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 second quarter ended June 30, 2015.
Second quarter 2015 highlights
- Revenue for the quarter was $46.4 million.
- Operating income was $10.1 million, or 22 percent of revenue.
- Non-GAAP net adjusted EBITDA was $16.4 million, or 35 percent of revenue.
- Cash flow from operations was $13.4 million.
“Double-digit revenue growth in our Creative Professional business drove our solid, second-quarter results. Our focus across the company is to help more customers take advantage of the growth of content-driven opportunities,” said Doug Shaw, president and chief executive officer. “We’re encouraged by our progress with Swyft Media in emerging, content-centric categories, like in-app, branded emoji and mobile content. We’re also bringing new value to creators of HTML5-based marketing campaigns through our Web Font Platform, which aims to improve the creative workflow process.”
Scott Landers, chief operating officer and chief financial officer, said, “We remain confident in the strength of our business and profit models, as we look to capitalize on our recent investments. For the second half of the year, we expect net adjusted EBITDA margins to trend higher toward more traditional levels, as we anticipate revenue to improve.”
Second quarter 2015 operating results
Revenue for the quarter was $46.4 million, up three percent compared to $45.0 million for the second quarter of 2014. Creative Professional revenue was $20.7 million, an increase of 13 percent from the same period in 2014. OEM revenue was $25.7 million, a four percent decline from the second quarter of 2014.
Net income was $5.9 million, compared to $7.7 million in the second quarter of 2014. Earnings per diluted share were $0.15, compared to $0.19 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 $9.3 million, compared to $10.9 million in the second quarter of 2014. Non-GAAP earnings per diluted share were $0.24 compared to $0.27 in the same period in 2014.
Non-GAAP net adjusted EBITDA was $16.4 million, or 35 percent of revenue, compared to $18.5 million in the second quarter of 2014.
A reconciliation of GAAP measures to non-GAAP measures for the three and six months ended June 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 $74.6 million as of June 30, 2015, compared to $78.8 million as of March 31, 2015, and $80.8 million as of June 30, 2014. The company generated $13.4 million of cash from operations in the second quarter of 2015.
Quarterly dividend and share repurchase program
Monotype’s most recent dividend payment of $0.10 per share was paid on July 21, 2015, to shareholders of record on July 1, 2015. The next dividend payment of $0.10 per share will be paid on Oct. 21, 2015, to shareholders of record as of Oct. 1, 2015.
During the second quarter of 2015, Monotype repurchased approximately 457,100 shares of common stock under the company’s repurchase program for an aggregate amount of approximately $12.5 million. Monotype today announced that it has completed its share repurchase program, approved in October, 2013. Since the program’s inception, Monotype repurchased 1.8 million of its shares, bought at prevailing market prices, which corresponds to a total repurchase value of approximately $50 million.
Financial outlook
For the third quarter, Monotype expects revenue in the range of $46.5 million to $49.5 million. The company anticipates third quarter 2015 non-GAAP net adjusted EBITDA in the range of $15.5 million to $18.0 million, GAAP earnings per diluted share in the range of $0.13 to $0.17, and non-GAAP earnings per diluted share in the range of $0.22 to $0.26.
For the full year 2015, Monotype continues to expect revenue in the range of $188.0 million to $194.0 million and non-GAAP net adjusted EBITDA in the range of $69.0 million to $73.0 million. The company expects full year GAAP earnings per diluted share in the range of $0.70 to $0.76 and non-GAAP earnings per diluted share in the range of $1.05 to $1.11.
