Prepress

Monotype Announces First Quarter 2014 Results

Monday 05. May 2014 - Company Reports Record Revenue and Profits

Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading provider of typefaces, technology and expertise for creative applications and consumer devices, today announced financial results for the first quarter ended March 31, 2014.
First quarter 2014 highlights
Revenue for the quarter was a record $46.1 million, a 10 percent increase year-over-year.
Operating income was $13.9 million, or 30 percent of revenue.
Non-GAAP net adjusted EBITDA was a record $19.2 million, or 42 percent of revenue.
Cash flow from operations was $16.8 million.
“Monotype had a strong first quarter, driven by continued momentum in Creative Professional, as we helped more brands take advantage of expanding opportunities in today’s multi-screen world,” said Doug Shaw, president and chief executive officer. “In addition, we’re very pleased with our recent acquisition of Mark Boulton Design. With the new team on board adding to our deep bench of talent, we’re well positioned to drive home the importance of Web fonts, responsive design and HTML5 to help brands to deliver exceptional experiences across multiple devices.”
“We’re executing well in each of the markets we serve, while driving our model of growth, profitability and cash flow. We are continuing to invest in the business long term, while providing additional return to shareholders,” said Scott Landers, senior vice president and chief financial officer. “During the quarter, we returned more than $9.0 million to shareholders through our dividend and share repurchase programs, while increasing our cash balance nearly $10.0 million.”
First quarter 2014 operating results
Revenue for the quarter was $46.1 million, up 10 percent compared to $42.0 million for the first quarter of 2013. Creative Professional revenue was $17.7 million, increasing 16 percent from the same period in 2013. OEM revenue was $28.4 million, increasing six percent from the first quarter of 2013.
Net income was $8.4 million, compared to $8.6 million in the first quarter of 2013. Earnings per diluted share were $0.21, compared to $0.22 in the same period in 2013.
Non-GAAP net income, which excludes the amortization of intangible assets and share based compensation expense, net of taxes, was $11.5 million, compared to $11.6 million in the first quarter of 2013. Non-GAAP earnings per diluted share were $0.29 compared to $0.30 in the same period in 2013.
Non-GAAP net adjusted EBITDA was $19.2 million, or 42 percent of revenue, compared to $18.6 million in the first quarter of 2013.
In the first quarter, Monotype incurred approximately $900,000 of expenses related to acquisition and other non-recurring legal and administrative expenses.
A reconciliation of GAAP measures to non-GAAP measures for the three months ended March 31, 2014 and 2013 is provided in the financial tables that accompany this release.
Cash and cash flow
Monotype had cash and cash equivalents of $88.2 million as of March 31, 2014, compared to $78.4 million as of Dec. 31, 2013, and $43.0 million as of March 31, 2013. The company generated $16.8 million of cash from operations in the first quarter of 2014.
Quarterly dividend and share repurchase program
Monotype’s most recent dividend payment of $0.08 per share was paid on April 21, 2014, to shareholders of record on April 1, 2014, and represented a 33 percent increase per share from the previous payment. The next dividend payment of $0.08 per share will be paid on July 21, 2014, to shareholders of record as of July 1, 2014.
During the first quarter of 2014, Monotype repurchased approximately 227,000 shares of common stock under the company’s existing repurchase program for an aggregate amount of approximately $6.8 million. Monotype purchased the shares on the open market at prevailing market prices.
Financial outlook
For the second quarter of 2014, Monotype expects revenue in the range of $44.0 million to $45.5 million. The company anticipates second quarter 2014 non-GAAP net adjusted EBITDA in the range of $17.5 million to $19.0 million, GAAP earnings per diluted share in the range of $0.16 to $0.19 and non-GAAP earnings per diluted share in the range of $0.25 to $0.28.
Monotype is today reiterating its previously issued, full year 2014 guidance. The company expects revenue in the range of $180.0 million to $185.0 million. The company anticipates full year 2014 non-GAAP net adjusted EBITDA in the range of $74.5 million to $78.5 million, GAAP earnings per diluted share in the range of $0.77 to $0.83 and non-GAAP earnings per diluted share in the range of $1.12 to $1.18.