UNOFFICIAL TRANSLATION
The formal official document is in Japanese
Summary of Consolidated Financial Results for the First Three Quarters of
Fiscal Year ending September 30, 2015 (Japanese Accounting Standards)
July 31, 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): August 12, 2015
Scheduled date of dividend payment: –Supplementary documents for quarterly results: Yes
Quarterly results briefing: Yes (for securities analysts and institutional investors)(Figures less than one million yen are omitted)

1.

Consolidated business results for the nine months ended June 30, 2015
(October 1, 2014 – June 30, 2015)(1) Consolidated operating results (cumulative total)
Net sales

Operating income

Millions of yen

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

24,881

8.1

3,528

82.7

3,439

78.7

1,944

92.6

23,010

1.9

1,931

165.6

1,925

161.7

1,009

212.9

Nine months ended June 30, 2015: 2,145 million yen (122.4%)
Nine months ended June 30, 2014: 964 million yen (124.6%)
Net income
Net income
per shareper share/diluted

First three quarters of fiscal year
ending September 30, 2015
First three quarters of fiscal year
ended September 30, 2014

Yen

Yen

36.90

36.21

20.10

19.97

The Company conducted a 2-for-1 common stock split that became effective on April 1, 2015. Net income per share and net income per share diluted are
based on the number of shares after the stock split.

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

As of June 30, 2015
As of September 30, 2014
(Reference) Shareholders’ equity:

2.

Equity ratio

Millions of yen%

22,831
15,932
16,768
9,722
As of June 30, 2015: 15,325 millions of yen
As of September 30, 2014: 9,291 millions of yen

67.1
55.4

Dividends
End of firstquarter

End of second
quarter
Yen

Yen

Fiscal year ended–
10.00
September 30, 2014
Fiscal year ending–
12.00
September 30, 2015
Fiscal year ending
September 30, 2015 (forecast)(Note) Revisions to dividend forecasts published most recently: No

Dividend per share
End of third
quarterYear end

Annual

Yen

Yen

Yen

–

12.00

–

6.00

–

–

The Company conducted a 2-for-1 common stock split that became effective on April 1, 2015. The dividend per share at the end of the second period of
the fiscal year ending September 30, 2015 is calculated based on the number of shares before the stock split, but the year-end dividend per share (forecast)is calculated based on the number of shares after the stock split. For more information, please refer to “Cautionary statement with respect to forwardlooking statements, special note.”
The dividend per share at the end of the interim period of the fiscal year ending September 30, 2015, 12 yen, is the sum of a common dividend of 10 yen
and a dividend of 2 yen in commemoration of the change in the market where the stock is listed.

3.

Forecast for consolidated business results for the fiscal year ending September 30, 2015
(October 1, 2014 – September 30, 2015)
Net sales
Millions of yen

Operating income% Millions of yen(Percentages represent year-on-year changes.)
Net income
Ordinary income
Net income
per share% Millions of yen% Millions of yen

Full year
34,000
9.7
4,200
64.2
4,120
63.5
(Note) Revisions to forecasts for consolidated business results published most recently: No

2,270

%

Yen

69.7

40.01

The Company conducted a 2-for-1 common stock split that became effective on April 1, 2015. The net income per share above is a figure after the stock
split. Net income per share before the stock split was ¥80.03* 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):6/15: 59,990,400 shares
9/14: 53,621,200 shares(ii) Number of treasury shares at the end of period
6/15: 3,260,928 shares
9/14: 3,260,928 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Nine months ended 6/15: 52,690,540 shares
Nine months ended 6/14: 50,222,471 shares
The Company conducted a 2-for-1 common stock split that became effective on April 1, 2014 and a 2-for-1 common stock split that became effective
on April 1, 2015. The number of shares issued at the end of the period (including treasury stock), the number of treasury stock shares at the end of theperiod, and the average number of shares during the period are the 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 securities analysts and institutional investors on
Monday, August 3, 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 the briefing ends.

Special note
The Company conducted a 2-for-1 common stock split that became 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) ................................................................................10

1

1 Qualitative information on financial results for the current settlement(1) Explanation on operating results
Overview of the first three quarters ended June 30, 2015 (From October 1, 2014 to June 30, 2015)
During the first three quarters under review, smartphone unit sales slowed because the smartphone penetration
rate has already exceeded 50%. However, the penetration and expansion of smartphones continued, backed by
the strong demand to replace conventional cellphones with smartphones.
In this environment, the Company aggressively conducted promotions during the busiest shopping season(March), and as a result the number of paying subscribers on smartphones increased until the second quarter. In
the third quarter, however, the number of paying subscribers declined from that at the end of March 2015 because
the said quarter is a low season for smartphone sales and the effect of releasing new smartphone models is limited.
As a result, the number of paying subscribers stood at 5.69 million at the end of June 2015 (up 0.29 million fromthe end of September 2014).
As the shift to smartphones progressed, the number of paying subscribers on feature phones has been declining,albeit at a slower pace, with the number falling to 2.04 million at the end of June 2015 (down 0.42 million).
As a result, the total number of paying subscribers decreased to 7.73 million at the end of June 2015 (down
0.13 million).
Net sales increased to ¥24,881 million (up 8.1% year on year), despite the largely unchanged number of paying
subscribers, chiefly due to a rise in the average revenue per user (ARPU) of major services and an increase insales of the unmetered plan with flat-rate monthly charges for cellphone carriers. Gross profit also rose to¥20,933 million (rising 8.5% year on year).
Operating income, ordinary income, and net income came to ¥3,528 million (up 82.7%), ¥3,439 million (up78.7%), and ¥1,944 million (up 92.6%) respectively, reflecting an increase in gross profit and the appropriate
control of selling, general, and administrative expenses (SG&A) through meaningful use.
Consolidated business results(From October 1, 2014 to June 30, 2015)
First three quarters
First three quartersof 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

24,881

23,010+1,871+8.1

Cost of sales

3,947

3,714

+233

+6.3

Gross profit

20,933

19,295+1,638+8.5

SG&A

17,405

17,364+40+0.2

Operating income

3,528

1,931

+1,597+82.7

Ordinary income

3,439

1,925

+1,514+78.7

Net income

1,944

1,009

+934

+92.6

2

Breakdown of SG&A
(From October 1, 2014 to June 30, 2015)
ChangeFirst three quarters of
the fiscal year ending
September 30, 2015

First three quarters of
the fiscal year ended
September 30, 2014

Millions of yen

Millions of yen

Millions of yen%

17,405

17,364+40+0.2

Advertising expenses

6,497

6,042

+454

+7.5

Personnel expenses

4,211

4,250

Commission fee

2,758

2,525

-39

+233

-0.9

+9.2

Subcontract expenses

1,027

1,382

Depreciation

1,009

1,341

-354

-25.7

Other

1,900

1,822

+78

+4.3

Total

PercentagechangeAmount

-331

-24.7

(2) Explanation on financial position
Assets, Liabilities and Net assets
At the end of the first three quarters under review, total assets rose ¥6,063 million from the end of September
2014 to ¥22,831 million.
Current assets increased ¥5,874 million mainly due to increases in cash and deposits and notes and accounts
receivable-trade. Non-current assets increased ¥188 million as a result of growth in goodwill, offsetting adecrease in deferred tax assets.
Current liabilities rose ¥245 million, primarily reflecting increases in the current portion of long-term loans
payable. Non-current liabilities fell ¥391 million, chiefly due to a decrease in long-term loans payable.
Net assets increased ¥6,209 million, largely as a result of an increase in capital through a public offering andthe posting of ¥1,944 million in net income, even though cash dividends were paid.
Total assets

First three quarters of the fiscal year
ending September 30, 2015
Fiscal year ended
September 30, 2014

Net assets

Equity ratio

Millions of yen

Millions of yen%

22,831

15,932

67.1

16,768

9,722

55.4

(3) Explanation of future forecast information including consolidated forecast
In the fourth quarter, the Company will continue to focus on boosting 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, which is having the largest sales channel by
far for promoting sales of its own content and that of other companies to customers at cellphone shops acrossJapan, the Company will strive to expand the number of paying subscribers on smartphones of its own content,
and bolster sales commissions for the content of other companies.
The number of paying subscribers for the general store “music.jp” (400 yen/month excl. tax) that distributes
music, books, and videos has been steadily growing, and the Company will continue to promote its growth toincrease the ARPU. In July, the Company launched a service integrating weather information and map
navigation.
In healthcare-related information services, the Company will expand the number of paying subscribers on a
Q&A website on health where healthcare-related professionals respond to questions 24 hours a day. This site
was provided at a fixed rate of ¥300 per month (excl. tax), but a new service was also added in June at a rate of¥400 per month (excl. tax).
As sales of the unmetered plan with flat-rate monthly charges for cellphone carries continue to increase, the3Company will aggressively take measures that will contribute to the sustainable expansion of sales.
Our forecast for consolidated business results for the fiscal year ending September 30, 2015 is as described in
the notice of revisions to forecasts for consolidated business results and dividends that was announced on
February 4, 2015.

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) Changes in important subsidiaries during the period
Not applicable.
(2) Adoption of specific accounting methods for producing quarterly consolidated financial
statement
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 theprovisions 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 andchanged the method of determining the discount rate from the method of using a discount rate based on
the number of years that approximates the average remaining service lives of employees to the method ofusing a single weighted average discount rate that reflects the expected payment period of retirement
benefits and the amount for each 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 three quarters underreview in accordance 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 three quarters 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 three quarters under review is minor.

5

3 Quarterly consolidated financial statements（1） Quarterly consolidated balance sheets
Fiscal year ended September 30, 2014 and first three quarters of ending September 30, 2015
(Thousands of yen)
As of September 30, 2014

As of June 30, 2015

AssetsCurrent assets
Cash and deposits

4,782,677

10,302,344

Notes and accounts receivable-trade
Deferred tax assets

6,294,778
378,136

6,687,122
253,933

Other
Allowance for doubtful accounts

836,262-108,691

902,337-87,938

12,183,163

18,057,799

143,032

142,700

Intangible assets
Software2,150,300

2,182,922

Goodwill
Other

2,355
25,034

262,834
24,213

Total intangible assets

2,177,690

2,469,970

Investments and other assets
Investment securities

813,082

847,192

Lease and guarantee deposits
Deferred tax assets

489,586
883,432

503,825741,282

Other
Allowance for doubtful accounts

99,694-21,31786,715-17,589

Total investment and other assets

2,264,478

2,161,426

Total current assets
Noncurrent assets
Property, plant and equipment

Total noncurrent assets
Total assets

6

4,585,200

4,774,097

16,768,363

22,831,897

(Thousands of yen)
As of September 30, 2014

As of June 30, 2015

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

976,524

1,009,781－

518,6622,317,692

2,292,568

674,912784,324
156,927

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

Total current liabilities

5,727,424

5,972,711

Long-term loans payable
Net defined benefit liability

500,000
768,368

84,602
799,337

Negative goodwill
Other49,659141

42,820319

1,318,168

927,079

7,045,593

6,899,790

Shareholders' equity
Capital stock

2,596,342

4,890,801

Capital surplus
Retained earning

3,111,863
4,305,998

5,406,321
5,648,357

233,438
977,007

Noncurrent liabilities

Total noncurrent liabilities
Total liabilities
Net assets

Treasury stock-695,491-695,491

Total shareholders' equity

9,318,712

15,249,988

74,198144,131-31,735-4,916-69,979-63,721-27,51675,493206,905

161,520

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

224,667

445,103

Total net assets

9,722,770

15,932,106

16,768,363

22,831,897

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 three quarters of the fiscal year ended September 30, 2014 and fiscal year ending September 30, 2015
(Thousands of yen)First three quarters of the fiscal
year ended September 30, 2014

First three quarters of the fiscal
year ending September 30, 2015

Net sales

23,010,383

24,881,485

Cost of sales

3,714,711

3,947,714

Gross profits

19,295,672

20,933,771

Selling, general and administrative expenses

17,364,623

17,405,260

Operating income

1,931,049

3,528,511

Interest income
Dividend income

163
4,559

138
6,059

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

8,254
4,868

6,838
4,558

Compensation income
Other

7,416
8,120

12,37536,707

Total non-operating income

33,383

66,676

7,373

3,617

24,857

97,268－24,815

7,005

29,548Non-operating income

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

39,236

155,249

1,925,196

3,439,938－

33,50938,550－38,55033,509Loss on retirement of noncurrent assets
Impairment loss－
69,172

5,183
20,820Loss on retirement of noncurrent assets
Loss on sales of investment securities

101,126
1,087

64,153－

Loss on valuation of investment securities
Settlement package

137,756－－
15,468

Total extraordinary loss

309,141

105,626

1,654,605

3,367,821

574,434

1,113,322

Ordinary income
Extraordinary income
Gain on step acquisitions
Gain on sales of shares of subsidiaries andassociates
Total extraordinary income
Extraordinary loss

Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred

77,029206,638

Total income taxes

651,463

1,319,960

1,003,141

2,047,860-6,254

103,710

1,009,396

1,944,150

Income before minority interests
Minority interests in income (loss)
Net income

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

First three quarters of the fiscal
year ending September 30, 2015

1,003,141

2,047,860

16,87370,080-55,536

17,799

－

6,258

175

3,155

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-38,487

97,293Comprehensive income

964,653

2,145,154(Comprehensive income attributable to)Comprehensive income attributable toowners of the parent
Comprehensive income attributable tominority interests

979,649

2,047,160-14,995

97,9939

（3） Notes concerning quarterly consolidated financial statements(Notes concerning going concern assumption)
Not applicable.
(Notes on significant changes in shareholders’ equity)
The Company carried out a capital increase through a public offering in which the due date of payment
was March 23, 2015 and a capital increase through a private placement associated with overallotment inwhich the due date of payment was March 27, 2015. Following the capital increases, capital stock andlegal capital surplus each increased 2,166,450,000 yen.
In the first three quarters under review, the Company issued new shares in association with the exerciseof subscription rights to shares. Consequently, capital stock and legal capital surplus each rose
128,008,000 yen.
As a result, in the first three quarters under review, capital stock and legal capital surplus each increased
2,294,458,000 yen, and at the end of the first three quarters, capital stock and capital surplus came to4,890,801,000 yen and 5,406,321,000 yen, respectively.

10