Monotype Imaging Announces Fourth Quarter and Full Year 2011 Results
Company Reports Record Results
WOBURN, Mass., Feb 16, 2012 (BUSINESS WIRE) -- Monotype Imaging Holdings Inc.
(TYPE), a leading global provider of text imaging solutions, today announced
financial results for the fourth quarter and full year ended Dec. 31, 2011.
Full year 2011 highlights
-- 2011 revenue was $123.2 million, an increase of 16 percent year-over-year.
-- Non-GAAP net income was $32.6 million, an increase of 18 percent
year-over-year.
-- Non-GAAP net adjusted EBITDA was $54.6 million, or 44 percent of revenue,
representing a 14 percent increase over 2010.
-- Cash flow from operations was $39.3 million, and total cash exceeded total
debt by $16.5 million as of Dec. 31, 2011.
Fourth quarter 2011 highlights
-- Revenue for the quarter was a record $31.7 million, an eight percent increase
year-over-year.
-- Operating income was $9.5 million, or 30 percent of revenue.
-- Non-GAAP net adjusted EBITDA was $13.7 million, or 43 percent of revenue,
inclusive of approximately $600,000 of transaction costs.
-- Cash flow from operations was $11.1 million.
"Monotype Imaging delivered a record quarter, closing out another solid year.
This was led by double-digit growth in our Display Imaging and Creative
Professional businesses -- a direct result of the continued execution of our
strategy to diversify our business," said Doug Shaw, president and chief
executive officer. "During 2011, we expanded across multiple device categories
and established a leadership position in emerging markets such as Web fonts,
automotive displays and tablets. Our typefaces, technology and expertise are
enabling a growing number of customers to deliver high-quality, branded
experiences, regardless of device, platform or language."
"We continued to invest in support of our long-term strategic growth initiatives,
while delivering significant levels of profitability and cash flow. We've entered
2012 in a very solid financial position and will continue to capitalize on our
expanding leadership position across the markets we serve," said Scott Landers,
senior vice president and chief financial officer.
Fourth quarter 2011 operating results
Revenue for the quarter was $31.7 million, up eight percent compared to $29.4
million for the fourth quarter of 2010. OEM revenue was $23.8 million, increasing
six percent from the fourth quarter of 2010. Creative Professional revenue was
$7.9 million, increasing 15 percent from the same period in 2010.
Net income was $5.6 million, compared to $6.1 million in the fourth quarter of
2010. Earnings per diluted share were $0.15, compared to $0.17 in the same period
in 2010.
Non-GAAP net income, which excludes the amortization of intangible assets and
stock-based compensation expense, net of taxes, was $8.1 million, compared to
$8.5 million in the fourth quarter of 2010. Non-GAAP earnings per diluted share
were $0.21, compared to $0.23 in the same period in 2010.
Non-GAAP net adjusted EBITDA was $13.7 million, or 43 percent of revenue,
compared to $13.8 million or 47 percent of revenue in the fourth quarter of 2010.
In the fourth quarter of 2011, Monotype Imaging's operating expense and
profitability metrics, such as non-GAAP net adjusted EBITDA, included
approximately $600,000 of transaction costs related to the proposed acquisition
of the font business of Bitstream Inc. The equivalent GAAP and non-GAAP earnings
per share impact was $0.02.
Full year 2011 operating results
Revenue for 2011 was $123.2 million, an increase of 16 percent compared to $106.7
million for 2010. OEM revenues were $91.7 million, increasing 15 percent
year-over-year. Creative Professional revenues were $31.6 million, an increase of
18 percent year-over-year.
Net income for 2011 was $22.7 million, compared to net income of $18.4 million
for the prior year. Earnings per diluted share were $0.61 compared to earnings
per diluted share of $0.51 for 2010.
Non-GAAP net income, which excludes the amortization of intangible assets and
stock-based compensation expense, net of taxes, was $32.6 million, compared to
$27.7 million in 2010. Non-GAAP earnings per diluted share for 2011 were $0.88,
compared to $0.77 in the same period for 2010.
Non-GAAP net adjusted EBITDA was $54.6 million, or 44 percent of revenue,
compared to non-GAAP net adjusted EBITDA of $47.8 million, or 45 percent of
revenue, for 2010.
For 2011, Monotype Imaging's operating expense and profitability metrics, such as
non-GAAP net adjusted EBITDA, included approximately $800,000 of transaction
costs related to the acquisition of Ascender and the proposed acquisition of
Bitstream's font business. The equivalent GAAP and non-GAAP earnings per share
impact was $0.02.
A reconciliation of GAAP measures to non-GAAP measures for the three and 12
months ended Dec. 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 $53.9 million as of Dec. 31,
2011, an increase from $42.8 million as of Dec. 31, 2010. The company generated
$11.1 million of cash from operations in the fourth quarter of 2011 and $39.3
million for the full year 2011.
Monotype Imaging's outstanding debt was $37.3 million as of Dec. 31, 2011, a
decrease from $65.9 million as of Dec. 31, 2010.
The company had net cash of $16.5 million as of Dec. 31, 2011, compared to net
debt of $23.1 million as of Dec 31, 2010.
Financial outlook
For the first quarter of 2012, Monotype Imaging expects revenue in the range of
$32.5 million to $34.0 million. The company anticipates first quarter 2012
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 revenue in the range of $133.0
million to $137.0 million. The company anticipates full year 2012 non-GAAP net
adjusted EBITDA in the range of $57.0 million to $60.0 million, GAAP earnings per
diluted share in the range of $0.68 to $0.73 and non-GAAP earnings per diluted
share in the range of $0.93 to $0.98.
First quarter and full year guidance includes $500,000 and $1.0 million of
transaction expenses respectively, related to our proposed acquisition of
Bitstream's font business. These expenses will not be tax deductible.
Conference call details
Monotype Imaging will host a conference call on Thursday, Feb. 16, 2012, at 8:30
a.m. EST to discuss the company's fourth quarter and full year 2011 results and
business outlook for 2012. Individuals who are interested in listening to the
audio webcast should log on to the Investor Relations portion of the About Us
section of Monotype Imaging's website at monotypeimaging.com. The live
call can also be accessed by dialing 877-941-8609 (domestic) or 480-629-9818
(international) using passcode 4503843. 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.
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 Imaging 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 Imaging 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 Imaging
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 OEM
business and Creative Professional 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 or products that incorporate the company's text
imaging solutions; risks associated with the interruption of certain
manufacturing chains as a result of natural disasters; 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
company's ability to adapt its products to new markets and to anticipate and
quickly respond to evolving technologies and customer requirements; risks
associated with the company's proposed acquisition, including the risk that the
closing of the transaction could be delayed or that the transaction may not close
at all; 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, 2011 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 stated in the company's
Annual Report on Form 10-K for the quarter ended Dec. 31, 2011. While Monotype
Imaging 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 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(R),
Linotype(R) and ITC(R) typeface libraries -- home to some of the world's most
widely used designs, including the Times New Roman(R), Helvetica(R), Frutiger(R)
and ITC Franklin Gothic(TM) 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 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. All other trademarks are the
property of their respective owners. (C)2012 Monotype Imaging Holdings Inc. All
rights reserved.
MONOTYPE IMAGING HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands)
December 31,
----------------------------------
20112010
--------------------------------
ASSETS
Current assets:
Cash and cash equivalents$53,850$42,786
Accounts receivable, net6,5884,720
Income tax refunds receivable733340
Deferred income taxes506350
Prepaid expenses and other current assets3,2282,480
--------------
Total current assets64,90550,676
Property and equipment, net2,4041,589
Goodwill140,807142,354
Intangible assets, net71,66480,239
Other assets4,0423,947
--------------
Total assets$ 283,822$ 278,805
=== ========== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$1,123$753
Accrued expenses and other current liabilities12,23513,045
Accrued income taxes1,2801,171
Deferred revenue7,7428,506
Current portion of long-term debt10,0008,355
--------------
Total current liabilities32,38031,830
Long-term debt, less current portion27,32157,504
Other long-term liabilities225471
Deferred income taxes20,59619,328
Reserve for income taxes1,1741,125
Accrued pension benefits3,7653,565
Stockholders' equity:
Common stock3635
Additional paid-in capital167,448155,791
Treasury stock, at cost(86)(86)
Retained earnings30,9868,317
Accumulated other comprehensive (loss) income(23)925
------- ----------
Total stockholders' equity198,361164,982
--------------
Total liabilities and stockholders' equity$ 283,822$ 278,805
=== ========== =======
MONOTYPE IMAGING HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited and in thousands, except share and per share data)
Three Months EndedYear Ended
December 31,December 31,
--------------------------------------------------------
2011201020112010
-----------------------------------------------------------
Revenue$31,722$29,405$123,212$106,659
Cost of revenue2,6651,92410,1557,477
Cost of revenue--amortization of acquired technology7968803,1693,488
----------------------------------------
Total cost of revenue3,4612,80413,32410,965
----------------------------------------
Gross profit28,26126,601109,88895,694
Operating expenses:
Marketing and selling8,4247,02632,62225,935
Research and development4,3643,87916,54015,404
General and administrative4,7924,28817,41316,488
Amortization of other intangible assets1,2241,2185,0714,795
----------------------------------------
Total operating expenses18,80416,41171,64662,622
Income from operations9,45710,19038,24233,072
Other (income) expense:
Interest expense4661,0342,8544,421
Interest income(9)(3)(100)(16)
Loss on extinguishment of debt----422--
Other expense, net2233774461,687
----------------------------------------
Total other expense6801,4083,6226,092
Income before provision for income taxes8,7778,78234,62026,980
Provision for income taxes3,1382,65111,9518,620
----------------------------------------
Net income$5,639$6,131$22,669$18,360
== ============ ============ ============ ==========
Net income available to common shareholders - basic & diluted$5,550$6,083$22,302$18,237
== ============ ============ ============ ==========
Net income per common share:
Basic$0.16$0.17$0.63$0.52
Diluted$0.15$0.17$0.61$0.51
Weighted average number of shares:
Basic35,624,80935,302,47035,357,63034,762,919
Diluted37,156,68836,611,19136,817,37935,990,295
MONOTYPE IMAGING HOLDINGS INC.
OTHER INFORMATION
(Unaudited and in thousands)
RECONCILIATION OF GAAP OPERATING INCOME TO NON-GAAP NET ADJUSTED
EBITDA
Three Months EndedYear Ended
December 31,December 31,
------------------------------------
2011201020112010
--------------------------------------------
GAAP operating income$9,457$ 10,190$ 38,242$ 33,072
Depreciation and amortization2,3592,3579,3469,323
Share based compensation1,8461,2446,9745,450
------------------------
Non-GAAP net adjusted EBITDA$ 13,662$ 13,791$ 54,562$ 47,845
=== ========= ========= ========= ======
Transactions costs596238786248
------------------------
Non-GAAP net adjusted EBITDA,$ 14,258$ 14,029$ 55,348$ 48,093
excluding transaction costs
=== ========= ========= ========= ======
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
Three Months EndedYear Ended
December 31,December 31,
----------------------------------
2011201020112010
------------------------------------------
GAAP net income$ 5,639$ 6,131$ 22,669$ 18,360
Amortization, net of tax1,2971,4645,3975,641
Share based compensation, net of tax1,1858684,5683,711
----------------------
Non-GAAP net income$ 8,121$ 8,463$ 32,634$ 27,712
=== ======== ======== ========= ======
RECONCILIATION OF GAAP EARNINGS PER DILUTED SHARE TO NON-GAAP
EARNINGS PER DILUTED SHARE
Three Months EndedYear Ended
December 31,December 31,
----------------------------
2011201020112010
------------------------------------
GAAP earnings per diluted share$ 0.15$ 0.17$ 0.61$ 0.51
Amortization, net of tax0.030.040.150.16
Share based compensation, net of tax0.030.020.120.10
----------------
Non-GAAP earnings per diluted share$ 0.21$ 0.23$ 0.88$ 0.77
=== ======= ======= ======= ====
Transactions costs, net of tax0.020.010.020.01
----------------
Non-GAAP earnings per diluted share, excluding$ 0.23$ 0.24$ 0.90$ 0.78
transaction
costs
=== ======= ======= ======= ====
MONOTYPE IMAGING HOLDINGS INC.
OTHER INFORMATION
(Unaudited and in thousands)
OTHER INFORMATION
Share based compensation is comprised of the following:
Three Months EndedYear Ended
December 31,December 31,
--------------------------------
2011201020112010
----------------------------------------
Marketing and selling$794$493$ 2,966$ 2,042
Research and development4252621,6121,154
General and administrative6274892,3962,254
--------------------
Total share based compensation$ 1,846$ 1,244$ 6,974$ 5,450
=== ======== ======== ======== =====
MARKET INFORMATION
(Unaudited and in thousands)
The following table presents revenue for our two major markets:
Three Months EndedYear Ended
December 31,December 31,
--------------------------------------
2011201020112010
----------------------------------------------
OEM$ 23,826$ 22,512$91,656$80,000
Creative Professional7,8966,89331,55626,659
--------------------------
Total$ 31,722$ 29,405$ 123,212$ 106,659
=== ========= ========= ========== =======
MONOTYPE IMAGING HOLDINGS INC.
OTHER INFORMATION
(Unaudited and in thousands, except share and per share data)
RECONCILIATION OF FORECAST GAAP EARNINGS PER DILUTED SHARE TO
FORECAST NON-GAAP EARNINGS PER DILUTED SHARE
Low End ofHigh End of
GuidanceGuidance
--------------------------------
Q1 2012Q1 2012
------------------------------------
GAAP net income$5,700$6,200
Amortization, net of tax1,3001,300
Share-based compensation, net of tax1,1001,100
--------------------
Non-GAAP net income$8,100$8,600
====== ================ ==========
GAAP earnings per diluted share$0.15$0.17
Amortization, net of tax, per diluted share0.030.03
Share-based compensation, net of tax, per diluted share0.030.03
--------------------
Non-GAAP earnings per diluted share$0.21$0.23
====== ================ ==========
Weighted average diluted shares used to compute non-37,300,00037,300,000
GAAP
earnings per share
Assumes 37% effective tax rate.
Low End ofHigh End of
GuidanceGuidance
--------------------------------
20122012
------------------------------------
GAAP net income$25,300$27,300
Amortization, net of tax5,2005,200
Share-based compensation, net of tax4,2004,200
--------------------
Non-GAAP net income34,70036,700
====================
GAAP earnings per diluted share$0.68$0.73
Amortization, net of tax, per diluted share0.140.14
Share-based compensation, net of tax, per diluted share0.110.11
--------------------
Non-GAAP earnings per diluted share$0.93$0.98
====== ================ ==========
Weighted average diluted shares used to compute non-37,500,00037,500,000
GAAP
earnings per share
Assumes 36% effective tax rate.
MONOTYPE IMAGING HOLDINGS INC.
RECONCILIATION OF FORECAST GAAP OPERATING INCOME TO FORECAST
NON-GAAP NET ADJUSTED EBITDA
(Unaudited and in thousands)
Low End ofHigh End of
GuidanceGuidance
------------------------
Q1 2012Q1 2012
----------------------------
GAAP operating income$9,400$ 10,400
Depreciation and amortization2,3002,300
Share-based compensation1,8001,800
------------
Non-GAAP net adjusted EBITDA$ 13,500$ 14,500
====== ============ ======
Transaction expenses500500
------------
Non-GAAP net adjusted EBITDA, excluding$ 14,000$ 15,000
transaction expenses
====== ============ ======
Low End ofHigh End of
GuidanceGuidance
----------------------
20122012
--------------------------
GAAP operating income$ 41,200$ 44,200
Depreciation and amortization9,3009,300
Share-based compensation6,5006,500
------------
Non-GAAP net adjusted EBITDA$ 57,000$ 60,000
===== =========== ======
Transaction expenses1,0001,000
------------
Non-GAAP net adjusted EBITDA, excluding$ 58,000$ 61,000
transaction expenses
===== =========== ======
SOURCE: Monotype Imaging Holdings Inc.
Investor Relations Contact:
ICR
Staci Mortenson, 781-970-6120
ir@monotypeimaging.com
Copyright Business Wire 2012 |
