Consolidated Earnings Report for the First Three Months of Fiscal 2018
[Japanese GAAP]
February 1, 2018
Company Name:
Stock Listing:Code Number:
URL:
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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
February 13, 2018
－
None
None

(¥ millions are rounded down)
1. Consolidated Results for the First Three Months of Fiscal 2018 (October 1, 2017 to December 31, 2017)(1) Consolidated Operating Results(¥ millions; percentage figures represent year-on-year changes)
First Three Months

Net sales

Operating income

Profit attributable toowners of parent

Recurring profit

Fiscal 201815,7648.6%
1,790(4.6)%
1,891(8.1)%
1,260
43.9%
Fiscal 2017
14,511 25.7%
1,876
3.1%
2,058
7.1%
876
(20.8)%
Note: Comprehensive income: December 31, 2017: ¥1,702 million [(21.7)%], December 31, 2016: ¥2,174 million [92.6%]

First Three Months

Profitper share (¥)

Fiscal 2018
Fiscal 2017

27.33
19.01

Profitper share (diluted)(¥)－－(2) Consolidated Financial Position
Total assets(¥ millions)
Equity ratio
(%)
66.1
65.0

Net assets

December 31, 2017
64,38345,651
September 30, 2017
64,34544,862
Note: Equity: December 31, 2017: ¥42,583 million, September 30, 2017: ¥41,818 million

2.

Dividends
Dividend per share (¥)
First Quarter

Second Quarter

Third Quarter

Fiscal 2017

－

10.00

－

Fiscal 2018－Year End
20.00

Full Year
30.00

Fiscal 2018 (forecast)
12.00
－
13.00
25.00
Notes: 1. Revisions to recent dividend forecasts: None
2. Components of the fiscal 2017 year-end dividend: Ordinary dividend of 12 yen per share and 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, 1Q end
period (including treasury stock):

46,311,389 Fiscal 2017 end

46,311,389

b. Number of treasury stock at end of
Fiscal 2018, 1Q end
period:169,758 Fiscal 2017 end

186,899

46,133,577 Fiscal 2017, 1Q

46,096,822

c. Average number of stock during the
Fiscal 2018, 1Q
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 28,600 shares as of December 31, 2017.
* This financial report is outside the scope of the 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 ········································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 three months ended December 31, 2017) ···············································································6
Quarterly Consolidated Comprehensive Income(The three months ended December 31, 2017) ·············································································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) 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 Three Months Ended December 31, 2017(¥ millions)
The First Three Months of
Fiscal 2017
Amount%The First Three Months of
Fiscal 2018
Amount%ChangeAmount%Net sales

14,511

100.0

15,764

100.0

1,252

8.6

Operating income

1,876

12.9

1,790

11.4

(85)

(4.6)

Recurring profit

2,058

14.2

1,891

12.0

(167)

(8.1)

Profit attributableto owners of parent

876

6.0

1,260

8.0

384

43.9

In the three months ended December 31, 2017, the EPS Group as a whole posted consolidated net sales of ¥15,764 million,
an increase of 8.6% year on year, mainly driven by higher sales in the CRO Business and GR Business. Meanwhile,
consolidated operating income declined slightly by 4.6% year on year to ¥1,790 million, mainly reflecting a decrease inprofitability in connection with smaller projects in the SMO Business. Both net sales and profit progressed largely in linewith 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 Three
The First Three
Months ofMonths of
ChangeFiscal 2017
Fiscal 2018
Net sales
6,787
7,372
584
CRO
Operating income
1,560
1,934
373
Domestic
Net sales
3,440
3,507
66
SMO
Business
Operating income
364
221
(143)
Net sales
2,064
1,933
(130)
CSO
Operating income
111
69
(42)
GlobalNet sales
1,058
1,211
152
Research
Operatingincome(loss)(101)
5
107
Overseas
EKISHIN
Business
Net sales
1,723
2,561
838
(China)Operatingincome(loss)
174
(170)
(345)
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.
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 surpassed forecasts,
supported mainly by measures to strengthen management of overall clinical development and to promote the integration ofinternal management systems. In PMS and related services, net sales and operating income were both largely in line with
forecasts. In clinical research services, net sales and operating income both increased year on year due to favorable progresson contract-based projects. In on-site CRO services, net sales and operating income both trended firmly as resources weresecured as planned. In pharmaceutical and medical IT services, net sales were slightly below forecast, but operating income
was solid due to rigorous enforcement of cost controls.
As a result, in the CRO Business, net sales were ¥7,372 million, an increase of 8.6% year on year, and operating income was¥1,934 million, an increase of 23.9% year on year.
2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 enhance business performance by bolstering the sales structure through such means as strengthening the project
management system and 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 rose by 1.9% year on year to ¥3,507 million. Operating income was ¥221 million,a decrease of 39.3%, year on year, due partly to the impact of a loss posted by EXAM Co., Ltd.
3) CSO Business
The CSO Business is undertaken by EP-PharmaLine Co., Ltd.
Performance was largely in line with forecasts across all CMR services for pharmaceuticals, the pharmaceutical call center
division, BPO services and CMR services for medical devices. However, net sales decreased year on year due to the impactof a temporary decrease in inquiries for large-scale projects reflecting changes in the environment surrounding CMR services
for pharmaceuticals (CMR: Contract Medical Representatives).
As a result, in the CSO Business, net sales were ¥1,933 million, a decrease of 6.3% year on year, and operating income was¥69 million, a decrease of 38.0% 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 14.4%, year on year to ¥1,211 million atop strong progress on current
projects and a contribution from newly awarded major projects. On the earnings front, the Group recorded operating incomeof ¥5 million in the Global Research Business, compared with an operating loss of ¥101 million in the same period of theprevious fiscal year. This return to profitability mainly reflected the positive contribution from cost controls, 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 forming a strategic alliance with
Hangzhou Tigermed Consulting Co., Ltd., one of China’s largest clinical CROs, and setting up a joint venture with the groupasset management firm of Shandong Buchang Pharmaceuticals Co., Ltd., a major Chinese pharmaceutical manufacturer, in
addition to entering into a solid capital and business partnership with SUZUKEN Co., Ltd. Through these collaborations, theGroup is working to upgrade and expand its operating foundation and create new added value.
In terms of operating results, in the EKISHIN (China) Business, net sales increased, outperforming forecasts, and theoperating loss was reduced. This reflected positive contributions to net sales and profit from measures to step up thedevelopment of existing markets and cultivate new regional markets in pharmaceutical-related product services, and tostrengthen the sales platform in medical device-related product services, despite an increase in expenses for the realignmentof 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. in product-related services due to a change in distribution
processes in China.
As a result, net sales were ¥2,561 million, up 48.6%, year on year. The Group recorded an operating loss of ¥170 million in
the EKISHIN (China) Business, compared with operating income of ¥174 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 November7, 2017.

3

2. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(¥ millions)
As of September 30, 2017
As of December 31, 2017
(Previous Fiscal Year-End) (End of the First Three Months)
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

22,773
13,119
662
1,052
1,756
4,711
(52)
44,02319,091
15,156
303
996
1,965
5,093
(57)
42,549

4,145

4,330

7,107
726
7,834

7,500
712
8,212

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

4,533
1,813
3,843
(898)
9,291
21,83464,383(¥ millions)
As of September 30, 2017
(Previous Fiscal Year-End)As of December 31, 2017(End of the First Three Months)

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

548
65
749
216
1,090
221
11,294
14,185

1,660

1,491

320

520

1,245
497
472
4,195
19,483

1,319
533
681
4,545
18,731

3,888
13,451
23,437(230)
40,545

3,888
13,451
23,774(214)
40,899

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

711
1,072
(100)
1,684
3,068
45,65164,383Liabilities
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 three months ended December 31, 2017)

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
Share of loss of entities accounted for using equity
methodOther 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 (loss) attributable to non-controlling interests
Profit attributable to owners of parent

6

First Three Months of
Fiscal 2017
(October 1, 2016
to December 31, 2016)
14,511
9,883
4,628
2,752
1,876

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

14
5
177
31
228

9
23
18
62
113

23

5

5

2

17
46
2,058

4
12
1,891

215
215
1,842
163
606
769
1,073
197
876

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

Quarterly Consolidated Comprehensive Income(The three months ended December 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-controllinginterests

7

First Three Months of
Fiscal 2017
(October 1, 2016
to December 31, 2016)
1,073(¥ millions)First Three Months of Fiscal
2018(October 1, 2017
to December 31, 2017)
1,239

267
705
11

339
114
6

116

2

1,101
2,174

463
1,702

1,791

1,671

383

30

(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 Three Months of Fiscal 2017 (October 1, 2016 to December 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

CRO

SMO

CSO

GlobalResearch
Business

EKISHIN(China)Business

Others

Total

Adjustment(Note 1)

6,185

3,431

2,053

1,050

1,719

71

14,511―

14,511

602

9

11

7

4

335

970

(970)

―

6,787

3,440

2,064

1,058

1,723

406

15,482(970)

14,511

1,560

364

111

(101)

174

26

2,136

(260)

1,876

Amount recorded onquarterly consolidated
financial statements

Notes: 1. Eliminations/Corporate for operating income of ¥(260) million includes intersegment transactions of ¥8 million andnon-attributable corporate expenses not distributed to each segment of ¥(268) 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 Three Months of Fiscal 2018 (October 1, 2017 to December 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

Others

Total

Adjustment(Note )

Amount recorded onquarterly consolidated
financial statements

6,586

3,463

1,906

1,211

2,536

61

15,764―

15,764

786

44

27

-

25

341

1,224

(1,224)

―

7,372

3,507

1,933

1,211

2,561

402

16,989(1,224)

15,764

1,934

221

69

5

(170)

17

2,077

(286)

1,790

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).

8

3. Supplementary Information(1) Orders Received(¥ millions)
The First Three Months of Fiscal 2018
(October 1, 2017 to December 31, 2017)
YoY (%)
Backlog
103.0
39,892

CRO BusinessNew orders
6,277

SMO Business

4,097

163.5

18,591

100.8

CSO Business

1,740

89.5

8,234

121.3

Global Research Business

1,922

157.4

9,345

129.4

EKISHIN (China) Business

2,557

142.5

594

381.1

60

83.9

10

95.8

122.2

76,669

109.6

Others

16,656
Total
Notes: 1. Figures represent sales prices.
2. The above figures do not include consumption taxes.

9

YoY (%)
106.8