UNOFFICIAL TRANSLATION
The formal official document is in Japanese
Summary of Consolidated Financial Results for the First Half of
Fiscal Year ending September 30, 2016 (Japanese Accounting Standards)
April 28, 2016
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 12, 2016
Scheduled date of dividend payment: June 13, 2016
Supplementary documents for quarterly results: Yes
Quarterly results briefing: Yes (for securities analysts and institutional investors)(Figures less than one millions of yen are omitted)

1. Consolidated business results for the six months ended March 31, 2016
(October 1, 2015 – March 31, 2016)(1) Consolidated operating results (cumulative total)
Net sales

Operating income

Millions of yen

First half of fiscal year ending
September 30, 2016
First half of fiscal year ended
September 30, 2015
(Note) Comprehensive income:(Percentages represent year-on-year changes)
Profit attributable toOrdinary income
owners of parent% Millions of yen% Millions of yen% Millions of yen%

16,994

2.3

2,489

18.1

2,434

19.7

1,425

30.9

16,620

8.8

2,108

61.6

2,034

55.3

1,088

37.7

Six months ended March 31, 2016: 1,354 millions of yen (8.9%)
Six months ended March 31, 2015: 1,243 millions of yen (51.9%)
Net income
Net income
per shareper share/diluted

First half of fiscal year ending
September 30, 2016
First half of fiscal year ended
September 30, 2015

Yen

Yen

25.26

24.97

21.46

21.19

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, 2016
As of September 30, 2015
(Reference) Shareholders’ equity:

Equity ratio

Millions of yen%

23,045
15,62324,738
16,591
As of March 31, 2016: 15,113 millions of yen
As of September 30, 2015: 16,034 millions of yen

65.6
64.8

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–
12.00
September 30, 2015
Fiscal year ending–
8.00
September 30, 2016
Fiscal year ending
September 30, 2016 (forecast)(Note) Revisions to dividend forecasts published most recently: No

–

8.00

20.00

–

8.00

16.00

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 ended September 30, 2015 is calculated based on the number of shares before the stock split, but the year-end dividend per share is calculated
based on the number of shares after the stock split.

3. Forecast for consolidated business results for the fiscal year ending September 30, 2016
(October 1, 2015 – September 30, 2016)
Net sales
Millions of yen

Operating income% Millions of yen(Percentages represent year-on-year changes.)
Profit attributable to
Net income
Ordinary income
owners of parent
per share% Millions of yen% Millions of yen

Full year
35,000
4.6
4,700
10.7
4,660
12.4
(Note) Revisions to forecasts for consolidated business results published most recently: No

2,700

%

Yen

3.6

49.68

* 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):3/16: 60,426,800 shares
9/15: 60,226,800 shares(ii) Number of treasury shares at the end of period
3/16: 6,075,228 shares
9/15: 3,260,928 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Six months ended 3/16: 56,424,007 shares
Six months ended 3/15: 50,729,001 shares
The Company conducted a 2-for-1 common stock split that became effective on April 1, 2015. The average number of shares during the period is
calculated on the assumption that this share split was carried out at the beginning of the previous fiscal year 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 page3-4 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 Monday,
May 2, 2016. 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.

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, 2016 (From October 1, 2015 to March 31, 2016)
During the first half under review, smartphone unit sales grew temporarily due to a cash refund campaign
launched by cellphone carriers with the abolition of their practice of offering cellphones virtually free of charge.
However, smartphone unit sales remained low in the period from February 2016 when the biggest sales battle
takes place annually.
In this environment, the Company focused on efforts to acquire paying subscribers on smartphones to its
content offering high average revenue per user (ARPU) at cellphone shops across Japan and other businesslocations. The number of paying subscribers on smartphones came to 6.08 million at the end of March 2016 (up0.08 million from the end of September 2015), reflecting the low pace of their acquisition in the first half underreview. As a result, the total number of paying subscribers decreased 0.13 million, to 7.81 million at the end of
March 2016.
Net sales increased to ¥16,994 million (up 2.3% year on year), attributable to a sustained uptrend for ARPU
supported by the steady acquisition of paying subscribers on smartphones to the Company’s main services
offering high ARPU. Gross profit also rose to ¥14,359 million (up 2.9% year on year).
Operating income, ordinary income and profit attributable to owners of parent amounted to ¥2,489 million(up 18.1% year on year), ¥2,434 million (up 19.7% year on year) and ¥1,425 million (up 30.9% year on year),respectively, reflecting the gross profit rise and selling, general and administrative expenses (SG&A) kept at theprevious year’s level with advertising expense controls.
Consolidated business results(From October 1, 2015 to March 31, 2016)
First half ofthe fiscal year ending
September 30, 2016

First half ofthe fiscal year ended
September 30, 2015

Millions of yen

Millions of yen

16,994
2,635
14,35911,8702,489
2,434

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

1,425

1,088

First half ofthe fiscal year ending
September 30, 2016

First half ofthe fiscal year ended
September 30, 2015

Millions of yen

Millions of yen

Millions of yen

11,87011,845

+24

4,779
2,709
1,909
758
601
1,110

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

+77
(46)
+74
+75
(92)
(63)

Net sales
Cost of sales
Gross profit
SG&A
Operating income
Ordinary income
Profit attributable to ownersof parent

ChangePercentage
AmountchangeMillions of yen
%
+374
+2.3
(31)
(1.2)
+405
+2.9
+24
+0.2
+381
+18.1
+400
+19.7
+336

+30.9

Breakdown of SG&A
(From October 1, 2015 to March 31, 2016)

Total
Advertising expenses
Personnel expenses
Commission fee
Subcontract expenses
Depreciation
Other

2

ChangeAmountPercentagechange
%
+0.2
+1.6
(1.7)
+4.0
+11.1
(13.4)(5.4)

（2） Explanation on financial position
1) Assets, liabilities and net assets
At the end of the first half under review, total assets fell ¥1,692 million from the end of September 2015, to¥23,045 million.
Current assets decreased ¥1,823 million, mainly due to falls in cash and deposits and accounts receivableother. Non-current assets increased ¥131 million, chiefly reflecting rises in investment securities and deferred
tax assets that offset a fall in software.
Current liabilities shrank ¥785 million as a result of factors such as falls in accounts payable-other and income
taxes payable. Non-current liabilities grew ¥60 million, primarily owing to an increase in net defined benefit
liability.
Net assets dropped ¥967 million yen, mainly attributable to the acquisition of treasury stock and cash
dividends paid, in spite of ¥1,425 million posted as profit attributable to owners of parent.
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

As of March 31, 2016

23,045

15,623

65.6

As of September 30, 2015

24,738

16,591

64.8

2) Consolidated cash flows
At the end of the first half under review, cash and cash equivalents were ¥10,650 million, down ¥957 million
from the end of September 2015. The cash flows by activities and principal factors in the first half under review
are as follows:
Net cash provided by operating activities was ¥1,473 million (inflow of ¥1,919 million for the first half of theprevious fiscal year). Principal factors included income taxes paid, income before income taxes, and depreciation
and amortization.
Net cash used in investing activities stood at ¥47 million (outflow of ¥725 million for the first half of theprevious fiscal year). Major factors included proceeds from the sale of investment securities and expenditure forthe purchase of intangible assets (consisting mainly of software).
Net cash used in financing activities came to ¥2,364 million (inflow of ¥4,118 million for the first half of theprevious fiscal year). Main factors included the acquisition of treasury stock and the payment of cash dividends.
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 period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

1,473

(47)

(2,364)

10,650

1,919

(725)

4,118

10,116

4,587(1,707)

3,921

11,608First half of the fiscal year
ending September 30, 2016
First half of the fiscal year
ended September 30, 2015
For the fiscal year ended
September 30, 20153

（3） Explanation of future forecast information including consolidated forecast
Smartphone unit sales are anticipated to remain low in the third quarter and the immediately subsequent
periods under the adverse effects of the abolition of the widespread practice of offering cellphones virtually freeof charge. In this situation, the Company aims to achieve its targets for consolidated operating results bymaintaining its focus on expanding the number of paying subscribers on smartphones and working to increase
average revenue per user (ARPU).
The Company will work to promote the sales of its content offering high ARPU and to increase the numberof paying subscribers on smartphones, making the most of its strong sales channels consisting of cellphone shops
throughout Japan that promote the sales of its own content and the content offered by other companies tocustomers, in addition to expanding its lineup of high value-added services capable of increasing the level ofcustomer satisfaction.
In the healthcare-related service business, which the Company is approaching with a medium- to long-term
perspective, the Company will pursue a number of strategies to increase sales. This business has tremendous
potential for future growth and is expected to shift to a stock-type business with long-term support for stages in
the lives of customers.
Specifically, the Company will aggressively promote the sales of CARADA package services to corporate
customers through companies operating cellphone shops nationwide (dealers). At the same time, the Company
will increase the number of contracts for training management services provided by a group company with fitness
clubs, incorporated schools and the like.
The Company is keeping its forecasts for consolidated business results for the fiscal year ending September
30, 2016 unchanged from the figures it announced on November 4, 2015.
Forecasts for consolidated business results for the fiscal year ending September 30, 2016
(From October 1, 2015 to September 30, 2016)
Consolidated
Net sales

35,000 millions of yen(Up 4.6% year on year)

Operating income

4,700 millions of yen(Up 10.7% year on year)

Ordinary income

4,660 millions of yen(Up 12.4% year on year)

Profit attributable toowners of parent

2,700 millions of yen(Up 3.6% 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
Changes in accounting policies(Application of the Accounting Standard for Business Combinations, etc.)
From the first quarter of the fiscal year under review, the Company applied the “Accounting Standard forBusiness Combinations” (ASBJ statement No. 21, September 13, 2013; hereinafter the “Accounting Standard
for Business Combinations”), the “Accounting Standard for Consolidated Financial Statements” (ASBJ
statement No. 22, September 13, 2013; hereinafter the “Accounting Standard for Consolidated Financial
Statements”) and the “Accounting Standard for Business Divestures” (ASBJ statement No. 7, September 13,
2013; hereinafter the “Accounting Standard for Business Divestures”). The purpose of applying these standards
was to change the method for recording the difference from changes in the Company’s equity in its subsidiaries
that remain controlled by the Company as capital surplus and the expenses related to acquisition as an expensein the consolidated fiscal year in which the expenses are incurred. For business combinations implemented after
the beginning of the first quarter of the fiscal year under review, the method will be changed to one that reflects
the revision of the distributed amounts of acquisition costs by determining provisional accounting treatment in
the quarterly consolidated financial statements for the quarterly consolidated accounting period to which the dateof the relevant business combination belongs. In addition, the Company has changed the presentation of net
income and other items and the presentation of minority interests to non-controlling interests. To reflect thesechanges, the Company rearranged the interim consolidated financial statements for the first half of the previous
fiscal year and the consolidated financial statements for the previous fiscal year.
In the Consolidated Statement of Cash Flows for the first half under review, the Company changed its
recording methods to state cash flows associated with the acquisition or sale of shares in subsidiaries that do notaccompany changes in the scope of consolidation in the category of cash flows from financing activities andrecord cash flows that arose in connection with expenses for the acquisition of shares in subsidiaries that
accompany changes in the scope of consolidation or with the acquisition or sale of shares in subsidiaries that do
not accompany changes in the scope of consolidation in the category of cash flows from operating activities.
The Accounting Standard for Business Combinations and other standards are applied in accordance with thetransitional treatment prescribed in Article 58-2 (4) of the Accounting Standard for Business Combinations,
Article 44-5 (4) of the Accounting Standard for Consolidated Financial Statements, and Article 57-4 (4) of the
Accounting Standard for Business Divestitures. These standards have been applied since the beginning of thefirst quarter of the fiscal year under review. Their application will continue going forward.
The changes explained above have no effect on the consolidated financial statements for the first half underreview.

5

3. Quarterly consolidated financial statements（1） Quarterly consolidated balance sheets
Fiscal year ended September 30, 2015 and the first half of fiscal year ending September 30, 2016
(Thousands of yen)
As of September 30, 2015

As of March 31, 2016

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade

11,608,562
6,885,765

10,650,872
6,808,379

Deferred tax assets
Other

358,149
1,430,037

293,736
708,584

Allowance for doubtful accounts(71,095)(73,946)

20,211,420

18,387,624

146,488

145,3072,254,746
336

2,179,439

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

22,168－25,188

Total intangible assets

2,277,251

2,204,628

Investments and other assets
Investment securities

796,241

908,364

Lease and guarantee deposits
Deferred tax assets

501,636
792,649

494,460
893,889

Other
Allowance for doubtful accounts

30,145(17,589)

29,024(17,590)

Total investment and other assets

2,103,083

2,308,148

Other

Total noncurrent assets
Total assets

6

4,526,824

4,658,084

24,738,244

23,045,708

(Thousands of yen)
As of September 30, 2015

As of March 31, 2016

Liabilities
Current liabilities
Account payable-trade
Current portion of long-term loans payable

1,179,484
518,679

1,118,516
516,571

Accounts payable-other
Income taxes payable

2,571,997
1,354,619

2,367,768
1,206,888

Allowance for coin usage
Other

234,836
1,334,097

221,169
977,355

Total current liabilities

7,193,715

6,408,270

Noncurrent liabilities
Long-term loans payable
Net defined benefit liability
Negative goodwill
Other
Total noncurrent liabilities

79,92572,703

832,740
40,541

902,647
35,982141

2,808

953,349

1,014,142

8,147,064

7,422,412

Capital stock
Capital surplus

4,947,984
5,469,051

4,987,212
5,508,279

Retained earning
Treasury stock

6,300,484(695,491)

7,270,012(2,650,636)

Total shareholders' equity

16,022,029

15,114,867

83,691

81,684(7,837)(62,969)(24,038)(58,863)

12,884(1,217)

127,100
429,165

133,278
376,367

Total net assets

16,591,180

15,623,296

Total liabilities and assets

24,738,244

23,045,708

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
Non-controlling interests7（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, 2015 and fiscal year ending September 30, 2016
(Thousands of yen)First half of the fiscal year
ended September 30, 2015

First half of the fiscal year
ending September 30, 2016

Net sales
Cost of sales

16,620,130
2,666,199

16,994,423
2,635,016

Gross profit

13,953,930

14,359,407

Selling, general and administrative expenses

11,845,760

11,870,075

Operating income

2,108,170

2,489,332

Interest income
Dividend income

130
2,196

158
2,267

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

4,558
4,094

4,558

Compensation income
Other

11,925
15,587－
5,544

Total non-operating income

38,493

12,529Non-operating income－

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

2,695

2,018

55,47344,98324,815

Other

29,079－20,157

Total non-operating expenses

112,063

67,1592,034,600

2,434,702

Loss on sales of non-current assets
Loss on retirement of non-current assets

4,328
55,470－9,108Loss on valuation of investment securities
Settlement package－
14,90750,000Total extraordinary loss

74,705

59,108

Ordinary income
Extraordinary income
Extraordinary loss

Income before income taxes and minority interests－

1,959,894

2,375,593

Income taxes-current

656,2121,036,639

Income taxes-deferred

126,662△37,539

Total income taxes

782,874

999,100

1,177,019

1,376,493

88,184△48,761

1,088,834

1,425,254

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

8

Quarterly consolidated statements of comprehensive income
For the first half of the fiscal year ended September 30, 2015 and fiscal year ending September 30, 2016
(Thousands of yen)First half of the fiscal year
ended September 30, 2015

First half of the fiscal year
ending September 30, 2016

Net income
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

1,177,019

1,376,493

47,386(2,840)13,889(21,461)

3,268

4,106

2,172

(1,321)

66,716(21,517)Comprehensive income

1,243,736

1,354,975(Comprehensive income attributable to)Comprehensive income attributable toowners of the parent
Comprehensive income attributable to noncontrolling interests

1,162,783

1,411,153

80,953(56,177)9

（3） Quarterly consolidated statements of cash flows
For the first half of the fiscal year ended September 30, 2015 and fiscal year ending September 30, 2016
(Thousands of yen)First half of the fiscal year
ended September 30, 2015
Cash flows from operating activities
Income (loss) before minority interest

First half of the fiscal year
ending September 30, 2016

1,959,894

2,375,593

Depreciation and amortization
Increase (decrease) in allowance for coin usage
Increase (decrease) in net defined benefit liabil
ityInterest and dividends income

698,411(42,756)

651,463(13,666)

61,75369,907(2,326)(2,425)Interest expenses
Share issuance cost

2,695
24,815

2,018

Settlement package
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

14,90755,470

－
9,108

4,328

－

－

50,000(648,653)

72,33664,870(60,968)－

877,826(199,289)

Other, net(585,268)(308,141)

Subtotal

2,485,967

2,645,936

2,326

2,425

Interest expenses paid
Income taxes (paid) refund(1,218)(567,735)(2,018)(1,173,120)

Net cash provided by (used in) operating activities

1,919,340

1,473,223

Purchase of property, plant and equipment
Purchase of intangible assets(11,231)(592,603)(20,170)(746,911)

Proceeds from sales of intangible assets
Purchase of investment securities－(56,159)

197,377(863)

Proceeds from sales of investment securities
Purchase of shares of subsidiaries and associates－(60,867)

734,287(213,500)

Interest and dividends income received

Cash flows from investing activities

Other, net(4,740)1,870(725,601)(47,910)

Repayments of long-term loans payable
Proceeds from issuance of common stock－
4,431,513(9,331)60,452

Purchase of treasury stock
Cash dividends paid－
(302,161)(1,959,881)(455,726)

Net cash provided by (used in) investing activities
Cash flows from financing activities

Other, net(11,000)－

4,118,351(2,364,486)

21,817(18,516)

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

5,333,908(957,690)

Cash and cash equivalents at beginning of period

4,782,677

11,608,562

Cash and cash equivalents at end of period

10,116,585

10,650,872

10

（4） Notes concerning quarterly consolidated financial statements(Notes concerning going concern assumption)
Not applicable.
(Notes on significant changes in shareholders’ equity)
The Company acquired treasury stock totaling 2,814,300 shares during the period from February 2, 2016
to March 31, 2016 based on resolutions made at meetings of the Board of Directors held on January 29
and February 18, 2016. As a result, treasury stock increased 1,955,144 thousand yen in the first half underreview and came to 2,650,636 thousand yen at the end of the first half.

11