WOBURN, Mass., July 30, 2010 - 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:
"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.
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.
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. © 2010 Monotype Imaging Holdings Inc. All rights reserved.