UNOFFICIAL TRANSLATION
The formal official document is in Japanese

Summary of Consolidated Financial Results for the First Half of
Fiscal Year ending September 30, 2022 (Japanese Accounting Standards)
May 12, 2022
Listed Company Name: MTI Ltd.
Listing Exchanges: Tokyo Stock Exchange
Securities Code:9438
URL: https://ir.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): May 16, 2022
Scheduled date of dividend payment: June 17, 2022
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, 2022
(October 1, 2021 – March 31, 2022)(Percentages represent year-on-year changes)(1) Consolidated operating results (cumulative total)
Net sales
Millions of yen

First half of fiscal year ending
September 30, 2022
First half of fiscal year ended
September 30, 2021
(Note) Comprehensive income:Operating income% Millions of yen

Profit attributable toowners of parent

Ordinary income% Millions of yen% Millions of yen%

12,975(0.5)

599(51.4)

292(65.2)

123–

13,0460.6

1,232(14.8)

840(35.8)(1,416)–Six months ended March 31, 2022: 47 millions of yen –%Six months ended March 31, 2021: (1,131) millions of yen –%Net income
Net income
per shareper share/diluted

First half of fiscal year ending
September 30, 2022
First half of fiscal year ended
September 30, 2021

Yen

Yen

2.25

2.25

(25.92)–(2) Consolidated financial position
Total assets

Equity ratio

Millions of yen%

29,20731,90819,241
21,24352.9
54.6

As of March 31, 2022
As of September 30, 2021
(Reference) Shareholders’ equity:

Net assets

Millions of yen

As of March 31, 2022: 15,438 millions of yen
As of September 30, 2021: 17,426 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, 2021
Fiscal year ending September 30,
–
8.00
2022
Fiscal year ending
September 30, 2022(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, 2022
(October 1, 2021 – September 30, 2022)
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(0.9)
1,000 (48.2)
500(63.5)
Full year〜26,500 〜2.9
〜1,400 〜(27.5)〜900 〜(34.3)(Note) Revisions to forecasts for consolidated business results published most recently: Yes

100
〜500

%

Yen

–

1.82
〜9.12

* 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:

ApplicableNot applicableNot applicableNot applicable(4) Number of outstanding shares (common shares)(i) Number of shares outstanding at the end of period (including treasury shares):3/22:61,248,200 shares
9/21: 61,248,200 shares(ii) Number of treasury shares at the end of period
3/22: 6,448,673 shares

9/21: 6,496,273 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Six months ended 3/2022: 54,762,393 shares

Six months ended 3/2021: 54,664,318 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.
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.
While the Company planned to hold a briefing on earnings chiefly for securities analysts and institutional investors on Friday, May
13, 2022, to prevent the spread of infections by the COVID-19 coronavirus the Company will forgo holding at the venue event andwill 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 ............................................................................... 6(1) Quarterly consolidated balance sheet ................................................................................................................ 6(2) Quarterly consolidated statement of income and quarterly consolidated statementof comprehensive income ............................................................................................................................... 8(3) Quarterly consolidated statement of cash flows ............................................................................................ 10-1-

1. Qualitative information on financial results for the current settlement(1) Explanation on operating results
Overview of the first half ended March 31, 2022 (Period from October 1, 2021 to March 31, 2022)
Looking at the Group's first half under review, the Japanese economy was severely affected by the prolonged
COVID-19 pandemic, although the impact on the Group's consolidated financial results was minor.
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, and to promote sales of child bearing-related solutions, such as
the maternal health record book app, to local governments.
As a result, net sales stood at ¥12,975 million yen (down 0.5% year on year).
Gross profit declined to ¥9,160 million (down 4.9% year on year) although net sales remained almost at thesame level. This is because the other business, where the rate of cost of sales was high, accounted for a larger
percentage of total net sales due to a rise in sales in the business and low-profit projects increased in this business.
Operating income and ordinary income came to ¥599 million (down 51.4% year on year) and ¥292 million(down 65.2% year on year), respectively. This reflected an increase in selling, general and administration(SG&A) expenses due to higher personnel expenses as a result of efforts to increase the number of personnel incharge of development made to strengthen the Group’s product development capability, particularly in the school
digital transformation (DX) business that Motivation Works Inc., a subsidiary, is actively working to develop,
although there were reductions in rents linked to a shift to the teleworking system and taxes and dues.
Profit attributable to owners of parent came to ¥123 million (compared to a loss of ¥1,416 million recorded
for the same period of the previous year) due to decreases in an extraordinary loss and corporate taxes, whichmore than offset a decline in ordinary income.
Consolidated business results(Period from October 1, 2021 to March 31, 2022)
ChangeFirst half of the fiscal year
ending September 30, 2022

First half of the fiscal year
ending September 30, 2021

Millions of yen

Millions of yen

Millions of yen%

12,975

13,046

(71)

(0.5)

3,814

3,419

+395

+11.6

Gross profit

9,160

9,627

(466)

(4.9)

SG&A

8,561

8,395

+166

+2.0

Operating income

599

1,232

(633)

(51.4)

Ordinary income
Profit attributableto owners of parent

292

840

(547)

(65.2)

123(1,416)+1,540-Net sales
Cost of sales

AmountPercentage

Breakdown of SG&A
(Period from October 1, 2021 to March 31, 2022)
ChangeFirst half of the fiscal year
ending September 30, 2022

First half of the fiscal year
ending September 30, 2021

Millions of yen

Millions of yen

Millions of yen

%

8,561

8,395

+166

+2.0

Advertising expenses

758

711

+46

+6.6

Personnel expenses

3,835

3,443

+392

+11.4

Commission fee

1,538

1,574

(36)

(2.3)

Subcontract expenses

885

887

(1)

(0.2)

Depreciation

633

584

+48

+8.3

Other

909

1,193

(284)

(23.8)

Total-2-

AmountPercentage

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 “CARADA medica” health Q&A service in cooperation with healthcare professionals)
and the B2B original comic distribution business that offers original comic content to comic distributors.
This segment served 3.27 million of paying subscribers. The figure was 250 thousand smaller than at theend of September 2021. Following mobile carriers’ termination of the feature phone service, the net decreasein the number of paying subscribers expanded. Excluding this factor, however, a net decline in the numberof paying subscribers was becoming moderate owing to the solid number of new subscribers to the “AdGuard”
security-related app acquired through mobile phone stores.
Net sales stood at ¥9,076 million (down 5.8% year on year), reflecting a year-on-year decrease in thenumber of paying subscribers, which more than offset an increase in sales in the original comics business.
Operating income was ¥2,857 million (down 12.6% year on year) mainly due to a year-on-year decrease in
the number of paying subscribers.

②

Healthcare business
The healthcare business includes B2C monthly billing services under the “Luna-Luna” and “CARADA
medica” brands and B2B and B2B2C healthcare services for medical institutions and local governments,
such as the cloud drug record service and the maternal health record book app.
This segment served 620 thousand of paying subscribers. The figure was 20 thousand smaller than at theend of September 2021. On the other hand, the number of pharmacies that offer the cloud drug record service
came to 978 at the end of March 2022 (up 213 from the end of September 2021) as the result of great efforts
focused on increasing the number of pharmacies whose motivation to introduce such service is growing.
Net sales came to ¥1,885 million (down 2.5% year on year). Although a rise in the sales of the cloud drug
record service, it was not enough to offset a year-on-year decrease in the number of paying subscribers.
Operating loss was stood at ¥648 million (compared to a loss of ¥660 million recorded for the same periodof the previous year) due to the continued burden of upfront investment spending.

③

Other business
Other business includes the B2B-type AI business operated by Automagi Inc., a consolidated subsidiary, theCompany’s DX support business for large companies and solution business, and the school DX business
operated by Motivation Works Inc., a consolidated subsidiary.
In this segment, net sales stood at ¥2,659 million (up 28.9% year on year), reflecting steady sales in the AI
business and a rise in sales in the DX support business for major companies and the school DX business. The
operating loss came to ¥409 million (compared to a loss of ¥18 million recorded for the same period of theprevious fiscal year) chiefly due to a rise in the cost of sales, which resulted from an increase in low-profit
projects in the DX support business for major companies, higher personnel expenses due to an increase in
the number of personnel for strengthening the school DX business structure, and increases in subcontract
expenses for strengthening development capability and depreciation.

(2) Explanation on financial position① Assets, liabilities and net assets
At the end of the first half under review, total assets increased ¥2,701 million from the end of September
2021, to ¥29,207 million.
Current assets decreased ¥3,126 million mainly due to a fall in cash and deposits. Non-current assets rose
¥425 million chiefly due to an increase in software, which more than offset a decrease in investment securities.
Current liabilities decreased ¥551 million, primarily reflecting a decline in income taxes payable, morethan offsetting an increase in contract liabilities linked to the application of the Accounting Standard for
Revenue Recognition, etc. Non-current liabilities fell ¥148 million mainly due to a declined in long-termloans payable.
Net assets decreased ¥2,001 million due to the payment of dividends and the effects of the application of
the Accounting Standard for Revenue Recognition, etc., despite the posting of ¥123 million as profit
attributable to owners of parent.

-3-② Consolidated cash flows
At the end of the first half of the fiscal year under review, cash and deposits were ¥12,590 million, down
¥2,949 million from the end of September 2021. Cash flow by activity and principal factors in the first half
under review are as follows:
Net cash used in operating activities was ¥788 million (inflow of ¥2,037 million for the first half of theprevious fiscal year). Principal factors included the payment of income taxes, which more than offset income
before income taxes and depreciation and amortization.
Net cash used in investing activities stood at ¥1,413 million (outflow of ¥879 million for the first half ofthe previous fiscal year). Major factors included expenditure for the purchase of intangible assets (mainly
software).
Net cash used in financing activities came to ¥776 million (inflow of ¥1,287 million for the first half ofthe previous fiscal year). The main factors included payments of dividends and repayments of long-termborrowings.
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, 2022

(788)

(1,413)(776)

12,590First half of the fiscal year ending
September 30, 2021

2,037

(879)

1,287

15,811For the fiscal year ended
September 30, 2021

3,516

(1,996)649

15,540(3) Explanation of future forecast information including consolidated forecast
The Company will work hard to expand sales and cut losses of its healthcare business, which is expected toplay a key role in increasing revenue and earnings in the future. In the content business, it will make every
effort to increase the number of paying subscribers by expanding sales of the “AdGuard” security-related app
and striving to bolster the original comic distribution business.
In the other business, the Group will focus on expanding the school DX business that Motivation Works
Inc., a subsidiary of the Company, is actively working to develop. In response to a large number of businessinquiries about “BLEND”, the cloud-based school affairs support system provided by Motivation Works Inc.,
the Group is making an investment, which is upfront investment from a short-term perspective, to achievebusiness expansion from the next fiscal year. The investments are made to increase the number of personnel
to strengthen the business structure, using subcontractors to deal with increasing implementations of thesystem, and developing the system to improve its scalability.
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 B2C 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. 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.
It will also enhance childcare-related services with a focus on local governments that have introduced the“Boshimo”, a maternal health record book app, and will advance digital cooperation among local
governments, hospitals, and residents, thereby advancing its “Boshimo” childcare DX platform strategy toenable the healthcare business to make a contribution to profit in the medium term.
With regards to forecasts for consolidated business results for the fiscal year ending September 30, 2022,
operating income, ordinary income and profit attributable to owners of parent were revised as stated in the“Notice Concerning Posting of Extraordinary Losses, Differences between Forecasts and Actual Results for
the First Half of the Fiscal Year, and Revisions to Full-Year Results Forecasts” announced today.

-4-Earnings forecast for the fiscal year ending September 30, 2022
(Period from October 1, 2021 to September 31, 2022)(Millions of yen)

YoY(%)Net sales

25,500 ~ 26,500(0.9) ~ +2.9

Operating income

1,000 ~ 1,400(48.2) ~ (27.5)

Ordinary income

500 ~ 900

(63.5) ~ (34.3)

Profit attributable toowners of parent

100 ~ 500－

-5-

2. Quarterly consolidated financial statement and important notes（1） Quarterly consolidated balance sheet（Unit: thousands of yen）
Previous fiscal year
(As of September 30, 2021)

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Notes and accounts receivable - trade, and contract
assetsOther
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Software

Current fiscal year
(As of March 31, 2022)

15,540,084
4,501,674

12,590,702－

4,455,744

1,254,252

1,125,446－(33,173)(35,737)

21,262,838

18,136,156

203,001

208,166

1,791,596

2,603,305

Goodwill
Customer-related assets
Other

556,4211,333,800
30,009658,934
1,123,200
102,644

Total intangible assets

3,711,827

4,488,083

Investments and other assets
Investment securities

4,511,728

3,901,076

318,761
1,803,442
108,143

311,405
2,055,042
118,209(10,904)
6,731,170
10,646,000(10,904)
6,374,829
11,071,079

31,908,839

29,207,235

Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investment and other assets
Total non-current assets
Total assets-6-

(Unit: thousands of yen)Previous fiscal year
(As of September 30, 2021)

Current fiscal year
(As of March 31, 2022)

Liabilities
Current liabilities
Account payable-trade
Short-term borrowings
Current portion of long-term borrowings
Accounts payable-other
Income taxes payable
Contract liabilities

1,147,543－
451,780
1,230,095
2,156,218

1,090,619
204
451,780
1,221,665
91,9882,148,661

Provision for point card certificates
Other－
115,396
1,554,849

Total current liabilities

6,655,884

6,104,123

Non-current liabilities
Long-term borrowings
Retirement benefit liability

2,429,790
1,572,854

2,203,900
1,649,061

Other
Total non-current liabilities－
1,099,203

6,935

8,226

4,009,579

3,861,188

Total liabilities

10,665,464

9,965,311

Net assets
Shareholders' equity
Share capital
Capital surplus

5,197,909
6,660,831

5,212,239
6,536,932

Retained earnings
Treasury shares

8,665,046

6,718,082(3,281,839)(3,257,237)

Total shareholders' equity

17,241,947

15,210,016

165,205
5,908

173,946
41,783Remeasurements of defined benefit plans

13,87912,444

Total accumulated other comprehensive income

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

184,993

228,175

Subscription rights to shares
Non-controlling interests

161,887
3,654,545

162,652
3,641,080

Total net assets

21,243,375

19,241,924

31,908,839

29,207,235

Total liabilities and net assets-7-

（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, 2020
to March 31, 2021)

For the first halfof the current fiscal year
(from October 1, 2021
to March 31, 2022)

Net sales
Cost of sales

13,046,903
3,419,303

12,975,547
3,814,933

Gross profit

9,627,600

9,160,614

Selling, general and administrative expenses

8,395,170

8,561,400

Operating income

1,232,430

599,21466
15,61728,43821,42465
23,867
12,042Non-operating income
Interest income
Foreign exchange gains
Subsidy income
Cancellation of treasury share acquisition rights gains
Other

26,445－
17,035

Total non-operating income

91,99253,011

3,619

2,892

404,676

329,690

Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodOther

75,54926,842483,845

359,425

840,576

292,800

3,030
2,934
－

－
－
12,417

Gain on change in equity－

76,481

Total extraordinary income

5,964

88,898

8,003
24,29376,949－10,240
909

－
11

3,240

Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of non-current assets
Gain on sales of investment securities
Gain on sale of shares of subsidiaries and associates

Extraordinary losses
Loss on sale of non-current assets
Loss on retirement of non-current assets
Impairment loss
Loss on sale of investment securities
Loss on valuation of investment securities
Loss on step acquisitions
Total extraordinary losses
Income before income taxes

－

－
4,700

109,257

109,089

737,283

362,608

Income taxes-current
Income taxes-deferred

2,313,122(29,355)

7,705
351,151

Total income taxes

2,283,767

358,856

Profit (loss)(1,546,484)

3,752(129,540)(119,577)(1,416,943)

123,329

Profit (loss) attributable to non-controlling interests
Profit (loss) attributable to owners of parent-8-

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, 2020
to March 31, 2021)

For the first halfof the current fiscal year
(from October 1, 2021
to March 31, 2022)

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(1,546,484)

3,752

361,393
12,036(2,898)(20,628)
35,34244,36030,512414,891

43,791

Comprehensive income(1,131,592)

47,543(Comprehensive income attributable to)Comprehensive income attributable to ownersof parent
Comprehensive income attributable to non-controllinginterests(1,002,073)

166,511(129,518)(118,968)-9-(1,435)

（3） Quarterly consolidated statement of cash flows
For the first half ofthe current fiscal year
(from October 1, 2020
to March 31, 2021)
Cash flows from operating activities
Income before income taxes
Depreciation
Impairment loss
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts

737,283
627,388
76,949101,595

Increase (decrease) in provision for point card certificates
Increase (decrease) in retirement benefit liability
Interest and dividend income
Interest expenses
Share of loss (profit) of entities accounted for using equity
methodLoss (gain) on step acquisitions－
5,579
61,478(66)
3,619(Unit: thousands of yen)
For the first half ofthe current fiscal year
(from October 1, 2021
to March 31, 2022)
362,608
694,660
909
109,4252,564－
65,785(65)
2,892

404,676

329,690－

4,700

Loss (gain) on change in equity
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－
4,973
24,293(2,934)
224,429(20,233)(229,681)(76,481)(91,303)(15,307)

Increase (decrease) in accrued consumption taxes
Other, net

245,793
268,826(428,642)(26,628)

Subtotal

2,533,972

1,127,293

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

63(3,619)(492,471)

62(2,892)(1,912,569)

Net cash provided by (used in) operating activities

2,037,944(788,106)(93,737)(652,924)
3,030(8,503)(39,979)(1,336,048)

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－
10,240(9,176)
191,422－－
16,196

Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates
Payments for acquisition of businesses
Purchase of shares of subsidiaries resulting in change in scopeof consolidation
Proceeds from purchase of shares of subsidiaries resulting inchange in scope of consolidation
Other, net

17,102(131,803)

Net cash provided by (used in) investing activities(879,649)(1,413,899)- 10 -－－(44,500)－(29,000)－

14,014(12,813)5,417

For the first half ofthe current fiscal year
(from October 1, 2020
to March 31, 2021)(Unit: thousands of yen)
For the first half ofthe current fiscal year
(from October 1, 2021
to March 31, 2022)

Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of shares
Proceeds from share issuance to non-controlling shareholders
Dividends paid
Purchase of shares of subsidiaries not resulting in change inscope of consolidation
Purchase of treasury share acquisition rights
Purchase of treasury shares of subsidiaries

4,000,000(4,000,000)(225,890)
43,665
2,115,000(438,491)

204－(250,545)
28,660－(439,609)－(85,400)(181,550)(25,000)－(29,800)

Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents

1,287,733(776,489)

11,796

29,1132,457,824(2,949,381)

Cash and cash equivalents at beginning of period

13,354,028

15,540,084

Cash and cash equivalents at end of period

15,811,852

12,590,702- 11 -