Business News
Monotype Imaging Announces First Quarter 2008 Results
Tuesday 13. May 2008 - Company continues to execute growth strategy
Monotype Imaging Holdings Inc. (Nasdaq: TYPE) today announced financial results for the first quarter of 2008, which ended March 31, 2008.
“We are pleased with our achievements in the first quarter of 2008,” said Doug Shaw, president and chief executive officer. “We drove key operational initiatives, met our financial goals and continued to execute our growth strategy. We added a number of key new accounts and continued to grow both our OEM and Creative Professional businesses. We remain confident that we will achieve our objectives for 2008.”
First quarter 2008 results
Revenue for the first quarter of 2008 was $27.3 million, up six percent over revenue of $25.7 million in the first quarter of 2007. Net income for the quarter was $3.7 million, compared to net income of $1.6 million for the same period last year. Earnings per diluted share were $0.10 in the first quarter of this year compared to a loss per diluted share of $4.35 in the first quarter of 2007. The first quarter of 2007 included a $13.7 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 first quarter of 2008, non-GAAP adjusted EBITDA was $13.0 million. This compared to non-GAAP adjusted EBITDA of $11.6 million in the first quarter of last year. A reconciliation of GAAP net income to non-GAAP adjusted EBITDA is provided in the financial tables that accompany this release. Net income and non-GAAP adjusted EBITDA in the first quarter of 2008 included an after-tax gain of $1.3 million or $0.04 per diluted share, associated with foreign currency exchange gains. This was partially offset by costs of approximately $0.5 million, or $0.01 per diluted share, related to increased legal and accounting expenses associated with preparation for an offering of our securities. These costs are permanent non-deductible costs for tax purposes.
At the end of the first quarter of 2008, Monotype Imaging had cash balances of $27.8 million and outstanding debt of $128.1 million. This compares to cash balances of $19.6 million and outstanding debt of $131.4 million as of December 31, 2007.
Financial outlook
Monotype Imaging continues to expect full year revenue for 2008 in the range of $112 million to $116 million. The company also continues to expect full year 2008 non-GAAP adjusted EBITDA in the range of $49 million to $52 million. The company expects to report diluted earnings per share in the range of $0.38 to $0.43 for the full year. This estimate reflects the foreign exchange gain and legal and accounting expenses described above, as well as a higher than anticipated effective tax rate.
First quarter highlights
During the first quarter, Monotype Imaging continued to execute its strategy to drive growth by enhancing core products and expanding market availability of the company’s fonts and font technologies. Key font rendering and multilingual text layout technologies were updated, and new multilingual fonts were released, aimed at improving font choice for OEMs and helping to ease entry into international or emerging markets. The company also introduced a plug-in solution for open source Linux(R) development environments. Based on Monotype Imaging’s iType(R) font engine, the iType Connects(TM) plug-in for Linux is designed to help speed time to market for products that display scalable, stylistic and multilingual text.
The first quarter of 2008 also marked the announcement that Verizon Wireless has begun to supply handset manufacturers with an eight-font, scalable typeface family from Monotype Imaging. Optimized for legibility, the fonts are employed by handset manufacturers to build user interfaces for Verizon Wireless phones.
More recently, Monotype Imaging announced that OpenTV has licensed the iType Connects plug-in along with fonts and multilingual technology for the OpenTV(R) Core2(TM) set-top box middleware solution, and Garmin has licensed the iType font engine for a range of Garmin(R) nuvi(R) automotive navigation devices.
“These achievements demonstrate our commitment to bring forward text solutions for worldwide markets,” Shaw said. “As we expand into various market segments, a key objective is to enable OEMs and developers to exploit the benefits of scalable fonts and font technologies through a broad range of industry development platforms. In addition, our relationships with Verizon Wireless, OpenTV and Garmin underscore the important role of scalable fonts, not only to achieve superior text quality, but also to reduce development time and the memory footprint of the device.”