Prepress

Monotype Announces Second Quarter 2013 Results

Monday 29. July 2013 - 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 second quarter ended June 30, 2013.

Second quarter 2013 highlights
Revenue was $41.1 million, a seven percent increase year over year.
Operating income was $12.2 million, or 30 percent of revenue.
Non-GAAP net adjusted EBITDA was $17.3 million, or 42 percent of revenue.
Cash flow from operations was a record $17.9 million.
Cash was $51.7 million as of June 30, 2013, with no debt outstanding.
“Our results show that Monotype is becoming an even more valued partner to creative professionals trying to solve the toughest responsive design challenges,” said Doug Shaw, president and chief executive officer. “Our solutions provide the freedom, flexibility and functionality required to streamline the creative workflow and deliver the best branded experiences.”
“During the quarter, we further strengthened our balance sheet, generating nearly $18 million in cash from operations. We paid off our remaining debt and ended the quarter with $51.7 million in cash. We remain aligned with our stated strategy of investing for growth, both organically and through acquisitions, while returning cash to our shareholders,” said Scott Landers, senior vice president and chief financial officer.
Second quarter 2013 operating results
Revenue for the quarter was $41.1 million, up seven percent compared to $38.5 million for the second quarter of 2012. OEM revenue was $26.4 million, a six percent increase from the second quarter of 2012. Creative Professional revenue was $14.7 million, a gain of eight percent from the same period in 2012.
Net income was $7.3 million, compared to $7.4 million in the second quarter of 2012. Earnings per diluted share were $0.18, compared to $0.19 in the same period in 2012.
Non-GAAP net income, which excludes the amortization of intangible assets and stock-based compensation expense, net of taxes, was $10.3 million, compared to $10.1 million in the second quarter of 2012. Non-GAAP earnings per diluted share were $0.26, compared to $0.27 in the same period in 2012.
For the second quarter, GAAP and non-GAAP earnings per diluted share were negatively impacted by $0.02 due to a higher than anticipated tax rate of 37 percent, and a yen-related foreign exchange impact of $300,000.
Non-GAAP net adjusted EBITDA was $17.3 million, or 42 percent of revenue, compared to $16.4 million or 43 percent of revenue in the second quarter of 2012.
A reconciliation of GAAP measures to non-GAAP measures for the three and six months ended June 30, 2013 and 2012 is provided in the financial tables that accompany this release.
Cash, cash flow and debt balances
Monotype had cash and cash equivalents of $51.7 million as of June 30, 2013, compared to $39.3 million as of Dec. 31, 2012, and $43.0 million as of March 31, 2013. The company generated $17.9 million of cash from operations in the second quarter of 2013.
Monotype had no debt outstanding as of June 30, 2013, a decrease from $22.3 million as of Dec. 31, 2012, and $42.3 million as of June 30, 2012.
Quarterly dividend
Monotype’s most recent dividend payment of $0.06 per share was paid on July 19, 2013, to shareholders of record on July 1, 2013. The next dividend payment of $0.06 per share will be paid on Oct. 21, 2013, to shareholders of record as of Oct. 1, 2013.
Financial outlook
For the third quarter of 2013, Monotype expects revenue in the range of $39.0 million to $40.5 million. The company anticipates third quarter 2013 non-GAAP net adjusted EBITDA in the range of $15.5 million to $17.0 million, GAAP earnings per diluted share in the range of $0.16 to $0.18 and non-GAAP earnings per diluted share in the range of $0.24 to $0.26.
Monotype is adjusting its previously issued, full-year 2013 guidance, which anticipated revenue in the range of $165.0 million to $169.0 million. The company now expects revenue in the range of $165.0 to $168.0 million, inclusive of an approximately $1.0 million negative impact from foreign exchange rates, not previously considered in the full-year 2013 revenue guidance. GAAP and non-GAAP earnings per diluted share are now expected to be in the range of $0.76 to $0.80 and $1.07 to $1.11, respectively, reflecting the full year impact of foreign exchange and a slightly higher tax rate.
The company is reiterating its full year 2013 non-GAAP net adjusted EBITDA in the range of $69.5 million to $72.5 million.