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Monotype Announces First Quarter 2016 Results

WOBURN, Mass., Apr 29, 2016 (BUSINESS WIRE) -- Monotype Imaging Holdings Inc. TYPE, -1.81% 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, 2016.

First quarter 2016 highlights

  • Revenue for the quarter was $49.8 million, an increase of 8 percent, year over year.
  • Creative Professional revenue was $23.9 million, up 17 percent.
  • Non-GAAP net adjusted EBITDA was $16.6 million, or 33 percent of revenue.
  • Cash and cash equivalents stood at $95.4 million.

“Monotype had a solid first quarter, driven by a strong performance from our Creative Professional business,” said Scott Landers, president and chief executive officer of Monotype. “Brands continue to turn to Monotype for solutions that help them reach customers across the ever-expanding digital ecosystem. Our ability to satisfy new customer use cases continues to be a growth driver in our Creative Professional business.”

Joe Hill, executive vice president and chief financial officer of Monotype, said, “We have aligned our investments to expand the value we offer to brands, and are seeing that translate into new revenue opportunities within our Creative Professional business, which now represents nearly half of our total revenue. We plan to continue to invest and innovate in areas that both encourage and improve the use of type across a variety of new digital mediums.”

First quarter 2016 operating results

Revenue for the quarter increased eight percent to $49.8 million, compared to $46.0 million for the first quarter of 2015. Creative Professional revenue was $23.9 million, a 17 percent increase from the first quarter of 2015. OEM revenue was $25.9 million, an increase of two percent from the same period in 2015.

Net income was $5.4 million, compared to $7.4 million in the first quarter of 2015. Earnings per diluted share were $0.13, compared to $0.18 in the prior year quarter.

Non-GAAP net income, which excludes the amortization of intangible assets, stock-based compensation expense and acquisition-related contingent consideration expense, net of taxes, was $9.5 million, compared to $10.5 million in the first quarter of 2015. Non-GAAP earnings per diluted share were $0.24 compared to $0.26 in the prior year period.

Non-GAAP net adjusted EBITDA was $16.6 million, or 33 percent of revenue, compared to $16.2 million in the first quarter of 2015.

Cash and cash flow

Monotype had cash and cash equivalents of $95.4 million as of March 31, 2016, compared to $87.5 million as of December 31, 2015 and $78.8 million as of March 31, 2015. The company generated $11.2 million of cash from operations in the first quarter of 2016.

Quarterly dividend

Monotype’s most recent dividend payment of $0.11 per share was paid on April 21, 2016, to shareholders of record as of April 1, 2016. The next dividend payment of $0.11 per share will be paid on July 21, 2016 to shareholders of record as of the close of business on July 1, 2016.

Financial outlook

For the second quarter of 2016, Monotype expects revenue in the range of $47.0 million to $50.0 million. The company anticipates second quarter 2016 non-GAAP net adjusted EBITDA in the range of $15.0 million to $17.5 million, GAAP earnings per diluted share in the range of $0.11 to $0.15 and non-GAAP earnings per diluted share in the range of $0.22 to $0.26.

The company is reiterating its full year 2016 guidance, which expects revenue in the range of $202.0 million to $208.0 million. Monotype expects full year 2016 non-GAAP net adjusted EBITDA in the range of $72.0 million to $77.0 million, GAAP earnings per diluted share in the range of $0.63 to $0.71 and non-GAAP earnings per diluted share in the range of $1.08 to $1.16.

Conference call details

Monotype will host a conference call on Friday, April 29, 2016, at 8:30 a.m. EDT to discuss the company’s first quarter 2016 results. 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 (international) using passcode 91312647. 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...


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