UNOFFICIAL TRANSLATION
The formal official document is in Japanese
Summary of Consolidated Financial Results for the First Quarter of
Fiscal Year Ending September 30, 2021 (Japanese Accounting Standards)
February 9, 2021
Listed Company Name: MTI Ltd.
Listing Exchanges: Tokyo Stock Exchange
Securities Code:9438
URL: https://www.mti.co.jp/eng
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): February 15, 2021
Scheduled date of dividend payment: –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 three months ended December 31, 2020
(October 1, 2020 – December 31, 2020)(Percentages represent year-on-year changes)(1) Consolidated operating results (cumulative total)
Net sales

Operating income

Millions of yen

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

6,304

3.0

% Millions of yen

495

22.4

%

(4.7)

6,118
(10.8)
586(29.3)
404(53.4)
231
Three months ended December 31, 2020: 145 millions of yen (38.4)%
Three months ended December 31, 2019: 236 millions of yen –%(57.4)First quarter of fiscal year ending
September 30, 2021
First quarter of fiscal year ended
September 30, 2020

(5.5)

% Millions of yen

220

Net income
per share

553

Profit attributable toowners of parent

Ordinary income

Net income
per share/diluted
Yen

Yen

4.04

4.01

4.23

–

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

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

Equity ratio

Millions of yen%

29,45021,03230,54721,510
As of December 31, 2020: 18,937 millions of yen
As of September 30, 2020: 19,166 millions of yen

64.3
62.7

2. Dividends
End of firstquarter
Fiscal year ended
September 30, 2020
Fiscal year ending
September 30, 2021
Fiscal year ending
September 30, 2021 (forecast)

Dividend per share
End of third
quarter

End of second
quarterYear end

Annual

Yen

Yen

Yen

Yen

Yen

–

8.00

–

8.00

16.00

8.00

–

8.00

16.00

–

(Note) Revision of dividend forecast for during this period : No

3. Forecast for consolidated business results for the fiscal year ending September 30, 2021
(October 1, 2020 – September 30, 2021)(Percentages represent year-on-year changes.)
Net sales
Millions of yen

For the first half
Full year

12,750〜13,250
25,500〜26,500

Operating income％ Millions of yen

(1.5)
〜2.3
(2.2)
〜1.6

％ Millions of yen

1,000 (30.9)〜1,200 〜(17.1)
2,100 (16.2)〜2,500 〜(0.3)

Profit attributable toowners of parent

Ordinary income(Note) Revisions to forecasts for consolidated business results published most recently: No

％

Yen

650
(47.8)〜850 〜(31.8)
1,300
156.4
〜1,700 〜235.3

11.89〜15.5523.79〜31.10％ Millions of yen

1,000 (23.7)〜1,200 〜(8.4)
2,100
0.8
〜2,500 〜20.0

Net income
per share

* Notes(1) Important changes of subsidiaries during the term (changes in specified subsidiaries resulting in change in scopeof 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):12/2020: 61,170,900 shares
09/2020: 61,144,600 shares(ii) Number of treasury shares at the end of period
12/2020: 6,516,403 shares
09/2020: 6,511,616 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Three months ended 12/2020: 54,645,883 shares Three months ended 12/2019: 54,649,714 shares* This Summary of Consolidated Financial Results for the First Quarter is not included in the scope of quarterly review
by certified public accountants or audit corporations.

* 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 3~4of the Accompanying Materials describes notes on the assumptions of the earnings forecasts and the use of the earnings forecasts.
A video of the briefing on earnings for the first quarter for securities analysts and institutional investors will be made available on
demand on the Company's website.
The documents for the briefing and the video(Japanese) will be posted on Wednesday, February 10, 2021 and on Friday, February
12, 2021 respectively.

Accompanying materials – Contents
1. Qualitative information on financial results for the current quarterly 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 statements and important notes ............................................................................ 5(1) Quarterly consolidated balance sheet .............................................................................................................. 5(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive
income ............................................................................................................................................................. 7

11.Qualitative information on financial results for the current quarterly settlement(1) Explanation on operating results
Overview of the first quarter of fiscal year ending September 30, 2021
(Period from October 1, 2020 to December 31, 2020)
Looking at the Group's business environment for the first quarter under review, the Japanese economy isseverely affected by the prolonged COVID-19 pandemic. Amid this, its impact on the Group was limited andit worked on various initiatives in the content business and in the healthcare business with a view towards
continued growth in 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 actively organized online seminars in 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.
As a result, net sales stood at ¥6,304 million yen (up 3.0% year on year) and gross profit at ¥4,711 million
yen (up 4.9% year on year).
Meanwhile, operating income was down 5.5% year on year to ¥553 million as a result of soaring selling,
general and administrative (SG&A) expenses due chiefly to a rise in personnel expenses and subcontract
expenses despite the growth of gross profit.
Ordinary income came to ¥495 million (up 22.4 year on year), due chiefly to a drop in non-operating
expenses following shrinkage in share of loss of entities accounted for using equity method despite a fall in
operating income.
Profit attributable to owners of parent almost stayed flat at ¥220 million (down 4.7% year on year). This is
explained chiefly by a slide in extraordinary income while ordinary income surged.
Consolidated business results(Period from October 1, 2020 to December 31, 2020)
First quarter
First quarterof the fiscal year ending of the fiscal year ended
September 30, 2021
September 30, 2020

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen%

Net sales

6,304

6,118

+186

+3.0

Cost of sales

1,593

1,627

(34)

(2.1)

Gross profit

4,711

4,490

+220

+4.9

SG&A

4,157

3,904

+253

+6.5

Operating income

553

586

(32)

(5.5)

Ordinary income
Profit attributable to ownersof parent

495

404

+90

+22.4

220

231

(10)

(4.7)

Breakdown of SG&A
(Period from October 1, 2020 to December 31, 2020)
First quarter
First quarterof the fiscal year ending of the fiscal year ended
September 30, 2021
September 30, 2020

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen

%

4,157

3,904

+253

+6.5

Advertising expenses

337

248

+88

+35.5

Personnel expenses

1,743

1,537

+205

+13.4

Commission fee

789

829

(40)

(4.9)

Subcontract expenses

441

305

+135

+44.4

Depreciation

272

307

(34)

(11.3)

Other

573

675

(101)

(15.0)

Total

2

Operating results by segment are as follows.
① Content business
The content business includes B2C monthly billing services excluding the Luna-Luna healthcare service
for women and the KARADAmedica health Q&A service in cooperation with healthcare professionals, aswell as the B2B original comic distribution business that offers original comic content to comic distributors.
This segment served 3.78 million paying subscribers.The figure was down by 100,000 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 ¥4,848 million (down 1.3% 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 5.0% year on year to ¥1,709 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
the cloud drug record service, online medical examinations, online medication advice and the maternal
health record book app.
This segment served 700,000 paying subscribers. The figure was 10,000 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 December 2020, it had been adopted by 451 pharmacies, up 94 fromthe end of September 2020.
Net sales came to ¥922 million (up 7.8% 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 income was negative at -¥351 million (compared to the -¥396 million recorded
for the same period the previous year) due to the heavy 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
and applications.
In this segment, net sales stood at ¥820 million (up 41.6% year on year), and operating income at -¥101
million (compared with -¥134 million in the same period a year earlier), following a rise in the sales of theB2B solutions business.
(2) Explanation on financial position① Assets, liabilities and net assets
At the end of the first quarter under review, total assets decreased ¥1,096 million from the end of September
2020, to ¥29,450 million.
Current assets decreased ¥902 million, mainly reflecting a decrease in cash and deposits, notes andaccounts receivable-trade. Non-current assets decreased ¥194 million, chiefly due to a decrease incustomer-related assets and deferred tax assets.
Current liabilities decreased ¥541 million, primarily reflecting a decrease in accounts payable-other andincome taxes payable. Non-current liabilities decreased ¥77 million, chiefly due to a decrease in long-termloans payable.
Net assets decreased ¥477 million attributable to a decrease in subscription rights to shares, noncontrolling interests and ¥220 million posted as profit attributable to owners of parent, which offset cash
dividends paid.
(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-term and long-term perspectives in its engagement in the healthcare business,
which has a strong potential for future growth and may move toward a stock-type business with the provisionof long-term support according to the life stage of the individual customer. Therefore, the Company is3

committed to implementing a variety of measures to achieve sales growth.
Among others, the cloud drug record service will aid the healthcare business in its attainment of continuous
sales growth, since the appetite for introducing the service has been growing for some time due to the revisionof the Medical Fee System. The Company will proactively work to accelerate the expansion of the service's
sales in collaboration with its partner, Medipal Holdings Corporation.
The Company will take actions to increase the number of paying subscriptions to its online medical
examination and online medication advice services, and also increase their use so they play greater roles insegment earnings in the medium-term future.
The Company continues to hold its consolidated earnings forecasts for the first half of the fiscal year ending
September 30, 2021 and for the entirety of the fiscal year as announced on November 4, 2020.
Earnings forecast for the six months of the fiscal year ending September 30, 2021
(Period from October 1, 2020 to March 31, 2021)(Millions of yen)

YoY(%)

12,750 ~ 13,250(1.5) ~ 2.3

Operating income

1,000 ~1 ,200

(30.9) ~ (17.1)

Ordinary income

1,000 ~ 1,200(23.7) ~ (8.4)

Profit attributable toowners of parent

650 ~ 850

(47.8) ~ (31.8)

Net sales

Earnings forecast for the fiscal year ending September 30, 2021
(Period from October 1, 2020 to September 30, 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

2,100 ~ 2,500

0.8 ~ 20.0

Profit attributable toowners of parent

1,300 ~ 1,700

156.4 ~ 235.3

4

2. Quarterly consolidated financial statements and important notes（1） Quarterly consolidated balance sheet（Unit: thousands of yen）
Previous fiscal year
(As of September 30, 2020)

Current fiscal year
(As of December 31, 2020)

AssetsCurrent assets
Cash and deposits

13,354,028

12,948,850

Notes and accounts receivable-trade

4,840,902

4,441,232

Other

1,585,024

1,488,359

Allowance for doubtful accounts(36,222)(36,744)

19,743,732

18,841,697

193,757

176,240

Software1,281,608

1,329,341

Goodwill

692,054641,256

1,755,000

1,649,700

35,437

38,1283,764,099

3,658,426

4,536,380

4,552,358

493,882

504,989

1,766,869

1,664,926

Other

74,48778,077

Allowance for doubtful accounts(25,824)(26,024)

Total investment and other assets

6,845,793

6,774,326

10,803,650

10,608,993

30,547,383

29,450,691

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

Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets

Total non-current assets
Total assets

5

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

Current fiscal year
(As of December 31, 2020)

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

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

1,030,593
451,780
1,202,750
236,328
195,972
111,585

Other

1,067,387

996,569

Total current liabilities

4,766,705

4,225,579

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

2,769,465
1,415,949
6,824

Total non-current liabilities

4,270,094

4,192,239

Total liabilities

9,036,799

8,417,818

Net assets
Shareholders' equity
Capital stock
Capital surplus

5,138,116
6,551,222

5,149,899
6,503,213

Retained earning
Treasury shares

10,707,058(3,283,663)(3,287,585)

Total shareholders' equity

19,112,733

18,854,624

19,89753,969(15,927)

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment(11,666)
46,010Remeasurements of defined benefit plans
Total accumulated other comprehensive income

10,489,096

44,56054,24182,603

Subscription rights to shares
Non-controlling interests

345,2991,998,309

215,958
1,879,685

Total net assets

21,510,583

21,032,872

30,547,383

29,450,691

Total liabilities and net assets

6

（2） Quarterly consolidated statements of income and quarterly consolidated statementof comprehensive income
Quarterly consolidated statement of income
For the first quarter(Unit: thousands of yen)
For the first quarterof the previous fiscal year
(from October 1, 2019
to December 31, 2019)

For the first quarterof the current fiscal year
(from October 1, 2020
to December 31, 2020)

Net sales
Cost of sales

6,118,127
1,627,492

6,304,514
1,593,032

Gross profit

4,490,635

4,711,482

Selling, general and administrative expenses

3,904,628

4,157,761

586,006

553,720

22
7,067
2,279

16

Operating income
Non-operating income
Interest income
Dividend income
Amortization of negative goodwill

999

－
－
20,070

Other

8,485

10,522

Total non-operating income

18,85330,60999

1,737

194,231

83,336

2,017

－
205
3,788

Subsidy income

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Provision of allowance for doubtful accounts
Other

－
3,967
200,315

89,067

Ordinary income

Total non-operating expenses

404,544495,262

Extraordinary income
Gain on sales of investment securities

83,624

2,934

83,624

2,934－
48,65976,9495,586
11

Total extraordinary income
Extraordinary losses
Impairment loss
Loss on retirement of non-current assets
Loss on valuation of investment securities－

Total extraordinary losses

48,65982,547

Income before income taxes

439,509415,649

Income taxes-current
Income taxes-deferred

153,928
80,874203,187
95,221

Total income taxes

234,803

298,408

Profit204,706

117,240

Loss attributable to non-controlling interests(26,648)(103,289)

Profit attributable to owners of parent

231,354

220,530

7

Quarterly consolidated statement of comprehensive income
For the first quarter(Unit: thousands of yen)
For the first quarterof the previous fiscal year
(from October 1, 2019
to December 31, 2019)

For the first quarterof the current fiscal year
(from October 1, 2020
to December 31, 2020)

ProfitOther 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

204,706

117,240(4,566)
1,573
1,570

17,444(4,538)(1,499)33,206

16,90531,78428,362Comprehensive income

236,490

145,603(Comprehensive income attributable to)Comprehensive income attributable to ownersof parent
Comprehensive income attributable to non-controllinginterests

263,138

248,892(26,648)(103,289)8