Consolidated Earnings Report for the First Three Months of Fiscal 2019
[Japanese GAAP]
February 1, 2019
Company Name:
Stock Listing:Code Number:
URL:
Representative Director:
Inquiries:
Tel:
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
Kazuki Sekitani, Director, Managing Corporate Officer+81-3-5684-7873
February 12, 2019
－
None
None

(¥ millions are rounded down)
1. Consolidated Results for the First Three Months of Fiscal 2019 (October 1, 2018 to December 31, 2018)(1) Consolidated Operating Results(¥ millions; percentage figures represent year-on-year changes)
Profit attributable toFirst Three Months
Net sales
Operating income
Recurring profit
owners of parent
Fiscal 2019
16,1622.5%
1,571 (12.2)%
1,586(16.1)%
1,172(7.0)%
Fiscal 201815,7648.6%
1,790(4.6)%
1,891(8.1)%
1,260
43.9%
Note: Comprehensive income: December 31, 2018: ¥1,093 million [(35.7)%], December 31, 2017: ¥1,702 million [(21.7)%]
First Three Months

Profitper share (¥)

Fiscal 2019
Fiscal 2018

25.78
27.33

Profitper share (diluted) (¥)－－(2) Consolidated Financial Position(¥ millions)
Equity ratio
Total assets
Net assets(%)
December 31, 2018
64,33947,38468.6
September 30, 2018
65,40546,743
66.6
Notes: 1. Equity: December 31, 2018: ¥44,159 million, September 30, 2018: ¥43,534 million
2. The Company has adopted “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.”(Accounting Standards Board of Japan (ASBJ) Statement No. 28, February 16, 2018) from the beginning of thethree months ended December 31, 2018. Accordingly, the Company has retroactively applied these amendments tototal assets and the equity ratio for the fiscal year ended September 2018.
2.

Dividends
First Quarter

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

Year End
Fiscal 2018－
17.00
Fiscal 2019－
Fiscal 2019 (forecast)
13.00
－
15.00
Notes: 1. Revisions to recent dividend forecasts: None
2. The year-end dividend for fiscal 2018 includes a special dividend of ¥4 per share.

Full Year
29.00
28.00

3.

Forecast of Consolidated Results for Fiscal 2019 (October 1, 2018 to September 30, 2019)(¥ millions; percentage figures represent year-on-year changes)
Profit attributable toProfitNet sales
Operating income
Recurring profit
owners of parent
per share (¥)
Full year
72,000 9.5%
7,200
0.1%
7,350
(1.2)%
4,700
7.1%
102.39Notes: 1. Revisions to recent consolidated results forecasts: None
2. The Company allotted 642,000 shares of treasury stock to the shareholders of All Right Technology Inc. as
consideration for a share exchange to convert All Right Technology Inc. into a wholly owned subsidiary on theeffective date of November 1, 2018. As a result, profit per share in the forecasts of consolidated results for the year
ending September 30, 2019 has been calculated based on the number of shares reflecting the aforementioned shareexchange.
*Notes(1) Changes to important subsidiaries during the first three months changes in specified subsidiaries resulting in revised
scope of 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 2019, 1Q end
period (including treasury stock):

46,311,389 Fiscal 2018 end

46,311,389

b. Number of treasury stock at end of
Fiscal 2019, 1Q end
period:953,153 Fiscal 2018 end

1,049,754

45,476,799 Fiscal 2018, 1Q

46,133,577

c. Average number of stock during the
Fiscal 2019, 1Q
period:* 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 ········································· 2(1) Explanation Regarding Consolidated Operating Results ········································································ 2(2) Explanation Concerning Forward-Looking Statements such as Consolidated Financial Forecasts ························ 4
2. Quarterly Consolidated Financial Statements ·························································································· 5(1) Quarterly Consolidated Balance Sheets···························································································· 5(2) Quarterly Consolidated Statements of Income and Comprehensive Income·················································· 7
Quarterly Consolidated Statements of Income(The three months ended December 31, 2018) ··············································································· 7
Quarterly Consolidated Comprehensive Income(The three months ended December 31, 2018) ··············································································· 8(3) Notes Concerning Quarterly Consolidated Financial Statements ······························································ 9(Notes Concerning the Going Concern Assumption) ·········································································· 9(Note Concerning Significant Changes in the Amount of Shareholders’ Equity) ·········································· 9(Segment Information) ············································································································· 9(Important Subsequent Events) ·································································································· 10

11. Qualitative Information Concerning Quarterly Financial Statements and Other Matters(1) Explanation Regarding Consolidated Operating Results
Overview of Operating Results for the Three Months Ended December 31, 2018(¥ millions)
The First Three Months of
Fiscal 2018
Amount%The First Three Months of
Fiscal 2019
Amount%ChangeAmount%Net sales

15,764100.0

16,162

100.0

398

2.5

Operating income

1,790

11.4

1,571

9.7

(219)

(12.2)

Recurring profit

1,891

12.0

1,586

9.8

(304)

(16.1)

Profit attributable toowners of parent

1,260

8.0

1,172

7.3

(88)

(7.0)

Forward-looking statements contained in this document are based on a judgment of operating results for the three months
ended December 31, 2018.
In the three months ended December 31, 2018, the EPS Group posted consolidated net sales of ¥16,162 million, an increaseof 2.5% year on year, mainly driven by higher sales in the EKISHIN (China) Business. Consolidated operating income
declined by 12.2% year on year to ¥1,571 million, mainly due to a high profit margin on favorable projects in the previous
fiscal year in the CRO Business. Meanwhile, both net sales and profit progressed largely in line with consolidated forecasts.
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 Three
The First Three
Months of fiscal
Months of fiscal
Change2018
2019
Net sales
7,372
7,282
(89)
CRO
Operating income
1,934
1,352
(581)
Domestic
Net sales
3,507
3,470
(36)
SMO
Business
Operating income
221
477
256
Net sales
1,933
1,952
18
CSO
Operating income
69
99
30
Overseas
Business

GlobalResearch

Net sales
Operating income (loss)

1,211
5

978
(57)

(232)
(63)

EKISHIN(China)Business

Net sales
Operating income (loss)

2,561
(170)

3,149
77

587
248

2

1) CRO BusinessIn the CRO Business, the Group conducts operations mainly 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.
c. On-site CRO services: EPMate Co., Ltd.
d. Pharmaceutical and medical IT services: e-Trial Co., Ltd. and All Right Technology Inc.
Looking at performance in the CRO Business by service, in clinical study services, net sales and operating income both
surpassed forecasts, supported mainly by measures to strengthen management of clinical development as a whole and topromote the integration of internal management systems. In PMS and related services, net sales and operating income wereboth higher than forecast. In clinical research services, results were as forecast. In on-site CRO services, net sales fell short of
the forecast due to delays in securing resources but operating income trended firmly due to appropriate management of costs.
These results meant net sales were ¥7,282 million, a decrease of ¥89 million, or 1.2%, year on year, and operating income
was ¥1,352 million, a decrease of ¥581 million, or 30.1%, year on year, due to a high profit margin on favorable projects andsome projects being advanced in the previous fiscal year.
2) SMO Business
The SMO Business is undertaken by EP-SOGO Co., Ltd.
EP-SOGO Co., Ltd. converted EXAM Co., Ltd. into a wholly owned subsidiary on October 2, 2017 and conducted anabsorption-type merger with EXAM Co., Ltd. as the absorbed company on July 1, 2018. In this business, the Group worked
to strengthen the project management system and enhance business performance by bolstering the sales structure throughsuch means as fully expanding proposal-based sales activities. Efforts were also made to enhance the quality control system.
As a result, in the SMO Business, net sales were down ¥36 million to ¥3,470 million, a decrease of 1.0% year on year.
Operating income was ¥477 million, a significant increase of ¥256 million, or 115.7%, year on year, as higher earnings arosefrom cost-cutting measures such as the promotion of appropriate allocation following the integration with EXAM Co., Ltd.
3) CSO Business
The CSO Business is undertaken by EP-PharmaLine Co., Ltd. and ES-Link Co., Ltd.
In CMR (Contract Medical Representative) services for pharmaceuticals, performance was largely in line with forecasts
across all CMR services for pharmaceuticals, the pharmaceutical call center service, BPO services and CMR services for
medical devices, though there was no change in the improvements for the CMR services for pharmaceuticals environment.
Established on October 1, 2018 as a joint venture by the Group and SUZUKEN Co., Ltd., ES-Link Co., Ltd., which aims tocreate new added value through the fusion of marketing specialists (MS) and call centers with BPO, has attracted manyinquiries and is projected to advance smoothly.
As a result, net sales were ¥1,952 million, an increase of ¥18 million, or 1.0%, year on year, and operating income was ¥99
million, an increase of ¥30 million, or 44.5%, year on year.
4) Global Research Business
The Global Research Business comprises EPS International Holdings Co., Ltd. and its overseas group companies.
In the Global Research Business, the Group is laying solid foundations for business in the Asia-Pacific region, strengthening
sales and enhancing its reinforcement of administrative operations, as well as rigorously managing costs and aiming forstable performance. A convergence of large-scale projects resulted in net sales of ¥978 million, a decrease of ¥232 million, or
19.2%, year on year, and the impact of transferring the CRO business and related services that had been conducted by the
EKISHIN (China) Business in the previous year caused an operating loss of ¥57 million compared to operating income of ¥5
million in the previous fiscal year.
5) EKISHIN (China) Business
The EKISHIN (China) Business is undertaken by the two regional holding companies EPS EKISHIN Co., Ltd. and EPS(China) Co., Ltd., as well as related Group companies in China.
In the EKISHIN (China) Business, under a solid capital and business partnership with SUZUKEN Co., Ltd., the Group
provides four types of services, specifically product-related services centered on pharmaceuticals and medical devices,
investment-related service, international trading-related service and peripheral support service. The Group is working tofurther expand earnings as a specialist trading company in the healthcare industry linking Japan and China.
In the product-related services, a contribution to increased earnings was made through the continuous development ofexisting markets and cultivation of new regional markets.
As a result, from a performance aspect, net sales were ¥3,149 million, up ¥587 million, or 22.9%, year on year, and operating
income was ¥77 million compared to an operating loss of ¥170 million in the previous fiscal year.

3(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, 2018 issued on November 7, 2018.

4

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets
As of September 30, 2018
(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 December 31, 2018(End of the First Three
Months)17,857
15,746
1,357
849
1,473
3,094
(51)
40,326

17,352
14,922
1,214
850
1,795
3,748
(51)
39,833

4,892

4,903

6,629
773
7,402

7,459
837
8,297

5,999
1,867
5,815
(898)
12,78425,07865,405

5,079
1,873
5,250
(898)
11,30524,50664,339(¥ millions)

Liabilities
Current liabilities:
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

6

As of September 30, 2018
(Previous Fiscal Year-End)As of December 31, 2018(End of the First Three Months)

456
65
602
1,251
2,732
242
9,237
14,587

443
65
643
161
1,132
195
10,401
13,043

918

847

453

421

1,428
556
716
4,073
18,661

1,389
570
681
3,911
16,954

3,888
13,601
26,347(2,167)
41,6703,888
13,69026,750(1,880)42,448

1,012
861
(9)
1,864
3,209
46,74365,405

941
774
(5)
1,710
3,225
47,38464,339(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(The three months ended December 31, 2018)(¥ millions)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income:Interest income
Dividend income
Gain on insurance cancellation
Foreign exchange gains
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
Gain on step acquisitions
Total extraordinary gains
Profit (loss) before income taxes
Income taxes
Income tax adjustment
Total income taxes
ProfitProfit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

7

First Three Months of
Fiscal 2018
(October 1, 2017
to December 31, 2017)15,764
10,037
5,727
3,936
1,790

First Three Months of
Fiscal 2019
(October 1, 2018
to December 31, 2018)
16,162
10,055
6,107
4,536
1,571

9
23
16
18
45
113

27
23
27
－
7
85

5
－
7
12
1,891

3
57
9
70
1,586

－
－
－
1,891
140
511
652
1,239
(21)
1,260

256
198
454
2,040
73
659
733
1,307
134
1,172

Quarterly Consolidated Comprehensive Income(The three months ended December 31, 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 Three Months of
Fiscal 2018
(October 1, 2017
to December 31, 2017)
1,239(¥ millions)First Three Months of
Fiscal 2019
(October 1, 2018
to December 31, 2018)
1,307

339
114
6

(70)
(146)
3

2

0

463
1,702

(213)
1,093

1,671

1,018

30

75

(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 implemented a share exchange of 642,000 shares of treasury stock for the shareholders of All Right
Technology Inc. to convert All Right Technology Inc. into a wholly owned subsidiary on the effective date of November 1,
2018.
The Company acquired 452,300 of its own shares in accordance with a resolution of the Board of Directors on March 27,
2018.
As a result, treasury shares decreased by ¥286 million during the three months ended December 31, 2018, to stand at ¥1,880
million as of December 31, 2018.
(Segment Information)【Segment Information】
I. The First Three Months of Fiscal 2018 (October 1, 2017 to December 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)

Amount recorded onquarterly
consolidated
financial statements

Net sales
Sales to outside
6,586
3,463
1,906
1,211
2,536
61
15,764－
15,764
customers
Inter-segment
sales and
786
44
27
－
25
341
1,224
(1,224)－transfers
Total
7,372
3,507
1,933
1,211
2,561
402
16,989(1,224)
15,764
Segment
1,934
221
69
5
(170)
17
2,077
(286)
1,790
operating income
Note: Eliminations/Corporate for operating income of ¥(286) million includes intersegment transactions of ¥12 million andnon-attributable corporate expenses not distributed to each segment of ¥(298) million. The main corporate expenses
comprise expenses related to the Company (the holding company).
II. The First Three Months of Fiscal 2019 (October 1, 2018 to December 31, 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)

Amount recorded onquarterly
consolidated
financial statements

Net sales
Sales to outside
6,623
3,443
1,929
962
3,142
61
16,162－
16,162
customers
Inter-segment
sales and
659
26
23
16
7
417
1,150
(1,150)－transfers
Total
7,282
3,470
1,952
978
3,149
478
17,313(1,150)16,162
Segment
1,352
477
99
(57)
77
2
1,952
(381)
1,571
operating income
Note: Eliminations/Corporate for operating income of ¥(381) million includes intersegment transactions of ¥8 million andnon-attributable corporate expenses not distributed to each segment of ¥(389) 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 three months ended December 31, 2018, All Right Technology Inc. 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 CRO Businesssegment increased by ¥1,164 million.
9

(Important Subsequent Events)
Purchase of treasury shares
At a Board of Directors meeting held on February 1, 2019, the Company resolved matters pertaining to the purchase oftreasury stock pursuant to the provisions of Article 156 of the Companies Act, which replaces the provisions of Article 165,
Paragraph 3 of the Companies Act.
1. Reason for purchase of treasury stock
To substantiate shareholder returns, enhance capital efficiency and implement capital policies that respond flexibly tochanges in the management environment.
2. Details of acquisition(1) Type of stock acquired
Common shares of the Company(2) Total number of shares acquired
1,350,000 shares (maximum)(3) Total market capitalization of acquired shares¥2,500 million (maximum)(4) Acquisition period
February 4-December 19, 2019(5) Acquisition method
Market purchase10