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Monotype Announces First Quarter 2015 ResultsMonotype 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, 2015. First quarter 2015 highlights
"We ended the quarter with mixed results. While our Creative Professional business continued to drive strong, double-digit revenue growth, results were lower than expected in the embedded side of our OEM business, primarily printers. Overall revenue was flat, year over year," said Doug Shaw, president and chief executive officer. "Our markets are evolving to serve a more content-centric world. We believe this trend toward digital content represents a significant catalyst that will help us redefine some of our OEM opportunities - and fuel growth in our Creative Professional business." Scott Landers, chief operating officer and chief financial officer, said, "Our business and profit models remain strong, and we will continue to invest in support of our long-term goals. For the second half of the year, we expect net adjusted EBITDA margins to trend upward toward more traditional levels, as we anticipate revenue growth to improve." First quarter 2015 operating results Revenue for the quarter was $46.0 million, compared to $46.1 million for the first quarter of 2014. Creative Professional revenue was $20.5 million, an increase of 16 percent from the same period in 2014. OEM revenue was $25.5 million, down 10 percent from the first quarter of 2014. Net income was $7.4 million, compared to $8.4 million in the first quarter of 2014. Earnings per diluted share were $0.18, compared to $0.21 in the same period in 2014. Non-GAAP net income, which excludes the amortization of intangible assets and share based compensation expense, net of taxes, was $10.5 million, compared to $11.5 million in the first quarter of 2014. Non-GAAP earnings per diluted share were $0.26 compared to $0.29 in the same period in 2014. Non-GAAP net adjusted EBITDA was $16.2 million, or 35 percent of revenue, compared to $19.2 million in the first quarter of 2014. A reconciliation of GAAP measures to non-GAAP measures for the three months ended March 31, 2015 and 2014 is provided in the financial tables that accompany this release. Cash and cash flow Monotype had cash and cash equivalents of $78.8 million as of March 31, 2015, compared to $90.3 million as of Dec. 31, 2014, and $88.2 million as of March 31, 2014. The company generated $10.9 million of cash from operations in the first quarter of 2015 and used $14.3 million for acquisitions. Quarterly dividend and share repurchase program Monotype's most recent dividend payment of $0.10 per share was paid on April 21, 2015, to shareholders of record on April 1, 2015, and represented a 25 percent increase per share from the previous payment. The next dividend payment of $0.10 per share will be paid on July 21, 2015, to shareholders of record as of July 1, 2015. During the first quarter of 2015, Monotype repurchased 199,900 shares of common stock under the company's repurchase program for an aggregate amount of $6.1 million. Monotype purchased the shares on the open market at prevailing market prices. Since the start of its two-year share repurchase program in October, 2013, Monotype has spent $37.9 million to repurchase up to $50 million of the company's common stock. Financial outlook For the second quarter of 2015, Monotype expects revenue in the range of $44.0 million to $47.0 million. The company anticipates second quarter 2015 non-GAAP net adjusted EBITDA in the range of $15.0 million to $17.0 million, GAAP earnings per diluted share in the range of $0.13 to $0.17 and non-GAAP earnings per diluted share in the range of $0.22 to $0.26. Monotype today is lowering its previously issued, full year 2015 guidance. The company now expects revenue in the range of $188.0 million to $194.0 million. The company anticipates full year 2015 non-GAAP net adjusted EBITDA in the range of $69.0 million to $73.0 million, GAAP earnings per diluted share in the range of $0.70 to $0.76 and non-GAAP earnings per diluted share in the range of $1.05 to $1.11. Conference call details Monotype will host a conference call on Friday, May 1, 2015, at 8:30 a.m. EDT to discuss the company's first quarter 2015 results and business outlook for 2015. Individuals who are interested in listening to the audio webcast should log on to the Investors portion of the About Us section of Monotype's website at www.monotype.com. The live call can also be accessed by dialing 877-201-0168 (domestic) or 647-788-4901 (international) using passcode 27907847. If individuals are unable to listen to the live call, the audio webcast will be archived in the Investors portion of the company's website for one year. 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 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 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 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. Forward-looking statements This press release may contain forward-looking statements including those related to future revenues and operating results, the growth of the company's Creative Professional business and OEM 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, Web design tools or products that incorporate the company's text imaging solutions; risks associated with the maturation of the printer market and potential decreases in demand for our solutions; risks associated with the interruption of certain manufacturing chains as a result of natural disasters or political tensions; 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 incurrence of acquisition related costs and the company's ability to integrate products and employees from acquired companies in a timely manner or at all; 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; 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, 2014 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 to be included in the company's future earnings releases and public filings. While Monotype 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 Monotype is a leading global provider of typefaces, technology and expertise that enable the best user experience and ensure brand integrity. Headquartered in Woburn, Mass., Monotype provides customers worldwide with typeface solutions for a broad range of creative applications and consumer devices. The company's libraries and e-commerce sites are home to many of the most widely used typefaces - including the Helvetica®, Frutiger® and Univers® families - as well as the next generation of type designs. Further information is available at www.monotype.com. Follow Monotype on Twitter, Instagram and LinkedIn. Monotype, Helvetica and Frutiger are trademarks of Monotype Imaging Inc. registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. Univers is a trademark of Monotype GmbH registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. All other trademarks are the property of their respective owners. ©2015 Monotype Imaging Holdings Inc. All rights reserved.
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