Consolidated Earnings Report for the First Six Months of Fiscal 2018
[Japanese GAAP]May 1, 2018
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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+81-3-5684-7873
May 14, 2018
June 4, 2018
Yes
Yes (for institutional investors and analysts)(¥ millions are rounded down)
1. Consolidated Results for the First Six Months of Fiscal 2018 (October 1, 2017 to March 31, 2018)(1) Consolidated Operating Results(¥ millions; percentage figures represent year-on-year changes)
First Six Months

Net sales

Operating income

Profit attributable toowners of parent

Recurring profit

Fiscal 2018
32,666
7.5%
3,828(17.4)%
3,891(18.5)%
2,495 (2.3)%
Fiscal 2017
30,397 18.5%
4,636
22.2%
4,774
21.3%
2,555
1.2%
Note: Comprehensive income: March 31, 2018: ¥2,586 million [(27.3)%], March 31, 2017: ¥3,558 million [73.5%]

First Six Months

Profitper share (¥)

Fiscal 2018
Fiscal 2017

54.08
55.44

Profitper share (diluted)(¥)－－(2) Consolidated Financial Position
Total assets(¥ millions)
Equity ratio
(%)
65.3
65.0

Net assets

March 31, 2018
66,68046,752September 30, 2017
64,34544,862
Note: Equity: March 31, 2018: ¥43,567 million, September 30, 2017: ¥41,818 million

2.

Dividends
Dividend per share (¥)
First Quarter

Second Quarter

Third Quarter

Fiscal 2017

－

10.00

－

Fiscal 2018

－

12.00

Year End

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.

Full Year

20.00

30.00

13.00

25.00

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 six 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, 2Q end
period (including treasury stock):

46,311,389 Fiscal 2017 end

46,311,389

b. Number of treasury stock at end of
Fiscal 2018, 2Q end
period:154,679 Fiscal 2017 end

186,899

46,143,103 Fiscal 2017, 2Q

46,089,496

c. Average number of stock during the
Fiscal 2018, 2Q
period:Note: The total number of treasury shares included shares held by the employees’ shareholding trust, specifically 47,600
shares as of September 30, 2017 and 12,900 shares as of March 31, 2018.
* 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 ························3
2. Quarterly Consolidated Financial Statements ·························································································4(1) Quarterly Consolidated Balance Sheets ····························································································4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ··················································6
Quarterly Consolidated Statements of Income(The six months ended March 31, 2018) ······················································································6
Quarterly Consolidated Comprehensive Income(The six months ended March 31, 2018) ····················································································7(3) Notes Concerning Quarterly Consolidated Financial Statements ·····························································8(Notes Concerning the Going Concern Assumption) ·········································································8(Note Concerning Significant Changes in the Amount of Shareholders’ Equity) ······································· 8(Segment Information) ············································································································8
3. Supplementary Information ············································································································9(1) Main data related to consolidated cash flows ·····················································································9(2) Orders Received ·····················································································································91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, 2018(¥ millions)
The First Six Months of
Fiscal 2017
Amount%The First Six Months of
Fiscal 2018
Amount%ChangeAmount%Net sales

30,397100.0

32,666

100.0

2,268

7.5

Operating income

4,636

15.3

3,828

11.7

(808)

(17.4)

Recurring profit

4,774

15.7

3,891

11.9

(883)

(18.5)

Profit attributableto owners of parent

2,555

8.4

2,495

7.6

(59)

(2.3)

In the six months ended March 31, 2018, the EPS Group as a whole posted consolidated net sales of ¥32,666 million, an
increase of 7.5% 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 ¥3,828 million, down 17.4% year on year due to theimpact of the fall back from a strong performance in the previous fiscal year in the CRO Business and SMO Business. Bothnet 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 Six
The First Six
Months ofMonths of
ChangeFiscal 2017
Fiscal 2018
Net sales
14,943
15,649706
CRO
Operating income
3,791
3,705
(85)
Domestic
Net sales
7,090
7,033
(57)
SMO
Business
Operating income
1,012
503
(508)
Net sales
4,155
3,903
(251)
CSO
Operating income
260
177
(83)
Net
sales
2,384
2,660
276
GlobalResearch
Operatingincome(loss)
(152)
120
272
Overseas
EKISHIN
Net sales
3,165
5,184
2,018
Business(China)Operating income (loss)
183
(144)
(328)
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. 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.
2

As a result, in the CRO Business, net sales were ¥15,649 million, an increase of 4.7% year on year, and operating income
was ¥3,705 million, a decrease of 2.3% year on year.

2) SMO Business
The SMO Business is undertaken primarily by EP-SOGO Co., Ltd. and EXAM Co., Ltd.
On October 2, 2017, EP-SOGO Co., Ltd. converted EXAM Co., Ltd. into a wholly owned subsidiary.
In this business, the Group has achieved steady progress on integration with the former Sogo Rinsho Group. The Group
worked to strengthen 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 lackluster orders at EP-SOGO Co., Ltd. andlosses at EXAM Co., Ltd.
As a result, in the SMO Business, net sales were ¥7,033 million, a decrease of 0.8% year on year, and operating income was¥503 million, a decrease of 50.3% year on year.
3) CSO Business
The CSO Business is undertaken by EP-PharmaLine Co., Ltd.
Performance was largely in line with forecasts across all CMR (Contract Medical Representative) services forpharmaceuticals, the pharmaceutical call center division, BPO services and CMR services for medical devices. However, net
sales declined year on year due to the impact of a slump in demand for MRs in the pharmaceutical industry, which had asignificant effect on the Company’s CMR services for pharmaceuticals as well as on PMS services.
As a result, in the CSO Business, net sales were ¥3,903 million, a decrease of 6.1% year on year, and operating income was¥177 million, a decrease of 32.0% 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 11.6% year on year to ¥2,660 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 ¥120
million in the Global Research Business, compared with an operating loss of ¥152 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.
In terms of operating results, net sales and profit both performed steadily, due to measures to step up the development ofexisting markets and cultivate new regional markets in pharmaceutical-related product services from the first quarter, and acontraction in expenses in the realignment of the operating foundation in specialized services. Since the fiscal year ending
September 30, 2018, the amount of sales has been increasing at Shanghai Hua Xin High Biotechnology Co., Ltd. inproduct-related services due to a change in distribution processes in China.
As a result, net sales were ¥5,184 million, up 63.8%, year on year. The Group recorded an operating loss of ¥144 million in
the EKISHIN (China) Business, compared with operating income of ¥183 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, 2017 issued on November 7, 2017.

3

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

4(¥ millions)
As of March 31, 2018(End of the First Six Months)

22,773
13,119
662
1,052
1,756
4,711
(52)
44,02321,043
15,921
848
1,064
1,542
4,471
(55)
44,836

4,145

4,193

7,107
726
7,834

7,127
723
7,851

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

5,116
1,814
3,766
(898)
9,799
21,844
66,680(¥ millions)
As of September 30, 2017
(Previous Fiscal Year-End)As of March 31, 2018(End of the First Six Months)

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

962
65
749
1,456
2,417
269
9,528
15,448

1,660

1,298

320

560

1,245
497
472
4,195
19,483

1,448
513
658
4,479
19,9273,888
13,451
23,437(230)
40,545

3,888
13,50825,009(198)
42,207

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

615
913
(169)
1,359
3,185
46,752
66,680Liabilities
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 assets5(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Quarterly Consolidated Statements of Income(The six months ended March 31, 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
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 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

6

First Six Months of
Fiscal 2017
(October 1, 2016
to March 31, 2017)
30,397
20,248
10,1495,512
4,636(¥ millions)First Six Months of
Fiscal 2018
(October 1, 2017
to March 31, 2018)
32,666
21,107
11,558
7,729
3,828

20
8
108
60
199

19
23
117
159

29
31
61
4,774

9
81
6
97
3,891

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

3,891
1,408
(17)
1,390
2,500
4
2,495

Quarterly Consolidated Comprehensive Income(The six months ended March 31, 2018)

2,766(¥ millions)First Six Months of
Fiscal 2018
(October 1, 2017
to March 31, 2018)
2,500

264
453
22

243
(94)
(62)

51

(0)

791
3,558

86
2,586

3,091

2,582

467

4

First Six Months of
Fiscal 2017
(October 1, 2016
to March 31, 2017)
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-controllinginterests7

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Concerning the Going Concern Assumption)
None(Note Concerning Significant Changes in the Amount of Shareholders’ Equity)
None(Segment Information)【Segment Information】
I. The 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)

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

CRO

SMO

CSO

GlobalResearch
Business

EKISHIN(China)Business

Others13,530

7,066

4,134

2,373

3,157

135

1,413

24

21

10

8

14,943

7,090

4,155

2,384

3,791

1,012

260

(152)

Adjustment(Note 1)

Amount recorded onquarterly consolidated
financial statements

30,397―30,397707

2,185(2,185)

―

3,165

843

32,583(2,185)30,397

183

39

5,135

(498)

4,636

Total

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.
Ⅱ. The First Six Months of Fiscal 2018 (October 1, 2017 to March 31, 2018)
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

CRO

SMO

CSO

GlobalResearch
Business

EKISHIN(China)Business

Others13,978

6,989

3,850

2,660

5,063

123

32,666―

32,666

1,671

43

53

―

120

704

2,593

(2,593)―

15,649

7,033

3,903

2,660

5,184

828

35,260(2,593)32,666

3,705

503

177

120

(144)

60

4,421

(593)

3,828

Total

Adjustment(Note )

Amount recorded onquarterly consolidated
financial statements

Note: Eliminations/Corporate for operating income of ¥(593) million includes intersegment transactions of ¥23 million andnon-attributable corporate expenses not distributed each segment of ¥(616) million. The main corporate expenses
comprise expenses related to the Company (the holding company).

8

3. Supplementary Information(1)

Main data related to consolidated cash flows(¥ millions)First Six Months of
Fiscal 2017
(October 1, 2016 to
March 31, 2017)

First Six Months of
Fiscal 2018
(October 1, 2017
to March 31, 2018)

Ⅰ. Cash flows from operating activities

2,779

1,424

Ⅱ. Cash flows from investing activities(3,017)(1,905)

Ⅲ. Cash flows from financing activities

3,501(1,075)289

11

Ⅴ. Net increase (decrease) in cash and cash equivalents

3,553(1,544)

Ⅵ. Cash and cash equivalents at beginning of period

16,60723,097

Ⅶ. Cash and cash equivalents at end of period

20,16021,553

Depreciation

372

403

Amortization of goodwill

560

576

Effect of exchange rate change on cash and cashⅣ.
equivalents(2)

Orders Received(¥ millions)
The First Six Months of Fiscal 2018
(October 1, 2017 to March 31, 2018)
YoY (%)
Backlog
97.4
39,163

CRO BusinessNew orders
12,941SMO Business

7,699

143.7

18,668105.7

CSO Business

3,718

98.1

8,268

126.2

Global Research Business

1,940

41.5

7,913

84.6

EKISHIN (China) Business

4,750

152.5

260

682.2

120

89.6

8

89.6

102.7

74,282

104.9

Others31,171
Total
Notes: 1. Figures represent sales prices.
2. The above figures do not include consumption taxes.

9

YoY (%)
105.3