Business News

Monotype Imaging Reports Fourth Quarter and Full Year 2007 Financial Results

Monday 03. March 2008 - Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading global provider of text imaging solutions, today reported financial results for the fourth quarter and year ended December 31, 2007.

Fourth Quarter 2007 Financial Results

In the fourth quarter of 2007, revenue increased eight percent to $27.5 million from $25.4 million in the fourth quarter of 2006. Net income for the quarter increased 53 percent to $4.0 million from $2.6 million in the fourth quarter of 2006. Earnings per diluted share were $0.11 in the fourth quarter of 2007 as compared to a loss per diluted share of $2.77 in the fourth quarter of 2006, after a $9.9 million reduction to net income available to common shareholders for accretion of convertible redeemable preferred stock. All convertible redeemable preferred stock was converted to common and redeemable preferred stock, and the redeemable preferred stock was redeemed in connection with the company’s initial public offering in July 2007. In the fourth quarter of 2007, non-GAAP adjusted EBITDA was $13.5 million. In the fourth quarter of 2006, non-GAAP adjusted EBITDA was $12.4 million. A reconciliation of GAAP net income to non-GAAP adjusted EBITDA is provided in the financial tables that accompany this release.

“In Q4, we achieved the highest level of quarterly revenue in the company’s history,” said Doug Shaw, president and chief executive officer of Monotype Imaging. “We posted eight percent quarter-over-quarter increases in both revenue and non-GAAP adjusted EBITDA, driven by organic growth in our OEM business.”

2007 Financial Results

Revenue for the year ended December 31, 2007 increased 22 percent to $105.2 million from $86.2 million in 2006. 2007 includes a full year of Linotype which was acquired in August 2006. Net income in 2007 increased 28 percent to $9.1 million from $7.1 million in the prior year. Non-GAAP adjusted EBITDA was $47.3 million for 2007 compared to $43.3 million in 2006.

At December 31, 2007, outstanding debt was $131.4 million compared to $202.9 million at December 31, 2006, which was mainly the result of a debt pay off using proceeds from Monotype Imaging’s initial public offering.

“Our 2007 results reflect the continued value our customers recognize in the solutions we provide,” said Shaw. “We achieved a 22 percent year-over-year increase in sales driven by acquisitions and organic growth, and a nine percent increase in non-GAAP adjusted EBITDA. We expanded and enhanced our text imaging solutions for manufacturers of consumer electronics devices, and our Creative Professional business attracted more than 25 million visits from over 200 countries to our e-commerce Web sites in 2007.

“We plan to continue to drive growth by increasing the adoption of our fonts and font technologies in consumer electronics device categories, bringing enhanced solutions to the laser printer market, offering new products to our OEM customers, expanding our global presence and increasing our Web offerings.”

2008 Financial Guidance

Monotype Imaging expects revenue for full year 2008 in the range of $112 million to $116 million. The company expects full year 2008 non-GAAP adjusted EBITDA in the range of $49 million to $52 million and earnings per share in the range of $0.46 to $0.51.