Monotype Imaging Completes Acquisition of Bitstream's Font Business
WOBURN, Mass.--(BUSINESS WIRE)--
Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading global provider
of text imaging solutions, today announced it has completed its
acquisition of Bitstream Inc.'s font business in an all cash merger
valued at approximately $50 million, subject to adjustments based on the
closing net asset value of the company.
"This is a great day in our history," said Doug Shaw, president and
chief executive officer of Monotype Imaging. "Our mission is to be the
first place to turn for typefaces, technology and expertise that enable
the best user experience and ensure brand integrity regardless of
device, platform or language. We're excited to welcome Bitstream's team
of experts to Monotype Imaging — professionals who care as passionately
about type as we do."
Monotype Imaging's global reach and financial strength, combined with
Bitstream's strong online font store and OEM business, position Monotype
Imaging to serve broader markets, while addressing a wider range of
customer needs. The acquisition is expected to strengthen Monotype
Imaging's products and services, while providing customers with improved
choice and flexibility.
Included in the acquisition is the popular MyFonts.comsm
website, featuring 89,000 fonts from nearly 900 foundries, in addition
to the widely used WhatTheFontsm identification service. The
transaction also includes the Bitstream® typeface library, the company's
Font Fusion® and Bitstream Panorama™ font rendering and layout
technologies, a range of fonts for embedded and mobile environments, and
10 patents. Thirteen employees from Bitstream's U.S. operations, in
addition to 42 Bitstream engineers and type designers who work in Noida,
India, are joining Monotype Imaging, providing the company with an
expanded global presence.
Expected financial impact from the acquisition of Bitstream's font
business
Based on the timing of the close of the acquisition of Bitstream's font
business, Monotype Imaging expects the financial impact to be immaterial
to the first quarter of 2012 and is reiterating the financial guidance
that was provided on Feb. 16, 2012. For the first quarter, the company
continues to expect revenue in the range of $32.5 million to $34.0
million, non-GAAP net adjusted EBITDA in the range of $13.5 million to
$14.5 million, GAAP earnings per diluted share in the range of $0.15 to
$0.17 and non-GAAP earnings per diluted share in the range of $0.21 to
$0.23.
For the full year 2012, Monotype Imaging expects Bitstream's font
business to contribute approximately $13.0 million to $14.0 million in
revenue and $2.0 million to $3.0 million in net adjusted EBITDA. The
full year 2012 impact from the Bitstream acquisition includes the
purchase accounting write-down of deferred revenue, the alignment of
Bitstream's revenue recognition policies with Monotype Imaging's
policies and integration costs. Total revenue is now expected to be in
the range of $146.0 million to $151.0 million, up from prior guidance of
$133.0 million to $137.0 million. Net adjusted EBITDA is now expected to
be in the range of $59.0 million to $63.0 million, up from prior
guidance of $57.0 million to $60.0 million. The acquisition is expected
to be neutral to GAAP earnings per diluted share in the range of $0.68
to $0.73, and non-GAAP earnings per diluted share is now expected to be
in the range of $0.96 to $1.01, up from prior guidance of $0.93 to $0.98.
A reconciliation of GAAP measures to non-GAAP measures for the three
months ended March 31, 2012 and the full year 2012 is provided in the
financial tables that accompany this release.
Conference call details
Monotype Imaging will host a conference call for financial analysts and
shareholders tomorrow, March 20, 2012, at 8:00 a.m. EDT to discuss the
company's acquisition of Bitstream's font business. Individuals who are
interested in listening to the audio webcast should go to the Investor
Relations portion of the About Us section of Monotype Imaging's website
at www.monotypeimaging.com.
The live call can also be accessed by dialing 1-866-225-8754 (domestic)
or 1-480-629-9818 (international) using passcode 4525767. If individuals
are unable to listen to the live call, the audio webcast will be
archived in the Investor Relations portion of the company's website for
one year.
Forward-looking statements
This press release contains certain forward-looking statements about
Monotype Imaging, including statements that involve risks and
uncertainties concerning Monotype Imaging's operation of Bitstream's
business after the acquisition. Actual events or results may differ
materially from those described, expressed or implied in this press
release due to a number of risks and uncertainties, many of which are
beyond the control of Monotype Imaging. The potential risks and
uncertainties include, among others, risks related to our ability to
integrate the Bitstream business with Monotype Imaging's business, the
possibility that the financial performance of the business will fail to
meet expectations, general economic conditions, industry specific
conditions and the possibility that Monotype Imaging may be adversely
affected by other economic, business or competitive factors. In
addition, information is available in the documents that Monotype
Imaging and Bitstream, respectively, file with the SEC on Forms 10-K,
10-Q and 8-K. These filings identify and address other important factors
that could cause Monotype Imaging's financial and operational results to
differ materially from those contained in the forward-looking statements
set forth in this document. Accordingly, no assurances can be given that
any of the events anticipated by the forward-looking statements will
transpire or occur, or if any of them do so, what impact they will have
on the results of operations or the financial condition of Monotype
Imaging. The company is under no duty to update any of the
forward-looking statements after the date of this press release to
conform to actual results.
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, e-book readers, tablets, automotive displays,
digital cameras, navigation devices, digital televisions, set-top boxes
and consumer appliances. The company also provides printer drivers, page
description language interpreters, printer user interface technology and
color imaging solutions to printer manufacturers and OEMs (original
equipment manufacturers). Monotype Imaging technologies are combined
with access to more than 15,000 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®,
Frutiger®
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 and Frutiger are trademarks 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. Font Fusion, Pageflex and BOLT are either
registered trademarks or trademarks of Marlborough Software Development
Holdings Inc. Bitstream, WhatTheFont and Panorama are registered
trademarks or trademarks of Bitstream Inc. MyFonts and MyFonts.com are
registered service marks of Bitstream Inc. All other trademarks are the
property of their respective owners. ©2012 Monotype Imaging Holdings
Inc. All rights reserved.
FREQUENTLY ASKED QUESTIONS
1. Who is Bitstream?
Bitstream was founded in 1981 as a font foundry and evolved to
developing software and applications for the graphic arts and mobile
communications industries. Bitstream's fonts and font technologies
enabled device manufacturers and application developers to render the
highest-quality text in any language, on any device, at any resolution.
Bitstream's MyFonts brand is one of the world's leading online providers
of fonts to consumers.
2. Which parts of Bitstream's business did Monotype Imaging
acquire?
Monotype Imaging has acquired Bitstream's font business, which comprises
e-commerce solutions and OEM technologies. Solutions include Bitstream's
popular MyFonts.com website, featuring 89,000 fonts from nearly 900
foundries, and Bitstream's acclaimed WhatTheFont identification service,
in addition to the Bitstream typeface library. OEM assets include
Bitstream's Font Fusion and Bitstream Panorama font rendering and layout
technologies, as well as a range of fonts for embedded and mobile
environments. Monotype Imaging has also acquired 10 patents, covering
areas from OEM technologies to Bitstream's WhatTheFont application.
3. Why did Monotype Imaging acquire the font business of
Bitstream?
Monotype Imaging's mission is to be the first place to turn for
typefaces, technology and expertise that enable the best user experience
and ensure brand integrity regardless of device, platform or language.
The addition of Bitstream's font business is expected to enhance
Monotype Imaging's ability to accelerate growth across its customer
base, expand the company's IP and capture emerging opportunities,
particularly in Web font services and Monotype Imaging's Display Imaging
business. In addition, the company believes that its global reach and
financial strength combined with Bitstream's renowned MyFonts website
and OEM business now position Monotype Imaging to serve broader markets,
while continuing to deliver high-quality experiences on any publishing
medium, platform or device.
4. What is the background that led to the acquisition?
In September of 2010, Bitstream announced that it had hired a financial
advisory company to advise Bitstream with respect to business
opportunities for enhancing shareholder value. Monotype Imaging's
interest in Bitstream's font business stemmed from a fundamental passion
for type, which is at the center of Monotype Imaging's expertise. When
the opportunity was presented to pursue Bitstream's font business,
Monotype Imaging saw this as natural fit. For example, Bitstream's
approach to serving broad markets by way of new and distinctive
typefaces is expected to complement Monotype Imaging's strength in
leveraging its historic, classic type collections and multilingual
offering to meet the needs of corporations and brands. Monotype Imaging
believes the acquisition will dovetail effectively with the company's
team, technology and culture.
5. What parts of Bitstream did Monotype Imaging not acquire?
Monotype Imaging did not acquire Bitstream's BOLT™ mobile browsing and
Pageflex® variable data publishing technologies. As part of the
agreement to acquire Bitstream's font business, these other businesses
were spun out to form a new public company, Marlborough Software
Development Holdings.
6. What were the financial terms of the transaction?
Monotype Imaging acquired Bitstream's font business in an all cash
merger valued at approximately $50 million, which included adjustments
based on the closing net asset value of Bitstream. To fund the
acquisition, Monotype Imaging drew $25 million on the company's
revolving line of credit.
7. How many Bitstream employees are joining Monotype Imaging?
Thirteen employees have joined Monotype Imaging from Bitstream's U.S.
operation, in addition to 42 engineers and type designers in Noida,
India.
8. How are customers expected to benefit from the acquisition?
Monotype Imaging believes the acquisition will enhance the company's
e-commerce and Web font businesses through a greater selection of fonts
and technology solutions. For example, Monotype Imaging intends to
support, promote and grow the MyFonts brand and website, which is the
resource of choice for a strong community of loyal customers. Monotype
Imaging anticipates that OEMs will also have access to a greater
portfolio of solutions, particularly in the company's Display Imaging
business. In addition, resources in India will not only contribute to
development and R&D functions but also custom type design, particularly
for Indic markets.
9. How is Monotype Imaging integrating Bitstream's font
business?
Now that the acquisition has closed, Monotype Imaging is beginning to
integrate and work with Bitstream's products, services and personnel.
Talent from Bitstream is expected to positively impact Monotype
Imaging's e-commerce and type design and development teams, as well as
Display Imaging sales. The company's development and quality engineering
resources have expanded substantially, with the addition of 42 employees
in India, who will continue to work from the development facility in
Noida.
10. What will happen to MyFonts?
MyFonts is recognized as one of the top e-commerce font websites in the
world. It features the WhatTheFont identification service, which enables
people to quickly and easily identify fonts. Unknown fonts are submitted
as images, which are then identified by Bitstream or people who use the
site. Bitstream cultivated an active creative community, helping to
drive exciting, innovative design. The company also delivered an
excellent user experience and gave type designers considerable control
over the work and business. Monotype Imaging intends to maintain
MyFonts.com, with an eye toward supporting and extending the best
aspects of MyFonts within the company's cloud-based offerings.
11. How will Bitstream's OEM business be integrated?
Bitstream brings to Monotype Imaging highly experienced OEM
professionals and a complementary customer base that maps directly into
the markets Monotype Imaging serves, particularly in Display Imaging.
The acquisition opens opportunity to expand within Bitstream OEM
accounts to provide additional value, while adding depth to Monotype
Imaging's family of OEM products and services.
12. Will Bitstream agreements continue to be honored?
Monotype Imaging will continue to honor the terms and conditions of all
existing agreements for current Bitstream customers.
Additional information about the merger is available on the SEC website
by accessing Monotype Imaging's Form 8-K, which announces the
transaction and includes the merger agreement.
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MONOTYPE IMAGING HOLDINGS INC.
|
|
OTHER INFORMATION
|
|
|
|
RECONCILIATION OF CURRENT FORECASTED GAAP EARNINGS PER DILUTED
SHARE TO FORECASTED NON-GAAP EARNINGS PER DILUTED SHARE
|
|
(Unaudited and in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
High End of Guidance
|
|
|
|
|
2012
|
|
|
2012
|
|
GAAP net income
|
|
$
|
25,300
|
|
$
|
27,300
|
|
Amortization, net of tax
|
|
|
6,400
|
|
|
6,400
|
|
Share-based compensation, net of tax
|
|
|
4,200
|
|
|
4,200
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
|
35,900
|
|
|
37,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per diluted share
|
|
$
|
0.68
|
|
$
|
0.73
|
|
Amortization, net of tax, per diluted share
|
|
|
0.17
|
|
|
0.17
|
|
Share-based compensation, net of tax, per diluted share
|
|
|
0.11
|
|
|
0.11
|
|
|
|
|
|
|
|
Non-GAAP earnings per diluted share
|
|
$
|
0.96
|
|
$
|
1.01
|
|
|
|
|
|
|
|
Weighted average diluted shares used to compute non-GAAP earnings
per share
|
|
|
37,500,000
|
|
|
37,500,000
|
|
Assumes 36% effective tax rate.
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
|
|
|
|
RECONCILIATION OF PREVIOUSLY FORECASTED GAAP EARNINGS PER
DILUTED SHARE TO FORECASTED NON-GAAP EARNINGS PER DILUTED SHARE
|
|
(Unaudited and in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
High End of Guidance
|
|
|
|
|
2012
|
|
|
2012
|
|
GAAP net income
|
|
$
|
25,300
|
|
$
|
27,300
|
|
Amortization, net of tax
|
|
|
5,200
|
|
|
5,200
|
|
Share-based compensation, net of tax
|
|
|
4,200
|
|
|
4,200
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
|
34,700
|
|
|
36,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per diluted share
|
|
$
|
0.68
|
|
$
|
0.73
|
|
Amortization, net of tax, per diluted share
|
|
|
0.14
|
|
|
0.14
|
|
Share-based compensation, net of tax, per diluted share
|
|
|
0.11
|
|
|
0.11
|
|
|
|
|
|
|
|
Non-GAAP earnings per diluted share
|
|
$
|
0.93
|
|
$
|
0.98
|
|
|
|
|
|
|
|
Weighted average diluted shares used to compute non-GAAP earnings
per share
|
|
|
37,500,000
|
|
|
37,500,000
|
|
Assumes 36% effective tax rate.
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
|
|
RECONCILIATION OF PREVIOUSLY FORECASTED GAAP OPERATING INCOME
TO FORECASTED NON-GAAP NET ADJUSTED EBITDA
|
|
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
High End of Guidance
|
|
|
|
|
2012
|
|
|
2012
|
|
GAAP operating income
|
|
$
|
41,200
|
|
$
|
44,200
|
|
Depreciation and amortization
|
|
|
9,300
|
|
|
9,300
|
|
Share-based compensation
|
|
|
6,500
|
|
|
6,500
|
|
|
|
|
|
|
|
Non-GAAP net adjusted EBITDA
|
|
$
|
57,000
|
|
$
|
60,000
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
|
|
RECONCILIATION OF CURRENT FORECASTED GAAP OPERATING INCOME TO
FORECASTED NON-GAAP NET ADJUSTED EBITDA
|
|
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
High End of Guidance
|
|
|
|
|
2012
|
|
|
2012
|
|
GAAP operating income
|
|
$
|
41,300
|
|
$
|
45,300
|
|
Depreciation and amortization
|
|
|
11,200
|
|
|
11,200
|
|
Share-based compensation
|
|
|
6,500
|
|
|
6,500
|
|
|
|
|
|
|
|
Non-GAAP net adjusted EBITDA
|
|
$
|
59,000
|
|
$
|
63,000
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
|
|
|
|
RECONCILIATION OF FORECASTED GAAP EARNINGS PER DILUTED SHARE TO
FORECASTED NON-GAAP EARNINGS PER DILUTED SHARE
|
|
(Unaudited and in thousands, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
High End of Guidance
|
|
|
|
Q1 2012
|
|
Q1 2012
|
|
GAAP net income
|
|
$
|
5,700
|
|
$
|
6,200
|
|
Amortization, net of tax
|
|
|
1,300
|
|
|
1,300
|
|
Share-based compensation, net of tax
|
|
|
1,100
|
|
|
1,100
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
8,100
|
|
$
|
8,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings per diluted share
|
|
$
|
0.15
|
|
$
|
0.17
|
|
Amortization, net of tax, per diluted share
|
|
|
0.03
|
|
|
0.03
|
|
Share-based compensation, net of tax, per diluted share
|
|
|
0.03
|
|
|
0.03
|
|
|
|
|
|
|
|
Non-GAAP earnings per diluted share
|
|
$
|
0.21
|
|
$
|
0.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares used to compute non-GAAP earnings
per share
|
|
|
37,300,000
|
|
|
37,300,000
|
|
Assumes 37% effective tax rate.
|
|
|
|
|
|
MONOTYPE IMAGING HOLDINGS INC.
|
|
RECONCILIATION OF FORECASTED GAAP OPERATING INCOME TO
FORECASTED NON-GAAP NET ADJUSTED EBITDA
|
|
(Unaudited and in thousands)
|
|
|
|
|
|
|
|
|
|
Low End of Guidance
|
|
High End of Guidance
|
|
|
|
Q1 2012
|
|
Q1 2012
|
|
GAAP operating income
|
|
$
|
9,400
|
|
$
|
10,400
|
|
Depreciation and amortization
|
|
|
2,300
|
|
|
2,300
|
|
Share-based compensation
|
|
|
1,800
|
|
|
1,800
|
|
|
|
|
|
|
|
Non-GAAP net adjusted EBITDA
|
|
$
|
13,500
|
|
$
|
14,500
|
Monotype Imaging Inc.
Vikki Quick, 781-970-6115
vikki.quick@monotypeimaging.com
or
Investor
Relations:
Staci Mortenson, 781-970-6120
ir@monotypeimaging.com
Source: Monotype Imaging Holdings Inc.
News Provided by Acquire Media
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