UNOFFICIAL TRANSLATION
The formal official document is in Japanese
Summary of Consolidated Financial Results for the First Half of
Fiscal Year ending September 30, 2021 (Japanese Accounting Standards)
May 12, 2021
Listed Company Name: MTI Ltd.
Listing Exchanges: Tokyo Stock Exchange
Securities Code:9438
URL: https://www.mti.co.jp
Representative:
Toshihiro Maeta, President and Chief Executive Officer
Contact:
Hiroshi Matsumoto, Senior Managing Director
Phone: +81-3-5333-6323
Scheduled date to submit the Quarterly Securities Report (Shihanki Houkokusho): May 17, 2021
Scheduled date of dividend payment: June 18, 2021
Supplementary documents for quarterly results: Yes
Quarterly results briefing: Yes (for securities analysts and institutional investors(on demand))(Figures less than one millions of yen are omitted)

1. Consolidated business results for the six months ended March 31, 2021
(October 1, 2020 – March 31, 2021)(Percentages represent year-on-year changes)(1) Consolidated operating results (cumulative total)
Net sales

Operating income

Millions of yen

First half of fiscal year ending
September 30, 2021
First half of fiscal year ended
September 30, 2020
(Note) Comprehensive income:% Millions of yen

Profit attributable toowners of parent

Ordinary income% Millions of yen% Millions of yen%

13,0460.6

1,232(14.8)

840(35.8)(1,416)–

12,973

(6.9)

1,446

(11.5)

1,310(17.0)

1,246

44.7

Six months ended March 31, 2021: (1,131) millions of yen –%Six months ended March 31, 2020: 934 millions of yen 74.1%
Net income
Net income
per shareper share/diluted

First half of fiscal year ending
September 30, 2021
First half of fiscal year ended
September 30, 2020

Yen

Yen

(25.92)

–

22.80

22.80

(2) Consolidated financial position
Total assets

Equity ratio

Millions of yen%

32,63930,547

21,97721,51054.8
62.7

As of March 31, 2021
As of September 30, 2020
(Reference) Shareholders’ equity:

Net assets

Millions of yen

As of March 31, 2021: 17,870 millions of yen
As of September 30, 2020: 19,166 millions of yen

2. Dividends
End of firstquarterYen

End of second
quarter

Dividend per share
End of third
quarterYear end

Annual

Yen

Yen

Yen

Yen

Fiscal year ended September–
8.00
30, 2020
Fiscal year ending September 30,
–
8.00
2021
Fiscal year ending
September 30, 2021(forecast)(Note) Revisions to dividend forecasts published most recently: No

–

8.00

16.00

–

8.00

16.00

3. Forecast for consolidated business results for the fiscal year ending September 30, 2021
(October 1, 2020 – September 30, 2021)
Net sales
Millions of yen(Percentages represent year-on-year changes.)
Profit attributable to
Net income
Ordinary income
owners of parent
per share

Operating income%

Millions of yen%

Millions of yen%

Millions of yen

25,500(2.2)
2,100 (16.2)
1,600 (23.2)
Full year〜26,500 〜1.6
〜2,500 〜(0.3)
〜2,000 〜(4.0)(Note) Revisions to forecasts for consolidated business results published most recently: Yes(1,000)〜(600)%

Yen–(18.27)〜(10.96)* Note:(1) Important changes of subsidiaries during the term(changes in specified subsidiaries resulting in change in scope of consolidation): Not applicable
New: –
Exception: –(2) Application of specific accounting treatment to the preparation of quarterly consolidated financial statements: Not

applicable(3) Changes in accounting policies and changes or restatement of accounting estimates(i) Changes in accounting policies due to the modification in accounting methods:(ii) Changes in accounting policies other than (i):(iii) Changes in accounting estimates:(iv) Restatement:

Not applicableNot applicableNot applicableNot applicable(4) Number of outstanding shares (common shares)(i) Number of shares outstanding at the end of period (including treasury shares):3/21:61,209,300 shares
9/20: 61,144,600 shares(ii) Number of treasury shares at the end of period
3/21: 6,485,597 shares

9/20: 6,511,616 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Six months ended 3/2021: 54,664,318 shares

Six months ended 3/2020: 54,647,554 shares* Status of a quarterly review
This earnings release is not subject to an audit.

* Cautionary statement with respect to forward-looking statements
The forward-looking statements included in this material are based on the Company’s judgments, assumptions, and convictions
based on information available to the Company at the time of publication of this document and may differ materially from actual
results for a range of factors, including conditions of Japanese and overseas economies, changes in the situation of operations inJapan and overseas, and uncertainties and potential risks inherent in forward-looking statements. The risks and uncertainties include
unforeseeable effects of future events. The information on consolidated earnings forecasts and other future forecasts on page 4 of
the Accompanying Materials describes notes on the assumptions of the earnings forecasts and the use of the earnings forecasts.
While the Company planned to hold a briefing on earnings in the first half chiefly for securities analysts and institutional investorson Thursday, May 13, 2021, to prevent the spread of infections by the COVID-19 coronavirus the Company will forgo holding at
the venue event and will post the on-demand delivery of the briefing and related materials on its website.

Accompanying materials – Contents
1. Qualitative information on financial results for the current settlement ................................................................... 2(1) Explanation on operating results ..................................................................................................................... 2(2) Explanation on financial position .................................................................................................................... 3(3) Explanation of future forecast information including consolidated forecast .................................................. 4
2. Quarterly consolidated financial statement and important notes ............................................................................... 5(1) Quarterly consolidated balance sheet ................................................................................................................ 5(2) Quarterly consolidated statement of income and quarterly consolidated statementof comprehensive income ............................................................................................................................... 7(3) Quarterly consolidated statement of cash flows .............................................................................................. 9-1-

1. Qualitative information on financial results for the current settlement(1) Explanation on operating results
Overview of the first half ended March 31, 2021 (Period from October 1, 2020 to March 31, 2021)
Looking at the Group's business environment for the first half under review, the Japanese economy is severely
affected by the prolonged COVID-19 pandemic. Amid this, its impact on the Group was limited and it worked
on various initiatives in the content business and in the healthcare business with a view towards continued growthin the future.
In the content business, the Group increased the number of new subscribers to the AdGuard security-relatedapp, which was in high demand, although the acquisition of new subscribers through mobile phone storesremained weak. It also increased monthly distribution of original comics to digital comic distributors.
In the healthcare business, the Group facilitated collaboration with its partner, Medipal Holdings Corporation,
in a bid to spur more pharmacies to introduce the cloud drug record service, given that the appetite for the
introduction of this service was growing due to the revision of the Medical Fee System, and to promote sales ofchild bearing-related solutions, such as the maternal health record book app, to local governments.
As a result, net sales stood at ¥13,046 million yen (up 0.6% year on year) and gross profit at ¥9,627 million
yen (up 2.0% year on year).
Meanwhile, despite the growth in gross profit, operating income was down 14.8% year on year, to ¥1,232
million, as a result of soaring selling, general and administrative (SG&A) expenses due chiefly to a rise inpersonnel expenses and subcontract expenses, as well as an increase in advertising expenses aimed to expand
the number of members of AdGuard, a paid security-related app.
Ordinary income decreased 35.8% year on year, to ¥840 million, due chiefly to a drop in non-operating
expenses following increase in investment losses by equity method (increased ¥250 million yen year on year)
despite a fall in operating income.
Loss attributable to owners of parent came to -¥1,416 million (compared to a profit of ¥1,246 million in thesame of the previous year). This mainly reflected decreases in ordinary income and extraordinary profit, as well
as a decision to post neither deferred tax assets nor income taxes - deferred pursuant to the current accounting
standards for the treatment of consolidated results pertaining to corporate taxes for relevant capital gains as aresult of the transfer of the entire shares of Solamichi System Inc., its consolidated subsidiary of the Company,
to CARADA medica Inc., a consolidated subsidiary of the Company.
Consolidated business results(Period from October 1, 2020 to March 31, 2021)
First half of the fiscal
year ending September
30, 2021

First half of the fiscal
year ending September
30, 2020

Millions of yen

Millions of yen

Millions of yen%

13,046

12,973

+73

+0.6

3,419

3,531

(112)

(3.2)

Gross profit

9,627

9,441

+185

+2.0

SG&A

8,395

7,995

+400

+5.0

1,232

1,446

(214)

(14.8)

840

1,310

(469)

(35.8)(1,416)

1,246(2,663)-

Net sales
Cost of sales

Operating income
Ordinary income
Profit attributable to owners ofparentChangeAmountPercentage

Breakdown of SG&A
(Period from October 1, 2020 to March 31, 2021)
First half of the fiscal
year ending September
30, 2021

First half of the fiscal
year ending September
30, 2020

Millions of yen

Millions of yen

Millions of yen

%

8,395

7,995

+400

+5.0

Advertising expenses

711

490

+220

+44.9

Personnel expenses

3,443

3,085

+357

+11.6

Commission fee

1,574

1,674

(99)

(6.0)

Subcontract expenses

887

678

+208

+30.7

Depreciation

584

757

(172)

(22.8)

1,193

1,308

(114)

(8.7)

Total

Other

-2-

ChangeAmountPercentage

Operating results by segment are as follows.
① Content business
The content business includes B2C monthly billing services excluding the Luna-Luna healthcare service forwomen and the KARADAmedica health Q&A service in cooperation with healthcare professionals, as wellas the B2B original comic distribution business that offers original comic content to comic distributors.
This segment served 3.69 million paying subscribers.The figure was down by 190,000 from the end of
September 2020. The net decrease in paying subscribers continued, but the pace of decrease was gradually
reduced by strong acquisition of new subscriptions to the AdGuard security-related app via mobile phone
stores.
Net sales stood at ¥9,636 million (down 4.3% year on year). While the number of paying subscribers fell
year on year, a takeover of the musico music distribution website and other operations had a positive effect.
Operating income also dropped 10.7% year on year to ¥3,268 million, due chiefly to soaring expenses foradvertising the AdGuard security-related app.
② Healthcare business
The healthcare business includes B2C monthly billing services under the Luna-Luna and KARADAmedica
brands and B2B and B2B2C healthcare services for medical institutions and local governments, such as thecloud drug record service, online medical examinations, online medication advice and the maternal healthrecord book app.
This segment served 690,000 paying subscribers. The figure was 20,000 smaller than at the end of
September 2020. It made the most intensive efforts to increase the number of pharmacies introducing thecloud drug record service. The desire to introduce the service has been increasing due to the revision of theMedical Fee System. As of the end of March 2021, it had been adopted by 572 pharmacies, up 216 from theend of September 2020.
Net sales came to ¥1,933 million (up 6.6% year on year), after growth in initial introduction sales basedon an increase in the number of pharmacies introducing the cloud drug record service over the same period
the previous year. Operating loss decreased to ¥660 million (compared to the loss of ¥764 million recorded
for the same period the previous year), aided by an increase sales despite the continuing burden of upfront
investment spending.
③ Other business
Other business includes the B2B fintech business, the AI business operated by consolidated subsidiary
Automagi Inc., and the B2B solutions business, which engages in the contracted development of systems andapplications.
In this segment, net sales stood at ¥2,063 million (up 34.4% year on year), and operating income at -¥18
million (compared with -¥144 million in the same period a year earlier), following a rise in the sales of theB2B solutions business and AI business.
(2) Explanation on financial position① Assets, liabilities and net assets
At the end of the first half under review, total assets increased ¥2,092 million from the end of September
2020, to ¥32,639 million.
Current assets increased ¥1,994 million mainly due to a rise in cash and deposits. Non-current assets rose
¥97 million chiefly due to an increase in software, despite a decline in goodwill and customer-related assets.
Current liabilities increased ¥1,785 million, primarily reflecting a rise in income taxes payable. Noncurrent liabilities fell ¥159 million mainly due to a declined in long-term liabilities.
Net assets increased ¥466 million yen, mainly reflecting an increase in no-controlling interests, which
offset the dividends paid and the posting of ¥1,416 million as a loss attributable to owners of parent.
② Consolidated cash flows
At the end of the first half of the fiscal year under review, cash and deposits were ¥15,811 million, up ¥2,457
million from the end of September 2020.Cash flow by activity and principal factors in the first half underreview are as follows:
Net cash provided by operating activities was ¥2,037 million (inflow of ¥966 million for the first half ofthe previous fiscal year). Principal factors included income before income taxes, depreciation andamortization, and loss on equity method investments.
Net cash used in investing activities stood at ¥879 million (outflow of ¥3,886 million for the first half of-3-

the previous fiscal year). Major factors included expenditure for the purchase of intangible assets (mainly
software).
Net cash provided by financing activities came to ¥1,287 million (inflow of ¥3,179 million for the first halfof the previous fiscal year). The main factors included payments from non-controlling shareholders, whichmore than offset payments of dividends and repayments of long-term borrowings.
Net cash provided by(used in) operating
activities

Net cash provided by(used in) investing
activities

Net cash provided by(used in) financing
activities

Cash and cash
equivalents at end of
periodMillions of yen

Millions of yen

Millions of yen

Millions of yen

First half of the fiscal year ending
September 30, 2021

2,037

(879)

1,287

15,811First half of the fiscal year ending
September 30, 2020

966

(3,886)

3,179

12,677For the fiscal year ended
September 30, 2020

3,292

(4,807)2,449

13,354(3) Explanation of future forecast information including consolidated forecast
The Company will work hard to expand sales of its healthcare business and to cut losses. In the content
business, it will make every effort to maintain the number of paying subscribers by expanding sales of the
AdGuard security-related app and striving to bolster the original comic distribution business.
The Company takes medium- and long-term perspectives in its engagement in the healthcare business,
which has strong potential for future growth and compared with BtoC transactions, may move toward a morestable stock-type business through the establishment of long-term business relationships with customers.
Therefore, the Company is committed to implementing a variety of measures to achieve sales growth.
Among others, the cloud drug record service will help the healthcare business attain continuous sales
growth, since the appetite for introducing the service has been growing among pharmacies due to the revisionof the Medical Fee System. The Company will accelerate sales tie-ups with companies that provide IT
solutions to pharmacies to make sure that more stores will introduce the service, while simultaneously
strengthening collaboration with its partner, Medipal Holdings Corporation.
If will also take measures to increase paid subscriptions and use rates with respect to online medical
examinations and online medication advice while also enhancing childcare-related services with a focus on
local governments that have introduced the Boshimo the maternal health record book app.
As announced today in the “Notice Concerning Organizational Restructuring through Establishment of anIntermediate Holding Company, Etc. by Shares Transfer of a Consolidated Subsidiary”, the Company will
establish MTI Healthcare Holdings Corporation. in July (planned). Since this will enable the Company tofurther strengthen collaboration with its partner, Medipal Holdings Corporation, the Company intends togradually consolidate a number of healthcare businesses that it is promoting with the partner.
With regards to forecasts for consolidated business results for the fiscal year ending September 30,2021,
ordinary income and profit attributable to owners of parent were revised as stated in the “Notice Concerning
Posting of Non-Operating Expenses, Differences between Forecasts and Actual Results for the First Half of
the Fiscal Year and Revisions to Full-Year Results Forecasts” announced today.
Earnings forecast for the fiscal year ending September 30, 2020
(Period from October 1, 2020 to September 31, 2021)(Millions of yen)

YoY(%)Net sales

25,500 ~ 26,500(2.2) ~ 1.6

Operating income

2,100 ~ 2,500(16.2) ~ (0.3)

Ordinary income

1,600 ~ 2,000(23.2) ~ (4.0)

Profit attributable toowners of parent(1,000) ~ (600)－-4-2. Quarterly consolidated financial statement and important notes（1） Quarterly consolidated balance sheet（Unit: thousands of yen）
Previous fiscal year
(As of September 30, 2020)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Other
Allowance for doubtful accounts

Current fiscal year
(As of March 31, 2021)

13,354,028
4,840,902
1,585,024(36,222)

15,811,852
4,619,908
1,340,428(34,005)

19,743,732

21,738,185

193,757

221,988

1,281,608
692,054

1,495,292
590,459

Customer-related assets
Other

1,755,000
35,437

1,544,400
39,624

Total intangible assets

3,764,099

3,669,776

Investments and other assets
Investment securities
Lease and guarantee deposits

4,536,380
493,882

4,687,569
475,500

Deferred tax assets
Other
Allowance for doubtful accounts

1,766,869
74,487(25,824)

1,777,419
95,164(26,024)

Total investment and other assets

6,845,793

7,009,629

10,803,650

10,901,394

30,547,383

32,639,579

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Software
Goodwill

Total non-current assets
Total assets-5-

(Unit: thousands of yen)Previous fiscal year
(As of September 30, 2020)

Current fiscal year
(As of March 31, 2021)

Liabilities
Current liabilities
Account payable-trade
Current portion of long-term loans payable
Accounts payable-other
Income taxes payable
Provision for point usage
Other

1,101,925
451,780
1,333,898
701,022
110,690
1,067,387

1,085,569
451,780
1,103,978
2,490,563
116,270
1,303,604

Total current liabilities

4,766,705

6,551,766

Non-current liabilities
Long-term loans payable
Net defined benefit liability
Other2,881,570
1,381,767
6,756

2,655,680
1,447,423
7,328

Total non-current liabilities

4,270,094

4,110,431

Total liabilities

9,036,799

10,662,197

Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earning

5,138,116
6,551,222
10,707,058

5,180,515
6,643,436
8,851,623

Treasury shares(3,283,663)(3,273,933)

Total shareholders' equity

19,112,733

17,401,642

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans

19,897(11,666)
46,010425,129869
43,111

Total accumulated other comprehensive income

54,241

469,110Subscription rights to shares
Non-controlling interests

345,2991,998,309

215,595
3,891,033

Total net assets

21,510,583

21,977,381

30,547,383

32,639,579

Total liabilities and net assets-6-

（2） Quarterly consolidated statement of income and quarterly consolidated statementof comprehensive income
Quarterly consolidated statement of income
For the first half
(Unit: thousands of yen)
For the first halfof the previous fiscal year
(from October 1, 2019
to March 31, 2020)

For the first halfof the current fiscal year
(from October 1, 2020
to March 31, 2021)

Net sales
Cost of sales

12,973,703
3,531,919

13,046,903
3,419,303

Gross profit

9,414,784

9,627,600

Selling, general and administrative expenses

7,968,122

8,395,170

Operating income

1,446,661

1,232,430

82
10,1304,069

66

Non-operating income
Interest income
Dividend income
Amortization of negative goodwill
Foreign exchange gains

－
999

－
－
15,617Retirement benefit expenses
Cancellation of treasury share acquisition rights gains
Other－
17,72228,43821,424
26,445

Total non-operating income

33,004

91,992

298

3,619

154,275

404,676

9,363
5,604

－
75,549169,542483,845

1,310,123

840,576

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on step acquisitions

272,326－

Gain on sale of non-current assets
Gain on sales of investment securities－
330,464

3,030
2,934

Total extraordinary income

602,791

5,964

Extraordinary losses
Loss on sale of non-current assets－
55,94225,302

Loss on retirement of non-current assets
Impairment loss
Loss on valuation of investment securities

8,003

－

24,29376,94911

Total extraordinary losses

81,244109,257

Income before income taxes

1,831,670

737,283

Income taxes-current

566,219

2,313,122

Income taxes-deferred

47,545(29,355)

Total income taxes

613,764

2,283,767

Profit (loss)

1,217,906(1,546,484)

Profit (loss) attributable to non-controlling interests(28,160)(129,540)

Profit (loss) attributable to owners of parent

1,246,066(1,416,943)-7-

Quarterly consolidated statement of comprehensive income
For the first half
(Unit: thousands of yen)
For the first halfof the previous fiscal year
(from October 1, 2019
to March 31, 2020)

Profit (loss)
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

For the first halfof the current fiscal year
(from October 1, 2020
to March 31, 2021)

1,217,906(1,546,484)(257,966)(4,042)3,141

361,393
12,036(2,898)(24,864)

44,360(283,731)

414,891

Comprehensive income

934,174(1,131,592)(Comprehensive income attributable to)Comprehensive income attributable to ownersof parent
Comprehensive income attributable to non-controllinginterests

962,334(1,002,073)(28,160)(129,518)-8-

（3） Quarterly consolidated statement of cash flows(Unit: thousands of yen)
For the first half of
For the first half ofthe current fiscal year
the current fiscal year
(from October 1, 2019 to (from October 1, 2020 to March
March 31, 2020)
31, 2021)
Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for point usage
Increase (decrease) in net defined benefit liability
Interest and dividends income
Interest expenses
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on step acquisitions
Loss (gain) on sale of non-current assets
Loss on retirement of non-current assets
Loss (gain) on sale of investment securities
Decrease (increase) in trade receivables
Increase (decrease) in trade payables
Increase (decrease) in accounts payable-other
Increase (decrease) in accrued consumption taxes

1,831,670
795,962
25,302
89,148(11,363)

737,283
627,388
76,949101,595
5,579

59,429(10,213)298

61,478(66)
3,619

154,275

404,676(272,326)

－
4,973

－
55,942(330,464)(661,052)(17,462)(46,252)(96,566)

24,293(2,934)
224,429(20,233)(229,681)
245,793

Other, net(116,531)

268,826

Subtotal

1,449,794

2,533,972

Interest and dividends income received
Interest expenses paid
Income taxes refund (paid)

10,213(298)(493,622)

63(3,619)(492,471)

Net cash provided by (used in) operating activities

966,087

2,037,944(39,375)(765,162)－(52,879)
626,346(370,507)(93,737)(652,924)
3,030(8,503)
17,102(131,803)

Payments for acquisition of businesses
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Other, net(3,242,593)－(39,382)－(3,420)(12,813)

Net cash provided by (used in) investing activities(3,886,975)(879,649)

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Proceeds from sale of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates

Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of shares
Proceeds from share issuance to non-controlling shareholders
Dividends paid
Payments from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Purchase of treasury share acquisition rights
Purchase of treasury shares of subsidiaries
Net cash provided by (used in) financing activities-9-－(2,000)3,500,000(7,140)4,000,000(4,000,000)－
350,000(438,446)－(225,890)
43,665
2,115,000(438,491)(222,600)－－－(181,550)(25,000)

3,179,813

1,287,733

(Unit: thousands of yen)
For the first half of
For the first half ofthe current fiscal year
the current fiscal year
(from October 1, 2019 to (from October 1, 2020 to March
March 31, 2020)
31, 2021)

Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents(2,873)

11,796

256,051

2,457,824

Cash and cash equivalents at beginning of period

12,421,560

13,354,028

Cash and cash equivalents at end of period

12,677,611

15,811,852- 10 -