UNOFFICIAL TRANSLATION
The formal official document is in Japanese
Summary of Consolidated Financial Results for the First Half of
Fiscal Year ending September 30, 2015 (Japanese Accounting Standards)
May 1, 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): May 13, 2015
Scheduled date of dividend payment: June 15, 2015
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 six months ended March 31, 2015
(October 1, 2014 – March 31, 2015)(1) Consolidated operating results (cumulative total)
Net sales
Millions of yen

First half of fiscal year ending
September 30, 2015
First half 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%

16,620

8.8

2,108

61.6

2,034

55.3

1,088

37.7

15,279

3.1

1,304

–

1,310

–

790

–

Six months ended March 31, 2015: 1,243 million yen (51.9%)
Six months ended March 31, 2014: 818 million yen (–)
Net income
Net income
per shareper share/diluted

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

Yen

Yen

21.46

21.19

15.74

15.63

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 March 31, 2015
As of September 30, 2014
(Reference) Shareholders’ equity:

Equity ratio

Millions of yen%

22,732
15,172
16,768
9,722
As of March 31, 2015: 14,691 millions of yen
As of September 30, 2014: 9,291 millions of yen

64.6
55.4

2. Dividends
End of firstquarterYen

End of second
quarter
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 forward-looking
statements, special note.”
The dividend per share at the end of the second period of the fiscal year ending September 30, 2015, 12 yen, is the sum of a common dividend of 10 yen anda 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

40.17

The Company conducted a 2-for-1 common stock split that became effective on April 1, 2015. Net income per share above is based on the number of shares
after the stock split. Net income per share before the stock split was ¥80.33* Note:(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):3/15: 59,777,600 shares
9/14: 53,621,200 shares(ii) Number of treasury shares at the end of period
3/15: 3,260,928 shares
9/14: 3,260,928 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Six months ended 3/15: 50,729,001 shares
Six months ended 3/14: 50,219,116 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 4 of
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 half chiefly for securities analysts and institutional investors on Friday,
May 7, 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 ................................................. 4
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) Quarterly consolidated statements of cash flows .........................................................................................10(4) Notes concerning quarterly consolidated financial statements ..................................................................... 11(Notes concerning going concern assumption) ............................................................................................ 11(Notes on significant changes in shareholders’ equity) ................................................................................ 111

1 Qualitative information on financial results for the current settlement（1） Explanation on operating results
Overview of the first half ended March 31, 2015 (From October 1, 2014 to March 31, 2015)
During the first half 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 highest shopping season(March) and focused on the expansion of the number of paying subscribers on smartphones. As a result, thenumber of paying subscribers stood at 5.90 million at the end of March 2015 (up 0.50 million from the 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, to 2.18 million at the end of March 2015 (down 0.28 million).
As a result, the total number of paying subscribers increased to 8.08 million at the end of March 2015 (up0.22 million).
Net sales increased to¥16,620 million (up 8.8% year on year) chiefly due to a rise in the average revenue peruser (ARPU) in major services and an increase in sales of the unmetered plan with flat-rate monthly charges forcellphone carriers. Gross profit also rose to ¥13,953 million (rising 9.0% year on year).
Operating income, ordinary income and net income came to ¥2,108 million (up 61.6%), ¥2,034 million (up55.3%) and ¥1,088 million (up 37.7%) respectively, reflecting the 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 March 31, 2015)
First half ofthe fiscal year ending
September 30, 2015

First half ofthe fiscal year ended
September 30, 2014

Millions of yen

Millions of yen

16,6202,666
13,953
11,845
2,108
2,034
1,088

15,2792,476
12,803
11,498
1,304
1,310
790

First half ofthe fiscal year ending
September 30, 2015

First half ofthe fiscal year ended
September 30, 2014

Millions of yen

Millions of yen

Millions of yen

11,845

11,498

+347

4,702
2,756
1,835
682
694
1,174

4,078
2,826
1,641
898
886
1,167

+623
-69
+194
-215
-192
+6

Net sales
Cost of sales
Gross profit
SG&A
Operating income
Ordinary income
Net income

ChangePercentage
AmountchangeMillions of yen%+1,340
+8.8
+190
+7.7
+1,150
+9.0
+347
+3.0
+807
+61.6
+724
+55.3
+298
+37.7

Breakdown of SG&A
(From October 1, 2014 to March 31, 2015)

Total
Advertising expenses
Personnel expenses
Commission fee
Subcontract expenses
Depreciation
Other

2

ChangeAmountPercentagechange
%
+3.0
+15.3
-2.5
+11.8
-24.0
-21.7
+0.6

（2） Explanation on financial position
1) Assets, liabilities and net assets
At the end of the first half under review, total assets rose ¥5,964 million from the end of September 2014 to¥22,732 million yen.
Current assets increased ¥6,080 million mainly due to rises in cash and deposits and notes and accounts
receivable-trade. Non-current assets declined ¥116 million as a result of a decrease in software, offsetting an
increase in investment securities.
Current liabilities rose ¥519 million, primarily reflecting increases in accounts payable-other and accounts
payable-trade. Non-current liabilities fell ¥4 million chiefly due to a decrease in negative goodwill.
Net assets increased ¥5,449 million mainly due to a capital increase through a public offering and the postingof ¥1,088 million in net income, even though cash dividends were paid.
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of March 31, 2015

22,732

15,17264.6%

As of September 30, 2014

16,768

9,722

55.4%

2) Consolidated cash flows
At the end of the first half under review, cash and cash equivalents were ¥10,116 million, an increase of ¥5,333
million from the end of September 2014. The cash flows by activities and principal factors in the first half
under review are as follows.
Net cash provided by operating activities was ¥1,919 million (inflow of ¥2,027 million for the first half ofthe previous fiscal year). Principal factors included an increase in notes and accounts payable-trade, income
taxes paid, income before income taxes and minority interests, depreciation and amortization, and an increasein accounts payable-other.
Net cash used in investing activities stood at ¥725 million (outflow of ¥923 million for the first half of theprevious fiscal year). Principal factors included the purchase of intangible assets (mainly software).
Net cash provided by financing activities came to ¥4,118 million (outflow of ¥291 million for the first halfof the previous fiscal year). Principal factors included the payment of cash dividends and proceeds from theissuance of common stock.
Net cash
Net cash
Net cashprovided by (used in) provided by (used in) provided by (used in)operating activities
investing activities
financing activities

Cash and cash
equivalents
at end of year

Millions of yen

Millions of yen

Millions of yen

Millions of yen

1,919

-725

4,118

10,116

2,027

-923

-291

4,235

3,600

-1,867

-375

4,782

First half of the fiscal year
ending September 30, 2015
First half of the fiscal year
ended September 30, 2014
For the fiscal year ended
September 30, 20143

（3） Explanation of future forecast information including consolidated forecast
From the third 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, forpromoting 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.
To increase the ARPU, in September 2014, the Company commenced services integrating music,
electronic books and comics for a fixed rate of ¥400 per month excluding tax. In March 2015, the Company
added videos to the services in cooperation with Video Market Corporation, an equity method affiliate, toexpand the number of paying subscribers on the services. The Company is making preparations tocommence a service integrating weather information and map navigation this summer.
In healthcare-related information services, the Company will increase the number of paying subscribers
on a high-value added service of Luna-Luna (a fixed rate of ¥300 per month excluding tax) and a Q&A
website on health where healthcare-related professionals respond to questions 24 hours a day (a fixed rateof ¥300 per month excluding tax). Meanwhile, the Company will work to increase the number of users
further through the enhancement of the Luna-Luna Lite services, which are used by approximately 7.2
million customers.
As sales of the unmetered plan with flat-rate monthly charges for cellphone carries continue to increase,
the 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 a notice of revisions to forecasts for consolidated business results and dividends 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)z

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 amountof impact associated with the change of the calculation method of retirement benefit obligations andservice costs is added to or subtracted from retained earnings at the beginning of the first half under review
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 half 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 half under review is minor.

5

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

As of March 31, 2015

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

4,782,677
6,294,778

10,116,585
6,952,673

Deferred tax assets
Other

378,136
836,262

293,655
989,289

Allowance for doubtful accounts-108,691-88,349

12,183,163

18,263,854

143,032

137,183

2,150,300
2,355

2,003,212
1,345

25,03424,471

Total intangible assets

2,177,690

2,029,029

Investments and other assets
Investment securities

813,082

940,264

Lease and guarantee deposits
Deferred tax assets

489,586
883,432

489,865
793,697

Other
Allowance for doubtful accounts

99,694-21,317

100,417-21,317

Total investment and other assets

2,264,478

2,302,928

Total current assets
Noncurrent assets
Property, plant and equipment
Intangible assets
Software
Goodwill
Other

Total noncurrent assets
Total assets

6

4,585,200

4,469,141

16,768,363

22,732,996

(Thousands of yen)
As of September 30, 2014

As of March 31, 2015

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

1,041,374
3,210,657

Income taxes payable
Allowance for coin usage

674,912277,447

712,389234,690

Other

1,480,847

1,047,760

Total current liabilities

5,727,424

6,246,871

Long-term loans payable
Net defined benefit liability

500,000
768,368

500,000
768,402

Negative goodwill
Other49,659141

45,100141

1,318,168

1,313,643

7,045,593

7,560,515

Shareholders' equity
Capital stock

2,596,342

4,846,262

Capital surplus
Retained earning

3,111,863
4,305,998

5,361,782
5,132,141

Treasury stock-695,491-695,491

Total shareholders' equity

9,318,712

14,644,695

74,198

121,585-31,735-69,979-8,442-66,711

Noncurrent liabilities

Total noncurrent liabilities
Total liabilities
Net assets

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-27,516

46,431

206,905

177,101

Minority interests

224,667

304,251

Total net assets

9,722,770

15,172,480

Total liabilities and assets

16,768,363

22,732,996

7

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

First half of the fiscal year
ending September 30, 2015

Net sales
Cost of sales

15,279,641
2,476,132

16,620,130
2,666,199

Gross profits

12,803,508

13,953,930

Selling, general and administrative expenses

11,498,618

11,845,760

Operating income

1,304,889

2,108,170

156
681

130
2,196

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

4,558
4,104

4,558
4,094

Compensation income
Other

7,416
7,347

11,925
15,587

Total non-operating income

24,26438,493

5,963

2,695

7,243

55,473－
5,636

29,079Non-operating income
Interest income
Dividends income

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

24,815

18,843112,063

1,310,311

2,034,600

Loss on retirement of noncurrent assets
Loss on retirement of noncurrent assets－
19,196

4,328
55,470Loss on valuation of investment securities
Settlement package

37,376－－
14,907

Total extraordinary loss

56,57274,705

1,253,738

1,959,894

554,496656,212

Income taxes-deferred-90,197

126,662

Total income taxes

464,299782,874

Income before minority interests

789,438

1,177,019

Minority interests in income (loss)-1,26088,184

Net income

790,699

1,088,834

Ordinary income
Extraordinary income
Extraordinary loss

Income before income taxes and minority interests
Income taxes-current

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

First half of the fiscal year
ending September 30, 2015

789,438

1,177,019

16,64347,386

12,075

13,889

－

3,268

563

2,172

29,282

66,716Comprehensive income

818,7211,243,736(Comprehensive income attributable to)Comprehensive income attributable toowners of the parent
Comprehensive income attributable tominority interests

818,729

1,162,783-8

80,9539

（3） Quarterly consolidated statements of cash flows
For the first half of the fiscal year ended September 30, 2014 and fiscal year ending September 30, 2015
(Thousands of yen)First half of the fiscal year
ended September 30, 2014
Cash flows from operating activities
Income (loss) before minority interest

First half of the fiscal year
ending September 30, 2015

1,253,738

1,959,894

Depreciation and amortization
Increase (decrease) in allowance for coin usage
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in net defined benefit liabil
ityInterest and dividends income
Interest expenses

905,971-67,346

698,411-42,756

76,345－－61,753-837
5,963-2,326

Share issuance cost
Settlement package－－
19,196

24,815
14,907

－

4,328

2,695

Loss on retirement of noncurrent assets
Loss (gain) on sales of property, plant andequipment
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts
receivable-trade
Increase (decrease) in notes and accounts
payable-trade
Increase (decrease) in accounts payable-other
Other, net

37,376－-165,050-648,653-5,07964,870834,169

877,826-259,452-585,268

Subtotal

2,634,994

2,485,967

837-4,471

2,326-1,218Interest and dividends income received
Interest expenses paid

55,470

Income taxes (paid) refund-603,401-567,735

Net cash provided by (used in) operating activities

2,027,960

1,919,340-825,237-46,224-592,603-56,159

800
1,950

－
－

－

-60,867

Other, net-33,863-20,737-15,971

Net cash provided by (used in) investing activities-923,312-725,601

99,440－－4,431,513

Cash flows from investing activities
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of stocks of subsidiaries and affiliates
Proceeds from sales of stocks of subsidiaries and affiliates
Payments for investments in capital－

Cash flows from financing activities
Proceeds from long-term loans payable
Redemption of bonds-81,520

Proceeds from issuance of common stock
Purchase of treasury stock

4,902
-222

-313,842－－-302,161-11,000

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-291,241

4,118,351

5,571

21,817

818,977

5,333,908

Cash and cash equivalents at beginning of period

3,416,219

4,782,677

Cash and cash equivalents at end of period

4,235,197

10,116,585

Cash dividends paid
Other, net

10（4） 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 half under review, the Company issued new shares in association with the exercise ofsubscription rights to shares. Capital stock and legal capital surplus consequently each rose 83,469,000yen.
As a result, in the first half under review, capital stock and legal capital surplus each increased
2,249,919,000 yen, and at the end of the first half, capital stock and capital surplus came to 4,846,262,000
yen and 5,361,782,000 yen, respectively.

11