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Monotype Imaging Holdings: Monotype Announces Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

Company Reports Record Revenue, Driven by Creative Professional

WOBURN, Mass.--(BUSINESS WIRE)--October 30, 2015--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 third quarter ended Sept. 30, 2015.

Third quarter 2015 highlights

Revenue for the quarter was $49.4 million, up five percent year over year.

Operating income was $11.3 million, or 23 percent of revenue.

Non-GAAP net adjusted EBITDA was $17.7 million, or 36 percent of revenue.

Cash flow from operations was $15.9 million.

“Monotype had a solid third quarter, meeting the high end of our guidance range, driven by the growth in our Creative Professional business – as we continue to see brands turn to Monotype to help expand their presence and ensure consistency across new content platforms like mobile, social and apps,” said Doug Shaw, president and chief executive officer at Monotype. “We’re also encouraged by the growing interest in Swyft Media’s offerings. Branded content like emoji, stickers, photo overlays and frames are becoming a more integrated part of advertising campaigns targeted at millennials and young consumers.”

Scott Landers, chief operating officer at Monotype, said, “Monotype continues to evolve in new ways that we believe will provide sustainable, long-term growth for our Creative Professional business. The expanding mobile and social media ecosystems, and the growing trend of brands and consumers moving toward more personalized communication, open up new opportunities for us to empower expression and engagement in the connected world.”

Third quarter 2015 operating results

Revenue for the quarter was $49.4 million, up five percent compared to $47.1 million for the third quarter of 2014. Creative Professional revenue was $22.5 million, an increase of 12 percent from the same period in 2014. OEM revenue was $26.9 million, flat compared to the third quarter of 2014.

Net income was $8.0 million, compared to $7.0 million in the third quarter of 2014. Earnings per diluted share were $0.20, compared to $0.17 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 $12.1 million, compared to $10.5 million in the third quarter of 2014. Non-GAAP earnings per diluted share were $0.31 compared to $0.27 in the same period in 2014.

Non-GAAP net adjusted EBITDA was $17.7 million, or 36 percent of revenue, compared to $18.0 million in the third quarter of 2014.

A reconciliation of GAAP measures to non-GAAP measures for the three and nine months ended Sept. 30, 2015 and 2014 is provided in the financial tables that accompany this release.

Cash and cash flow

Monotype had cash and cash equivalents of $86.3 million as of Sept. 30, 2015, compared to $74.6 million as of June 30, 2015, and $82.6 million as of Sept. 30, 2014. The company generated $15.9 million of cash from operations in the third quarter of 2015.

Quarterly dividend

Monotype’s most recent dividend payment of $0.10 per share was paid on Oct. 21, 2015, to shareholders of record on Oct. 1, 2015. The next dividend payment of $0.10 per share will be paid on Jan. 22, 2016, to shareholders of record as of Jan. 4, 2016.

Financial outlook

For the fourth quarter, Monotype expects revenue in the range of $48.0 million to $50.5 million. The company anticipates fourth quarter 2015 non-GAAP net adjusted EBITDA in the range of $19.5 million to $22.0 million, GAAP earnings per diluted share in the range of $0.20 to $0.24, and non-GAAP earnings per diluted share in the range of $0.29 to $0.33.

For the full year 2015, Monotype expects revenue in the range of $189.8 million to $192.3 million. The company anticipates full year 2015 non-GAAP net adjusted EBITDA in the range of $69.7 million to $72.2 million, GAAP earnings per diluted share in the range of $0.74 to $0.78 and non-GAAP earnings per diluted share in the range of $1.10 to $1.14. The company’s earnings per diluted share range is slightly higher than Monotype’s previously issued guidance due to a lower than expected tax rate.

Conference call details

Monotype will host a conference call on Friday, Oct. 30, 2015, at 8:30 a.m. EDT to discuss the company’s third 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 “Company” 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...


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