UNOFFICIAL TRANSLATION
The formal official document is in Japanese

Summary of Consolidated Financial Results for the First Quarter of
Fiscal Year Ending September 30, 2022 (Japanese Accounting Standards)
February 9, 2022
Listed Company Name: MTI Ltd.
Listing Exchanges: Tokyo Stock Exchange
Securities Code:9438
URL: https://www.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): February 14, 2022
Scheduled date of dividend payment: –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 three months ended December 31, 2021
(October 1, 2021– December 31, 2021)(Percentages represent year-on-year changes)(1) Consolidated operating results (cumulative total)
Net sales

Operating income

Millions of yen

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

6,551

3.9

% Millions of yen

395(20.2)

%

14.7

6,304
3.0
553
(5.5)
495
22.4
220
Three months ended December 31, 2021: 175 millions of yen 20.9%
Three months ended December 31, 2020: 145 millions of yen (38.4)%(4.7)

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

(18.5)% Millions of yen

252

Net income
per share

451

Profit attributable toowners of parent

Ordinary income

Net income
per share/diluted
Yen

Yen

4.62

4.62

4.04

4.01

(2) Consolidated financial position
Total assets

Net assets

Millions of yen

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

Equity ratio

Millions of yen%

29,612
19,37331,90821,243As of December 31, 2021: 15,485 millions of yen
As of September 30, 2021: 17,426 millions of yen

52.3
54.6

2. Dividends
End of firstquarter
Fiscal year ended
September 30, 2021
Fiscal year ending
September 30, 2022
Fiscal year ending
September 30, 2022 (forecast)

Dividend per share
End of third
quarter

End of second
quarterYear end

Annual

Yen

Yen

Yen

Yen

Yen

–

8.00

–

8.00

16.00

8.00

–

8.00

16.00

–

(Note) Revision of dividend forecast for during this period : No

3. Forecast for consolidated business results for the fiscal year ending September 30, 2022
(October 1, 2021 – September 30, 2022)(Percentages represent year-on-year changes.)
Net sales
Millions of yen

For the first half
Full year

12,750〜13,250
25,500〜26,500

Operating income％ Millions of yen

(2.3)
〜1.6
(0.9)
〜2.9

％ Millions of yen

900 (27.0)〜1,100 〜(10.7)
1,800
(6.7)
〜2,200 〜14.0

Profit attributable toowners of parent

Ordinary income％ Millions of yen

700 (16.7)〜900 〜7.1
1,400
2.1〜1,800 〜31.3(Note) Revisions to forecasts for consolidated business results published most recently: No

300
〜500
600
〜1,000Net income
per share

％

Yen

–

5.48
〜9.13
10.96
〜18.26–

* 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:

ApplicableNot applicableNot applicableNot applicable(4) Number of outstanding shares (common shares)(i) Number of shares outstanding at the end of period (including treasury shares):12/2021: 61,248,200 shares
09/2021: 61,248,200 shares(ii) Number of treasury shares at the end of period
12/2021: 6,497,173 shares
09/2021: 6,496,273 shares(iii) Average number of shares during the period (quarterly consolidated cumulative period)
Three months ended 12/2021: 54,751,252 shares Three months ended 12/2020: 54,645,883 shares* This Summary of Consolidated Financial Results for the First Quarter is not included in the scope of quarterly review
by certified public accountants or audit corporations.
* 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 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 Thursday,
February 10, 2022, to prevent the spread of infections by the COVID-19 coronavirus the Company will forgo holding at the venue
event and will 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 quarterly 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. Quarterly consolidated financial statements and important notes ............................................................................ 5(1) Quarterly consolidated balance sheet .............................................................................................................. 5(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive
income ............................................................................................................................................................. 7

11.Qualitative information on financial results for the current quarterly settlement(1) Explanation on operating results
Overview of the first quarter of fiscal year ending September 30, 2022
(Period from October 1, 2021 to December 31, 2021)
Looking at the Group's first quarter 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” securityrelated app, which was in high demand, although the acquisition of new subscribers through mobile phone
stores remained 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, suchas the maternal health record book app, to local governments.
As a result, net sales stood at ¥6,551 million yen (up 3.9% year on year).
Gross profit stood at ¥4,656 million (down 1.2% year on year), reflecting a rise in the cost of sales mainly
associated with increased sales in the Other business, where the rate of cost of sales was high, as well as theoccurrence of a loss-making project in this business.
Operating income and ordinary income came to ¥451 million (down 18.5% year on year) and ¥395 million(down 20.2% 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
in charge of development made to strengthen the Group's product development capability, which offset a
reduction in rents, etc., linked to a shift to the teleworking system.
Profit attributable to owners of parent came to ¥252 million (up 14.7% year on year) due to decreases in an
extraordinary loss and corporate taxes, which more than offset a decline in ordinary income.
Consolidated business results(Period from October 1, 2021 to December 31, 2021)
First quarter
First quarterof the fiscal year ending of the fiscal year ended
September 30, 2022
September 30, 2021

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen%

Net sales

6,551

6,304

+246

+3.9

Cost of sales

1,895

1,593

+301

+19.0

Gross profit

4,656

4,711

(55)

(1.2)

SG&A

4,204

4,157

+47

+1.1

Operating income

451

553

(102)

(18.5)

Ordinary income
Profit attributable to ownersof parent

395

495

(99)

(20.2)

252

220

+32

+14.7

Breakdown of SG&A
(Period from October 1, 2021 to December 31, 2021)
First quarter
First quarterof the fiscal year ending of the fiscal year ended
September 30, 2022
September 30, 2021

ChangeAmountPercentage

Millions of yen

Millions of yen

Millions of yen

%

4,204

4,157

+47

+1.1

Advertising expenses

360

337

+23

+6.9

Personnel expenses

1,912

1,743

+169

+9.7

Commission fee

753

789

(36)

(4.6)

Subcontract expenses

440

441

(1)

(0.4)

Depreciation

303

272

+30

+11.3

Other

435

573

(137)

(24.0)

Total

2

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,
as well as the B2B original comic distribution business that offers original comic content to comic
distributors.
This segment served 3.33 million paying subscribers. The figure was down by 190,000 from the end of
September 2021. Following mobile carriers' termination of the feature phone service, the number of paying
subscribers decreased significantly in the first quarter under review. Excluding this factor, however, a net
decline in the number of paying subscribers was becoming moderate owing to the solid number of new
subscribers to the “AdGuard” security app acquired through mobile phone stores.
Net sales stood at ¥4,639 million (down 4.3% 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 ¥1,534 million (down 10.2% year on year) mainly due to a year-on-year decreasein 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 620,000 paying subscribers. The figure was 20,000 smaller than at the end of
September 2021. On the other hand, the number of pharmacies that offer the cloud drug record service
came to 864 at the end of December 2021 (up 99 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 ¥908 million (up 1.6% 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 ¥336 million (compared to a loss of ¥351 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,
and the Company's DX support business for large companies and solution business.
In this segment, net sales stood at ¥1,316 million (up 60.6% year on year), reflecting a rise in sales in
the AI business and digital transformation support business for major companies. The operating loss cameto ¥157 million, compared to an operating loss of ¥101 million recorded for the same period of the previous
year, mainly reflecting an increase in the cost of sales attributable to the occurrence of a loss-making project
and a rise in personnel expenses due to an increase in the number of personnel in charge of development.
(2) Explanation on financial position① Assets, liabilities and net assets
At the end of the first quarter under review, total assets decreased ¥2,296 million from September 30, 2021,
to ¥29,612 million.
Current assets decreased ¥2,781 million mainly due to a fall in cash and deposits. Non-current assets
rose ¥484 million due to an increase in software.
Current liabilities decreased ¥382 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 ¥43 million mainly due to a declined in long-termloans payable.
Net assets decreased ¥1,869 million due to the payment of dividends and the effects of the applicationof the Accounting Standard for Revenue Recognition, etc., despite the posting of ¥252million as profit
attributable to owners of parent.
(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
3and striving to bolster the original comic distribution business.
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 digital transformation platform strategy
to enable the healthcare business to make a contribution to profit in the medium term.
The Company continues to hold its consolidated earnings forecasts for the first half of the fiscal year ending
September 30, 2022 and for the entirety of the fiscal year as announced on November 9, 2021.
Earnings forecast for the six months of the fiscal year ending September 30, 2022
(Period from October 1, 2021 to March 30, 2022)
Consolidated(Millions of yen)

YoY(%)Net sales

12,750 ~ 13,250(2.3) ~ +1.6

Operating income

900 ~1 ,100

(27.0) ~ (10.7)

Ordinary income

700 ~ 900

(16.7) ~ +7.1

Profit attributable toowners of parent

300 ~ 500-

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

YoY(%)Net sales

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

Operating income

1,800 ~ 2,200(6.7) ~ +14.0

Ordinary income

1,400 ~ 1,800+2.1 ~ +31.3

Profit attributable toowners of parent

600 ~ 1,000

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

Current fiscal year
(As of December 31, 2021)

AssetsCurrent assets
Cash and deposits

15,540,084

12,722,093

Notes and accounts receivable-trade

4,501,674－－

4,545,524

Other

1,254,252

1,252,794

Allowance for doubtful accounts(33,173)(38,733)

21,262,838

18,481,679

203,001

212,681

Software

1,791,596

2,267,680

Goodwill

556,421673,534

1,333,800

1,228,500

30,00969,7483,711,827

4,239,463

4,511,728

4,076,787

318,761

313,959

1,803,442

2,195,684

Other

108,143

103,232

Allowance for doubtful accounts(10,904)(10,904)

Total investment and other assets

6,731,170

6,678,760

10,646,000

11,130,905

31,908,839

29,612,584

Notes and accounts receivable, and contract assets

Total current assets
Non-current assets
Property, plant and equipment
Intangible assets

Customer-related assets
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets

Total non-current assets
Total assets

5

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

Current fiscal year
(As of December 31, 2021)

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

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

1,093,825
452,608
1,405,965
24,3062,214,406
198,949

Provision for point usage
Other

－
－
115,396
1,554,849

Total current liabilities

6,655,884

6,272,997

Non-current liabilities
Long-term borrowings
Retirement benefit liability

2,429,790
1,572,854

2,341,512
1,617,333

6,935

6,838

Other
Total non-current liabilities－
882,935

4,009,579

3,965,684

Total liabilities

10,665,464

10,238,681

Net assets
Shareholders' equity
Share capital

5,197,909

5,197,909

6,660,831
8,665,046

Capital surplus
Retained earnings
Treasury shares(3,281,839)

6,557,793
6,847,591(3,281,839)

Total shareholders' equity

17,241,947

15,321,454

165,205
5,908

137,406
13,717

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans

13,87913,162

Total accumulated other comprehensive income

184,993

164,287

161,887
3,654,545
21,243,375

165,035
3,723,125
19,373,903

31,908,839

29,612,584

Subscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

6

（2） Quarterly consolidated statements of income and quarterly consolidated statementof comprehensive income
Quarterly consolidated statement of income
For the first quarter(Unit: thousands of yen)
For the first quarterof the previous fiscal year
(from October 1, 2020
to December 31, 2020)

For the first quarterof the current fiscal year
(from October 1, 2021
to December 31, 2021)

Net sales
Cost of sales

6,304,514
1,593,032

6,551,430
1,895,025

Gross profit

4,711,482

4,656,405

Selling, general and administrative expenses

4,157,761

4,204,930

Operating income

553,720

6,551,430

Non-operating income
Interest income
Subsidy income
Other

16
20,07010,522

19
1,434
8,105

30,609

9,559

1,737

1,421

83,336

45,118

1,612
2,381

17,003
2,055

Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodConsumption tax difference
Other
Total non-operating expenses

89,06765,598495,262

395,435

2,934

－

2,934

－

5,586

1,348

Impairment losses
Loss on sale of investment securities
Loss on valuation of investment securities
Loss on step acquisitions

76,949

－
3,240

－

－
4,700

Total extraordinary losses

82,547

9,289

Income before income taxes

415,649

386,146

Income taxes-current
Income taxes-deferred

203,187
95,221(21,396)
211,446

Total income taxes

298,408

190,049

Ordinary income
Extraordinary income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets－
11

Profit117,240

196,096

Loss attributable to non-controlling interests(103,289)(56,742)

Profit attributable to owners of parent

220,530

252,838

7

Quarterly consolidated statement of comprehensive income
For the first quarter(Unit: thousands of yen)
For the first quarterof the previous fiscal year
(from October 1, 2020
to December 31, 2020)

For the first quarterof the current fiscal year
(from October 1, 2021
to December 31, 2021)

ProfitOther 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

117,240

196,096

17,444(4,538)(1,499)(43,018)
7,465
(717)

16,905

16,17328,362(20,097)

Comprehensive income

145,603

175,998(Comprehensive income attributable to)Comprehensive income attributable to ownersof parent
Comprehensive income attributable to non-controllinginterests

248,892

232,131(103,289)(56,133)8