UNOFFICIAL TRANSLATION
The formal official document is in Japanese
Summary of Consolidated Financial Results for the First Quarter of
Fiscal Year ending September 30, 2015 (Japanese Accounting Standards)
February 4, 2015
Listed Company Name: MTI Ltd.
Listing Exchanges: Tokyo Stock Exchange
Securities Code:9438
URL: http://www.mti.co.jp
Representative:
Toshihiro Maeta, President and Chief Executive Officer
Contact:
Hiroshi Matsumoto, Director
Phone: +81-3-5333-6323
Scheduled date to submit the Quarterly Securities Report (Shihanki Houkokusho): February 12, 2015
Scheduled date of dividend payment: –Supplementary documents for quarterly results: Yes
Quarterly results briefing: Yes (for institutional investors)(Figures less than one million yen are omitted)

1. Consolidated business results for the three months ended December 31, 2014
(October 1, 2014 – December 31, 2014)(1) Consolidated operating results (cumulative total)
Net sales
Millions of yen

First quarter of fiscal year ending
September 30, 2015
First quarter of fiscal year ended
September 30, 2014
(Note) Comprehensive income:(Percentages represent year-on-year changes)
Ordinary income
Net income

Operating income% Millions of yen% Millions of yen% Millions of yen

%

8,209

9.5

1,333

46.7

1,315

51.1

761

78.8

7,498

2.3

909

323.6

870

303.1

425

129.8

Three months ended December 31, 2014: 880 million yen (95.2%)
Three months ended December 31, 2013: 451 million yen (81.2%)
Net income
Net income
per shareper share/diluted

First quarter of fiscal year ending
September 30, 2015
First quarter of fiscal year ended
September 30, 2014

Yen

Yen

30.23

29.83

16.96

16.86

We conducted a 2-for-1 share split which became effective as of April 1, 2014. Net income per share is calculated on the assumption that this share split was carriedout at the beginning of the previous fiscal year.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

As of December 31, 2014
As of September 30, 2014
(Reference) Shareholders’ equity:

Equity ratio

Millions of yen%

16,742
10,347
58.8
16,768
9,722
55.4
Year ending 9/15(as of December 31, 2014): 9,846 million yen
Year ended September 2014: 9,291 million yen

2. Dividends
End of firstquarter
Fiscal year ended
September 30, 2014
Fiscal year ending
September 30, 2015
Fiscal year ending
September 30, 2015 (forecast)End of second
quarter

Dividend per share
End of third
quarterYear end

Annual

Yen

Yen

Yen

Yen

Yen

–

10.00

–

12.00

–

10.00

–

6.00

–

–

(Note) Revision of dividend forecast for during this period : Yes
We will conduct a 2-for-1 share split which becomes effective on April 1, 2015, in accordance with “Notice Regarding Share Split, Partial Changeof By-laws” released on February 4, 2015. Therefore dividends per share at the end of 2Q FY2015 (estimate) is calculated based on the figures
before the share split. However, the Year-end dividends per share are calculated based on the figures after the share split. For details, please refer
to “*Explanation for Appropriate Use of Forecasts and Other Notes” in the next page.

3. Forecast for consolidated business results for the fiscal year ending September 30, 2015
(October 1, 2014 – September 30, 2015)
Net salesFirst half year
Full year(Percentages represent year-on-year changes.)
Net income
Ordinary income
Net income
per share

Operating income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

16,70034,000

9.3
9.7

2,000
4,200

53.3
64.2

1,960
4,120

49.6
63.5

1,040
2,270

31.5
69.7

20.65
45.07

(Note) Revisions to forecasts for consolidated business results published most recently: Yes
Net income per share in “Consolidated Forecast for the Fiscal Year Ending September 30, 2015” is calculated on the assumption that this 2-for-1
share split, which becomes effective on April 1, 2015, was carried out at the beginning of the current fiscal year. Net income per share without
consideration of share split is ¥41.29 for 2Q (Total) and ¥90.13 for Full-year term.

* 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:Yes
Not applicableNot applicableNot applicable(4) Number of outstanding shares (common shares)(i) Number of shares outstanding at the end of period (including treasury shares):12/14: 26,816,000 shares
9/14: 26,810,600 shares(ii) Number of treasury shares at the end of period
12/14: 1,630,464 shares
9/14: 1,630,464 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Three months ended 12/14: 25,183,044 shares Three months ended 12/13:25,107,558 shares
The Company conducted a 2-for-1 common stock split that became effective on April 1, 2014. The number of shares issued at the end of the period(including treasury stock), the number of treasury stock shares at the end of the period, and the average number of shares during the period are numbers
after these stock splits.

* Status of a quarterly review
A quarterly review under the Financial Instruments and Exchange Act was being conducted at the publication of this summary of
consolidated financial results.

* 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.
The Company will hold a briefing on earnings in the first three quarters chiefly for institutional investors on Thursday, February 5,
2015. A video of the briefing and a document to be used at the briefing will be posted on the Company’s website as soon as thebriefing ends. (A video is Japanese only.)Special note
The Company will conduct a 2-for-1 common stock split that become effective on April 1, 2015.

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 ................................................ 3
2. Matters relating to summary information (Notes)..................................................................................................... 5(1) Changes in important subsidiaries during the period ...................................................................................... 5(2) Adoption of specific accounting methods for producing quarterly consolidated financial statements ......... 5(3) Changes in accounting policies, changes in accounting estimates, restatements .......................................... 5
3. Quarterly consolidated financial statements ........................................................................................................... 6(1) Quarterly consolidated balance sheet ............................................................................................................ 6(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive
income ................................................................................................................................................................ 8(3) Notes concerning quarterly consolidated financial statements ....................................................................10(Notes concerning going concern assumption) ............................................................................................10(Notes on significant changes in shareholders’ equity) ................................................................................101

1

Qualitative information on financial results for the current settlement(1) Explanation on operating results
During the first quarter under review, smartphone unit sales slowed as the smartphone penetration rate hadalready exceeded 50%. However, as replacement demand was strong, the penetration and expansion ofsmartphones continued.
In this environment, the Company aggressively conducted promotions during the shopping season in
December and focused on the expansion of the number of paying subscribers on smartphones by continuously
providing meticulous support to cellphone shops originating from sales offices which the Company establishedacross Japan in the previous fiscal year. As a result, the number of paying subscribers stood at 5.52 million at
the end of December 2014 (up 0.12 million from the end of September 2014).
Although the shift to smartphones progressed, the number of paying subscribers on feature phones has been
declining at a slower pace, falling 0.15 million to 2.31 million by the end of December 2014. As a result, thetotal number of paying subscribers stood at 7.83 million at the end of December 2014 (down 30,000 from theend of September 2014).
Net sales increased to ¥8,209 million (up 9.5% year on year) due to measures to boost the average revenue
per user (ARPU) in major services and the increase in sales of the unmetered plan with flat-rate monthly charges
for cellphone carriers. Gross profit also rose to ¥6,865 million (rising 9.3% year on year).
Operating income, ordinary income and net income came to ¥1,333 million (up 46.7%), ¥1,315 million (up51.1%) and ¥761 million (up 78.8%) respectively, reflecting the increase in gross profit and the appropriate
control of higher selling, general and administrative expenses (SG&A) through meaningful use.
Consolidated business results(From October 1, 2014 to December 31, 2014)
First quarter
First quarterof the fiscal year ending of the fiscal year ended
September 30, 2015
September 30, 2014

ChangePercentagechangeAmountmillions of yen

millions of yen

millions of yen%

Net sales

8,209

7,498

+710

+9.5

Cost of sales

1,343

1,219

+124

+10.2

Gross profit

6,865

6,279

+585

+9.3

SG&A

5,532

5,370

+161

+3.0

Operating income

1,333

909

+424

+46.7

Ordinary income

1,315
761

870
425

+444
+335

+51.1
+78.8

Current net income

Breakdown of SG&A
(From October 1, 2014 to December 31, 2014)
First quarter
First quarterof the fiscal year ending of the fiscal year ended
September 30, 2015
September 30, 2014

ChangePercentagechangeAmountmillions of yen

millions of yen

millions of yen

%

Total

5,532

5,370

+161

+3.0

Advertising expenses

2,021

1,685

+335

+19.9

Personnel expenses

1,374

1,403

-29

-2.1

Commission fee

896

806

+90

+11.2

Subcontract expenses

350

438

-88

-20.1

Depreciation

353

444

-90

-20.4

Other

535

592

-56

-9.6

2

(2) Explanation on financial position
1) Assets, Liabilities and Net assets
At the end of the first quarter under review, total assets declined ¥25 million from the end of September 2014
to ¥16,742 million.
Current assets decreased ¥20 million mainly due to the fall in cash and deposits, while notes and accounts
receivable-trade increased. Non-current assets declined ¥5 million, largely as a result of the decrease in software,
offsetting the increase in investment securities.
Current liabilities dropped ¥619 million, primarily reflecting the decline in consumption taxes payable, despite
the increase in accounts payable-trade. Non-current liabilities fell ¥31 million chiefly due to the decrease in theprovision for retirement benefits.
Net assets increased ¥624 million due to the posting of ¥761 million in net income, even though cash dividends
were paid.

Total assets

Net assets

Equity ratio

millions of yen

millions of yen%

As of December 31, 2014

16,742

10,34758.8

As of September 30, 2014

16,768

9,722

55.4

(3) Explanation of future forecast information including consolidated forecast
From the second quarter, the Company will continue to focus on the expansion of the number of paying
subscribers on smartphones and work to increase the average revenue per user (ARPU).
Taking advantage of the strength the Company has developed, the largest sales channel, by far, for promoting
sales of its own content and that of other companies to customers at cellphone shops across Japan, the Company
will strive to expand the number of paying subscribers on smartphones of its own content, and bolster salescommissions for the content of other companies.
The Company commenced music.jp: Music and Book Shop (a fixed rate of ¥400 per month excluding tax),
services integrating music, electronic books and comics, in September 2014. In addition, the Company plans tocommence higher-value added services, to which videos will be added this spring in cooperation with Video
Market Corporation, an equity method affiliate, to expand the number of paying subscribers on smartphones andincrease the ARPU.
In healthcare-related information services, the Company will increase the number of paying subscribers on
Luna-Luna Family (a fixed rate of ¥300 per month excluding tax), the high-value added service of Luna-Luna,
and work to increase the users further through the enhancement of the Luna-Luna Lite services, which are usedby a little less than 7 million customers.
As sales of the unmetered plan with flat-rate monthly charges for cellphone carriers continue to increase, theCompany will aggressively take measures that will contribute to the continuous expansion of sales.
Our forecasts for consolidated business results for the first half and the full-year of the fiscal year ending
September 30, 2015 are described in a notice of revisions to forecasts for consolidated business results anddividends announced on February 4, 2015, and both sales and profits are expected to reach record highs.
Forecast for consolidated business results for the first half of fiscal year ending September 30, 2015
(From October 1, 2014 to March 31, 2015)
Consolidated
Net sales

16,700 millions of yen(Up 9.3% year on year)

Operating income

2,000 millions of yen(Up 53.3% year on year)

Ordinary income

1,960 millions of yen(Up 49.6% year on year)

Net income

1,040 millions of yen(Up 31.5% year on year)3Forecast for consolidated business results for the fiscal year ending September 30, 2015
(From October 1, 2014 to September 30, 2015)
Consolidated
Net sales

34,000 millions of yen(Up 9.7% year on year)

Operating income

4,200 millions of yen(Up 64.2% year on year)

Ordinary income

4,120 millions of yen(Up 63.5% year on year)

Net income

2,270 millions of yen(Up 69.7% year on year)42
Matters relating to summary information (Notes)(1) Important changes of subsidiaries during the term
Not applicable.
(2) Adoption of specific accounting methods for producing quarterly consolidated financial
statements
Not applicable.
(3) Changes in accounting policies, changes in accounting estimates, restatements
Not applicable.
（Adoption for accounting policies concerning provision for retirement benefits）
Effective from the first quarter of the current fiscal year under review, the Company adopted the provisions
set forth in the main clauses of paragraph 35 of the “Accounting Standard for Retirement Benefits” (ASBJ
Statement No. 26, May 17, 2012; “the Accounting Standard for Retirement Benefits”) and paragraph 67 of
the “Guidance on Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012;“the Guidance on Accounting Standard for Retirement Benefits”). Consequently, the Company has reviewed
the method of calculating retirement benefit obligations and service costs and changed the method ofdetermining the discount rate from the method of using a discount rate based on the number of years thatapproximates the average remaining service lives of employees to the method of using a single weighted
average discount rate that reflects the expected payment period of retirement benefits and the amount foreach expected payment period.
With respect to the application of the Accounting Standard for Retirement Benefits, etc., the amount of
impact associated with the change of the calculation method of retirement benefit obligations and service
costs is added to or subtracted from retained earnings at the beginning of the first quarter under review inaccordance with the transitional treatment as stipulated in paragraph 37 of the Accounting Standard for
Retirement Benefits.
As a result, at the end of the first quarter under review, the defined benefit liability declined ¥61,720
thousand while retained earnings increased ¥39,723 thousand. The impact on operating income, ordinary
income and income before income taxes in the first quarter under review is minor.

5

1 Quarterly consolidated financial statements（1） Quarterly consolidated balance sheets
Fiscal year ended September 30, 2014 and the first quarter of fiscal year ending September 30, 2015
(Thousands of yen)Previous fiscal year
(As of September 30, 2014)

Current fiscal year
(As of December 31, 2014)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

4,782,677
6,294,778

4,451,387
6,445,296

Deferred tax assets
Other

378,136
836,262

215,065
1,155,473

Allowance for doubtful accounts-108,691-104,545

12,183,163

12,162,677

143,032

137,865

Intangible assets
Software2,150,300

2,039,806

Goodwill
Other

2,355
25,034

1,850
24,428

Total intangible assets

2,177,690

2,066,085

Investments and other assets
Investment securities

813,082

951,788

Lease and guarantee deposits
Deferred tax assets

489,586
883,432

491,832
866,800

Other
Allowance for doubtful accounts

99,694-21,31786,666-1,317

Total investment and other assets

2,264,478

2,375,770

Total current assets
Noncurrent assets
Property, plant and equipment

Total noncurrent assets
Total assets

6

4,585,200

4,579,721

16,768,363

16,742,398

(Thousands of yen)Previous fiscal year
(As of September 30, 2014)

Current fiscal year
(As of December 31, 2014)

Liabilities
Current liabilities
Account payable-trade
Accounts payable-other976,524
2,317,692

1,049,185
2,345,931

Income taxes payable
Provision for bonuses

674,912301,157
144,475

Allowance for coin usage
Other－
277,447
1,480,847

229,888
1,037,246

Total current liabilities

5,727,424

5,107,884

Noncurrent liabilities
Long-term loans payable

500,000

500,000

768,368
49,659736,665
47,379Net defined benefit liability
Negative goodwill
Other

141

2,808

1,318,168

1,286,853

7,045,593

6,394,738

Capital stock
Capital surplus

2,596,342
3,111,863

2,598,449
3,113,970

Retained earning
Treasury stock

4,305,998-695,491

4,804,863-695,491

Total shareholders' equity

9,318,712

9,821,791

74,198100,851-31,735-69,979-8,733-66,923-27,516

25,194

206,905
224,667

211,081289,593

9,722,770

10,347,660

16,768,363

16,742,398

Total noncurrent liabilities
Total liabilities
Net assets
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive
incomeSubscription rights to shares
Minority interests
Total net assets
Total liabilities and net assets

7

（2） Quarterly consolidated statements of income and quarterly consolidated statementsof comprehensive income
Quarterly consolidated statements of income
For the first quarter of the fiscal year ended September 30, 2014 and fiscal year ending September 30, 2015
(Thousands of yen)First quarter of the previous
fiscal year

First quarter of the current
fiscal year

(from October 1, 2013
to December 31, 2013)(from October 1, 2014
to December 31, 2014)

Net sales

7,498,892

8,209,168

Cost of sales

1,219,214

1,343,629

Gross profits

6,279,677

6,865,539

Selling, general and administrative expenses

5,370,662

5,532,205

909,015

1,333,333

36
681

18
2,196

Amortization of negative goodwill
Gain on reversal of subscription rights to shares

2,279
891

2,279
3,866

Compensation income
Insurance income

7,416
－

－
5,000

Other

4,470

6,908

Total non-operating income

15,775

20,269

3,318

1,364

46,555

21,1294,242

15,606

Operating income
Non-operating income
Interest income
Dividends income

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using
equity method
Other
Total non-operating expenses
Ordinary income

54,116

38,100870,674

1,315,502

Extraordinary income
Extraordinary loss
Loss on retirement of noncurrent assets

15,88532,19815,88532,198

Income before income taxes and minority interests

854,789

1,283,304

Income taxes-current

348,162

308,935

Income taxes-deferred

77,728139,005

Total income taxes

425,891

447,941

Income before minority interests

428,897

835,362

Minority interests in income (loss)

3,017

74,059425,880

761,303

Total extraordinary loss

Net income

8Quarterly consolidated statements of comprehensive income
For the first quarter of the fiscal year ended September 30, 2014 and fiscal year ending September 30, 2015
(Thousands of yen)First quarter of the previous
fiscal year

First quarter of the current
fiscal year

(from October 1, 2013
to December 31, 2013)(from October 1, 2014
to December 31, 2014)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net oftax
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income

428,897

835,362

14,34326,652

7,211

13,083

－

3,055

702

2,407

22,25745,199Comprehensive income

451,155

880,562(Comprehensive income attributable to)Comprehensive income attributable toowners of the parent
Comprehensive income attributable tominority interests

446,445814,013

4,710

66,5489

（3） Notes concerning quarterly consolidated financial statements(Notes concerning going concern assumption)
Not applicable.
(Notes on significant changes in shareholders’ equity)
Not applicable.

10