Published: July 30, 2010
Monotype Imaging Announces Second Quarter 2010 Results
WOBURN, Mass. - (BUSINESS WIRE) - Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading global provider
of text imaging solutions, today announced financial results for the
second quarter ended June 30, 2010.
Second quarter 2010 highlights:
-
Second quarter revenue was $24.4 million, a 10 percent increase
year-over-year.
-
Operating income for the second quarter was $6.6 million, a four
percent increase over the prior year.
-
Non-GAAP net adjusted EBITDA for the second quarter was $10.4 million,
or 43 percent of revenue.
-
Cash flow from operations for the first half of the year was $21.9
million, a 27 percent increase over the prior year.
"Monotype Imaging delivered a solid second quarter, as we returned to
double digit year-over-year revenue growth," said Doug Shaw, president
and chief executive officer. "We expect this trend to continue into the
third quarter across all areas of our business."
Scott Landers, senior vice president and chief financial officer, said,
"We continue to execute against our short and long-term strategic
business plans, which are driving improved revenues, profits and cash
flows. We are in a strong financial position to capture the growth
opportunities we see ahead."
Second quarter 2010 operating results
Revenue for the second quarter of 2010 was $24.4 million, up 10 percent
compared to $22.3 million in the second quarter of 2009. OEM revenue for
the quarter was $18.4 million, increasing nine percent year-over-year.
Creative Professional revenue for the quarter was $6.0 million,
increasing 13 percent from the second quarter of 2009.
Net income for the second quarter of 2010 was $3.0 million, compared to
$3.1 million in the prior year period. Earnings per diluted share for
the second quarter of 2010 were $0.08, compared to $0.09 for the second
quarter of 2009.
In the second quarter of 2010, non-GAAP net adjusted EBITDA was $10.4
million, compared to $10.1 million in the second quarter of the prior
year.
A reconciliation of GAAP operating income to non-GAAP net adjusted
EBITDA for the three and six months ended June 30, 2010 and 2009 is
provided in the financial tables that accompany this release.
Cash, cash flow and debt balances
Monotype Imaging had cash and cash equivalents of $44.7 million as of
June 30, 2010, an increase from $38.2 million at the end of the prior
quarter and an increase from $34.6 million as of Dec. 31, 2009. During
the second quarter of 2010, Monotype Imaging generated $10.7 million in
cash flow from operations and $21.9 million year-to-date. The company's
outstanding debt was $81.2 million as of June 30, 2010, a decrease from
$83.8 million at the end of the prior quarter and a decrease from $91.4
million on Dec. 31, 2009.
Financial outlook
For the third quarter of 2010, Monotype Imaging expects revenue in the
range of $26.0 million to $27.5 million. The company anticipates third
quarter 2010 non-GAAP net adjusted EBITDA in the range of $11.5 million
to $12.5 million and earnings per share in the range of $0.10 to $0.12.
For full year 2010, Monotype Imaging expects revenue in the range of
$101 million to $105 million. This revenue guidance is inclusive of
approximately $1 million negative impact from foreign exchange rate
fluctuations. Excluding the negative impact from foreign exchange rate
fluctuations, full year revenue guidance assumptions remain unchanged.
The company continues to expect full year 2010 non-GAAP net adjusted
EBITDA in the range of $43 million to $46 million and earnings per share
in the range of $0.38 to $0.43.
Conference call details
Monotype Imaging will host a conference call on Friday, July 30, 2010 at
8:30 a.m. EDT to discuss the company's second quarter 2010 results and
business outlook. Individuals who are interested in listening to the
audio webcast should log on to the "Investor Relations" portion of the
"About Us" section of Monotype Imaging's Web site at www.monotypeimaging.com.
The live call can be accessed by dialing (866) 225-8754 (domestic) or
(480) 629-9722 (international) using passcode 4329410. The audio webcast
will also be archived on the company's Web site.
Non-GAAP financial measures
This press release contains non-GAAP financial measures under the rules
of the U.S. Securities and Exchange Commission. This non-GAAP
information supplements and is not intended to represent a measure of
performance in accordance with disclosures required by generally
accepted accounting principles. Non-GAAP financial measures are used
internally to manage the business, such as in establishing an annual
operating budget and in reporting to lenders. Non-GAAP financial
measures are used by Monotype Imaging management in its operating and
financial decision-making because management believes these measures
reflect ongoing business in a manner that allows meaningful
period-to-period comparisons. Accordingly, Monotype Imaging believes it
is useful for investors and others to review both GAAP and non-GAAP
measures in order to (a) understand and evaluate current operating
performance and future prospects in the same manner as management does
and (b) compare in a consistent manner the company's current financial
results with past financial results. The primary limitations associated
with the use of non-GAAP financial measures are that these measures may
not be directly comparable to the amounts reported by other companies
and they do not include all items of income and expense that affect
operations. Monotype Imaging management compensates for these
limitations by considering the company's financial results and outlook
as determined in accordance with GAAP and by providing a detailed
reconciliation of the non-GAAP financial measures to the most directly
comparable GAAP measures in the tables attached to this press release.
Forward-looking statements
This press release may contain forward-looking statements including
those related to future revenues and operating results, the growth of
the company's OEM business and Creative Professional business, the
execution of the company's growth strategy and anticipated business
momentum that involve risks and uncertainties that could cause the
company's actual results to differ materially. Factors that might cause
or contribute to such differences include, but are not limited to: risks
associated with changes in the economic climate, including decreased
demand for fonts or products that incorporate the company's text imaging
solutions; risks associated with changes in the financial markets,
including the availability of credit; risks associated with increased
competition, which may result in the company losing customers or force
it to reduce prices; risks associated with the development and market
acceptance of new products or product features; risks associated with
the company's ability to adapt its products to new markets and to
anticipate and quickly respond to evolving technologies and customer
requirements; risks associated with the company's adoption of new
business and licensing models; and risks associated with the ownership
and enforcement of the company's intellectual property. Additional
disclosure regarding these and other risks faced by the company is
available in the company's public filings with the Securities and
Exchange Commission, including the risk factors included in the
company's Annual Report on Form 10-K for the year ended Dec. 31, 2009
and subsequent filings. The forward-looking financial information set
forth in this press release reflects estimates based on information
available at this time. These amounts could differ from actual reported
amounts stated in the company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2010. While Monotype Imaging may elect to update
forward-looking statements at some point in the future, the company
specifically disclaims any obligation to do so, even if an estimate
changes.
About Monotype Imaging
Monotype Imaging combines technology with design to help the world
communicate. Based in Woburn, Mass. with offices in the U.S., Europe and
Asia, Monotype Imaging brings text imaging and graphical user interface
capabilities to consumer electronics devices such as laser printers,
copiers, mobile phones, digital televisions, set-top boxes, navigation
devices, digital cameras, e-book readers and consumer appliances. The
company also provides printer drivers and color imaging solutions to
printer manufacturers and OEMs (original equipment manufacturers).
Monotype Imaging technologies are combined with access to more than
13,000 typefaces from the Monotype, Linotype® and
ITC typeface libraries - home to some of the world's most
widely used designs, including the Times New Roman, Helvetica®
and ITC Franklin Gothic typefaces. Fonts are licensed to
creative, business and Web professionals through e-commerce portals,
direct and indirect sales and custom design services. Monotype Imaging
offers industry-standard font solutions that support all of the world's
major languages. Information about Monotype Imaging can be found at www.monotypeimaging.com.
Monotype is a trademark of Monotype Imaging Inc. registered in the U.S.
Patent and Trademark Office and may be registered in certain
jurisdictions. Times New Roman is a trademark of The Monotype Corp.
registered in the U.S. Patent and Trademark Office and may be registered
in certain jurisdictions. Linotype is a trademark of Linotype GmbH
registered in the U. S. Patent and Trademark Office and may be
registered in certain jurisdictions. Helvetica is a trademark of
Linotype Corp. registered in the U.S. Patent and Trademark Office and
may be registered in certain jurisdictions in the name of Linotype Corp.
or its licensee Linotype GmbH. ITC is a trademark of International
Typeface Corp. registered in the U.S. Patent and Trademark Office and
may be registered in certain jurisdictions. ITC Franklin Gothic is a
trademark of International Typeface Corp. and may be registered in
certain jurisdictions. All other trademarks are the property of their
respective owners. (c) 2010 Monotype Imaging Holdings Inc. All rights
reserved.
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|
|
|
|
|
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2010
|
|
|
December 31,
2009
|
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
44,672
|
|
|
|
$
|
34,616
|
|
|
Accounts receivable, net
|
|
|
4,260
|
|
|
|
|
5,145
|
|
|
Income tax refunds receivable
|
|
|
-
|
|
|
|
|
885
|
|
|
Deferred income taxes
|
|
|
1,022
|
|
|
|
|
878
|
|
|
Prepaid expenses and other current assets
|
|
|
2,727
|
|
|
|
|
1,666
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
52,681
|
|
|
|
|
43,190
|
|
|
Property and equipment, net
|
|
|
1,347
|
|
|
|
|
1,790
|
|
|
Goodwill
|
|
|
133,868
|
|
|
|
|
140,745
|
|
|
Intangible assets, net
|
|
|
78,985
|
|
|
|
|
85,088
|
|
|
Other assets
|
|
|
5,268
|
|
|
|
|
1,564
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
272,149
|
|
|
|
$
|
272,377
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
931
|
|
|
|
$
|
395
|
|
|
Accrued expenses and other current liabilities
|
|
|
8,520
|
|
|
|
|
8,635
|
|
|
Accrued income taxes
|
|
|
337
|
|
|
|
|
903
|
|
|
Deferred revenue
|
|
|
9,460
|
|
|
|
|
6,446
|
|
|
Current portion of long-term debt
|
|
|
12,065
|
|
|
|
|
16,293
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
31,313
|
|
|
|
|
32,672
|
|
|
Long-term debt, less current portion
|
|
|
69,128
|
|
|
|
|
75,060
|
|
|
Other long-term liabilities
|
|
|
2,643
|
|
|
|
|
784
|
|
|
Deferred income taxes
|
|
|
17,242
|
|
|
|
|
18,310
|
|
|
Reserve for income taxes, net of current portion
|
|
|
1,649
|
|
|
|
|
1,550
|
|
|
Accrued pension benefits
|
|
|
3,083
|
|
|
|
|
3,479
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
Common stock
|
|
|
35
|
|
|
|
|
35
|
|
|
Additional paid-in capital
|
|
|
152,039
|
|
|
|
|
148,273
|
|
|
Treasury stock, at cost
|
|
|
(86
|
)
|
|
|
|
(86
|
)
|
|
Accumulated deficit
|
|
|
(3,737
|
)
|
|
|
|
(10,043
|
)
|
|
Accumulated other comprehensive (loss) income
|
|
|
(1,160
|
)
|
|
|
|
2,343
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
147,091
|
|
|
|
|
140,522
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
272,149
|
|
|
|
$
|
272,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
2010
|
|
|
|
2009
|
|
|
Revenue
|
|
|
$
|
24,435
|
|
|
$
|
22,251
|
|
|
$
|
48,896
|
|
|
$
|
45,857
|
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
1,910
|
|
|
|
1,442
|
|
|
|
3,728
|
|
|
|
3,203
|
|
|
Cost of revenue-amortization of acquired technology
|
|
|
|
868
|
|
|
|
845
|
|
|
|
1,739
|
|
|
|
1,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenue
|
|
|
|
2,778
|
|
|
|
2,287
|
|
|
|
5,467
|
|
|
|
4,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
21,657
|
|
|
|
19,964
|
|
|
|
43,429
|
|
|
|
40,966
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing and selling
|
|
|
|
6,204
|
|
|
|
5,510
|
|
|
|
12,178
|
|
|
|
11,492
|
|
|
Research and development
|
|
|
|
3,570
|
|
|
|
3,463
|
|
|
|
7,591
|
|
|
|
6,834
|
|
|
General and administrative
|
|
|
|
4,072
|
|
|
|
3,458
|
|
|
|
8,096
|
|
|
|
7,232
|
|
|
Amortization of other intangible assets
|
|
|
|
1,187
|
|
|
|
1,182
|
|
|
|
2,388
|
|
|
|
2,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
15,033
|
|
|
|
13,613
|
|
|
|
30,253
|
|
|
|
27,915
|
|
|
Income from operations
|
|
|
|
6,624
|
|
|
|
6,351
|
|
|
|
13,176
|
|
|
|
13,051
|
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
1,108
|
|
|
|
1,056
|
|
|
|
2,303
|
|
|
|
2,234
|
|
|
Interest income
|
|
|
|
-
|
|
|
|
(53
|
)
|
|
|
(13
|
)
|
|
|
(60
|
)
|
|
Loss (gain) on foreign exchange
|
|
|
|
1,701
|
|
|
|
(727
|
)
|
|
|
2,689
|
|
|
|
(5
|
)
|
|
(Gain) loss on derivatives
|
|
|
|
(1,008
|
)
|
|
|
1,126
|
|
|
|
(1,765
|
)
|
|
|
704
|
|
|
Other (income) expense, net
|
|
|
|
(9
|
)
|
|
|
17
|
|
|
|
(9
|
)
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense
|
|
|
|
1,792
|
|
|
|
1,419
|
|
|
|
3,205
|
|
|
|
2,859
|
|
|
Income before provision for income taxes
|
|
|
|
4,832
|
|
|
|
4,932
|
|
|
|
9,971
|
|
|
|
10,192
|
|
|
Provision for income taxes
|
|
|
|
1,788
|
|
|
|
1,861
|
|
|
|
3,665
|
|
|
|
3,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
3,044
|
|
|
$
|
3,071
|
|
|
$
|
6,306
|
|
|
$
|
6,361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common stockholders - basic & diluted
|
|
|
$
|
3,022
|
|
|
$
|
3,050
|
|
|
$
|
6,266
|
|
|
$
|
6,314
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
Diluted
|
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
$
|
0.17
|
|
|
$
|
0.18
|
|
|
Weighted average number of shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
34,727,219
|
|
|
|
34,329,898
|
|
|
|
34,651,885
|
|
|
|
34,292,955
|
|
|
Diluted
|
|
|
|
35,992,541
|
|
|
|
35,105,923
|
|
|
|
35,924,077
|
|
|
|
35,062,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
OTHER INFORMATION
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
GAAP net income
|
|
$
|
3,044
|
|
$
|
3,071
|
|
|
$
|
6,306
|
|
$
|
6,361
|
|
Provision for income taxes
|
|
|
1,788
|
|
|
1,861
|
|
|
|
3,665
|
|
|
3,831
|
|
Interest expense, net
|
|
|
1,108
|
|
|
1,003
|
|
|
|
2,290
|
|
|
2,174
|
|
Depreciation and amortization
|
|
|
2,305
|
|
|
2,321
|
|
|
|
4,648
|
|
|
4,609
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
8,245
|
|
$
|
8,256
|
|
|
$
|
16,909
|
|
$
|
16,975
|
|
Share based compensation
|
|
|
1,474
|
|
|
1,413
|
|
|
|
2,811
|
|
|
2,523
|
|
Non-cash add backs
|
|
|
447
|
|
|
N/A
|
|
|
|
552
|
|
|
N/A
|
|
Restructuring, issuance and cash non-operating costs(2)
|
|
|
35
|
|
|
N/A
|
|
|
|
347
|
|
|
N/A
|
|
Acquisition expenses
|
|
|
-
|
|
|
N/A
|
|
|
|
-
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted EBITDA(1)
|
|
$
|
10,201
|
|
$
|
9,669
|
|
|
$
|
20,619
|
|
$
|
19,498
|
(1) The definition of Adjusted EBITDA was modified on October 30, 2009.
As a result, certain add backs to Adjusted EBITDA are not applicable in
three or six months ended June 30, 2009.
(2) Permits an add-back of up to $250 thousand of cash non-operating
expense, which is not to exceed a maximum of $1.5 million when combined
together with restructuring and issuance costs, on a trailing 12-month
basis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP NET
ADJUSTED EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
GAAP operating income
|
|
|
$
|
6,624
|
|
$
|
6,351
|
|
|
$
|
13,176
|
|
$
|
13,051
|
|
Depreciation and amortization
|
|
|
|
2,305
|
|
|
2,321
|
|
|
|
4,648
|
|
|
4,609
|
|
Share based compensation
|
|
|
|
1,474
|
|
|
1,413
|
|
|
|
2,811
|
|
|
2,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net adjusted EBITDA
|
|
|
$
|
10,403
|
|
$
|
10,085
|
|
|
$
|
20,635
|
|
$
|
20,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INFORMATION
Share based compensation is comprised of the following:
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2010
|
|
2009
|
|
|
2010
|
|
2009
|
|
Marketing and selling
|
|
$
|
543
|
|
$
|
470
|
|
|
$
|
1,023
|
|
$
|
882
|
|
Research and development
|
|
|
309
|
|
|
389
|
|
|
|
615
|
|
|
554
|
|
General and administrative
|
|
|
622
|
|
|
554
|
|
|
|
1,173
|
|
|
1,087
|
|
|
|
|
|
|
|
|
|
|
|
|
Total share based compensation
|
|
$
|
1,474
|
|
$
|
1,413
|
|
|
$
|
2,811
|
|
$
|
2,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
MARKET INFORMATION
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents revenue for our two major markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
2010
|
|
|
2009
|
|
OEM
|
|
$
|
18,387
|
|
$
|
16,894
|
|
|
$
|
36,008
|
|
$
|
34,177
|
|
Creative professional
|
|
|
6,048
|
|
|
5,357
|
|
|
|
12,888
|
|
|
11,680
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
24,435
|
|
$
|
22,251
|
|
|
$
|
48,896
|
|
$
|
45,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INFORMATION
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
RECONCILIATION OF FORECASTED GAAP OPERATING INCOME TO
FORECASTED NON-GAAP NET ADJUSTED EBITDA
|
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
|
High End of Guidance
|
|
|
|
Q3 2010
|
|
|
Q3 2010
|
|
GAAP operating income
|
|
$
|
7,900
|
|
|
$
|
8,900
|
|
Depreciation and amortization
|
|
|
2,400
|
|
|
|
2,400
|
|
Share based compensation
|
|
|
1,200
|
|
|
|
1,200
|
|
|
|
|
|
|
|
|
Non-GAAP net adjusted EBITDA
|
|
$
|
11,500
|
|
|
$
|
12,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
|
High End of Guidance
|
|
|
|
2010
|
|
|
2010
|
|
GAAP operating income
|
|
$
|
28,300
|
|
|
$
|
31,300
|
|
Depreciation and amortization
|
|
|
9,500
|
|
|
|
9,500
|
|
Share based compensation
|
|
|
5,200
|
|
|
|
5,200
|
|
|
|
|
|
|
|
|
Non-GAAP net adjusted EBITDA
|
|
$
|
43,000
|
|
|
$
|
46,000
|
ICR
Staci Mortenson, 781-970-6120
ir@monotypeimaging.com
Copyright © 2012, Business Wire, Inc., All rights reserved. Copyright © 2012, NewsBlaze, Daily News
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