YoY (%)
Backlog
88.4
39,376133.0
17,870
98.9
7,959
75.1
8,719
163.2
262
71.1
8
103.5
74,196

10

YoY (%)
97.8
108.4
132.3
107.2
42.9
77.0
103.7