Prepress

Monotype Imaging Announces First Quarter 2011 Results

Tuesday 03. May 2011 - Company Reports Record Revenue

Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading global provider of text imaging solutions, today announced financial results for the first quarter ended March 31, 2011.
First quarter 2011 highlights:
First quarter revenue was $29.7 million, a 22 percent increase year-over-year.
Operating income for the first quarter increased 45 percent to $9.5 million, a 32 percent operating margin.
Non-GAAP net adjusted EBITDA for the first quarter increased 31 percent to $13.4 million, or 45 percent of revenue.
First quarter non-GAAP earnings per diluted share were $0.21.
“We’re off to a strong start, with both our OEM and Creative Professional businesses reporting double-digit, year-over-year growth,” said Doug Shaw, president and chief executive officer. “Our OEM results reflect a positive impact from new design wins and our expansion across a diverse range of consumer electronics devices. Our Creative Professional business has benefited from increased brand investment by our customers in digital media.”
Scott Landers, senior vice president and chief financial officer, said, “We are pleased with our ability to generate a 45 percent net adjusted EBITDA margin, and our top line demonstrates the continued execution against our growth plan.”
First quarter operating results
Revenue for the first quarter of 2011 was $29.7 million, up 22 percent compared to $24.5 million in the first quarter of 2010. OEM revenue for the quarter was $21.9 million, increasing 24 percent from the first quarter of 2010. Creative Professional revenue for the quarter was $7.8 million, increasing 14 percent from the first quarter of 2010.
Net income for the first quarter of 2011 was $5.4 million, compared to $3.3 million in the first quarter of 2010. Earnings per diluted share for the first quarter of 2011 were $0.15, compared to $0.09 in the same period last year.
Non-GAAP net income for the first quarter of 2011, which excludes the amortization of intangible assets and stock-based compensation expense, net of taxes, was $7.8 million, compared to $5.4 million in the first quarter of 2010. Non-GAAP earnings per diluted share for the first quarter of 2011 were $0.21, compared to $0.15 in the same period last year.
In the first quarter of 2011, non-GAAP net adjusted EBITDA was $13.4 million or 45 percent of revenue, compared to $10.2 million or 42 percent of revenue in the first quarter of 2010.
A reconciliation of GAAP measures to non-GAAP measures for the three months ended March 31, 2011 and 2010 is provided in the financial tables that accompany this release.
Cash, cash flow and debt balances
Monotype Imaging had cash and cash equivalents of $48.9 million as of March 31, 2011, an increase from $42.8 million as of Dec. 31, 2010. Monotype Imaging generated $7.0 million of cash from operations in the first quarter of 2011.
The company’s outstanding debt was $64.4 million as of March 31, 2011, a decrease from $65.9 million as of Dec. 31, 2010 and a decrease from $83.8 million as of March 31, 2010.
Net debt, defined as outstanding debt less cash and cash equivalents, was $15.5 million as of March 31, 2011, a decrease from $23.1 million as of Dec. 31, 2010 and a decrease from $45.6 million as of March 31, 2010.
Financial outlook
For the second quarter of 2011, Monotype Imaging expects revenue in the range of $30.5 million to $32.0 million. The company expects second quarter 2011 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 $0.14 to $0.16 and non-GAAP earnings per diluted share in the range of $0.20 to $0.22.
For full year 2011, Monotype Imaging expects revenue in the range of $119.0 million to $123.0 million. The company expects full year 2011 non-GAAP net adjusted EBITDA in the range of $52.0 million to $55.0 million and GAAP earnings per diluted share in the range of $0.55 to $0.60 and non-GAAP earnings per diluted share in the range of $0.80 to $0.85.