Business News

Monotype Imaging Announces Third Quarter 2010 Results

Tuesday 02. November 2010 - Company Reports 23 Percent Revenue Growth and Record Net Adjusted EBITDA

Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading global provider of text imaging solutions, today announced financial results for the third quarter ended Sept. 30, 2010.

Third quarter 2010 highlights:

Third quarter revenue was $28.4 million, a 23 percent increase year-over-year.
Operating income for the third quarter was $9.7 million, a 49 percent increase over the prior year.
Non-GAAP net adjusted EBITDA for the third quarter was $13.4 million, or 47 percent of revenue.
Cash flow from operations for the nine months ended Sept. 30, 2010 was $35.7 million, a 60 percent increase over the prior year period.


“Monotype Imaging had a very strong quarter resulting in double digit year-over-year growth in revenue, operating income, net Adjusted EBITDA and earnings per share,” said Doug Shaw, president and chief executive officer. “We achieved record OEM revenue and our best Creative Professional quarter in nearly two years.”

Scott Landers, senior vice president and chief financial officer, said, “The fundamentals of our business continue to strengthen, and we once again drove significant levels of profitability and operating cash flow. For the full year 2010, we expect to return to double digit revenue growth.”

Third quarter 2010 operating results

Revenue for the third quarter of 2010 was $28.4 million, up 23 percent compared to $23.0 million in the third quarter of 2009. OEM revenue for the quarter was $21.5 million, increasing 32 percent year-over-year. Creative Professional revenue for the quarter was $6.9 million, increasing three percent from the third quarter of 2009.

Net income for the third quarter of 2010 was $5.9 million, compared to $3.0 million in the prior year period. Earnings per diluted share for the third quarter of 2010 were $0.16, compared to $0.08 for the third quarter of 2009.

In the third quarter of 2010, non-GAAP net adjusted EBITDA was $13.4 million or 47 percent of revenue, compared to $10.2 million or 44 percent of revenue in the third quarter of the prior year.

A reconciliation of GAAP operating income to non-GAAP net adjusted EBITDA for the three and nine months ended Sept. 30, 2010 and 2009 is provided in the financial tables that accompany this release.

Cash, cash flow and debt balances

Monotype Imaging had cash and cash equivalents of $54.6 million as of Sept. 30, 2010, an increase from $44.7 million at the end of the prior quarter and an increase from $34.6 million as of Dec. 31, 2009. During the third quarter of 2010, Monotype Imaging generated $13.8 million in cash flow from operations and $35.7 million year-to-date. The company’s outstanding debt was $78.5 million as of Sept. 30, 2010, a decrease from $81.2 million at the end of the prior quarter and a decrease from $91.4 million on Dec. 31, 2009.

Financial outlook

For the fourth quarter of 2010, Monotype Imaging expects revenue in the range of $27.5 million to $29.0 million. The company anticipates fourth quarter 2010 non-GAAP net adjusted EBITDA in the range of $12.5 million to $13.5 million and earnings per share in the range of $0.12 to $0.14.

For the full year 2010, Monotype Imaging expects revenue in the range of $104.8 million to $106.3 million. The company expects full year 2010 non-GAAP net adjusted EBITDA in the range of $46.5 million to $47.5 million and earnings per share in the range of $0.46 to $0.48.