Monotype Announces Fourth Quarter and Full-Year 2018 Results

Press Release

Press Release

Company Posts Record Performance, and Exceeds Revenue and Profitability Expectations

 

WOBURN, Mass.—(BUSINESS WIRE)— Monotype Imaging Holdings Inc. (Nasdaq: TYPE) today announced financial results for the fourth quarter and full year ended December 31, 2018.

Fourth quarter 2018 highlights

  • Revenue for the quarter was $71.4 million, an increase of 10% year over year.
  • Creative Professional revenue was $49.6 million, up 29% year over year.
  • Net income was $9.5 million; Non-GAAP net adjusted EBITDA was $26.8 million, a 44% increase year over year, or 37.5% of revenue.

Full-year 2018 highlights

  • Revenue for the year was $246.7 million, an increase of 5% year over year.
  • Creative Professional revenue was $159.1 million, up 22% year over year.
  • Net income was $12.3 million; Non-GAAP net adjusted EBITDA was $73.4 million, a 31% increase year over year, or 29.7% of revenue.
  • Cash and cash equivalents stood at $60.1 million.

“We ended the year with a very strong fourth quarter, capping off the most successful year in company history,” said Scott Landers, president and CEO of Monotype. “The investments we’ve made in our enterprise sales, design, marketing and engineering capabilities have had a positive effect on our top and bottom line results. Our efforts continue to translate into tangible customer value. Our ability to execute over the past few years has enabled us to transform our business from one serving mainly mature markets to now one solidly rooted in growing markets.”

Tony Callini, executive vice president and chief financial officer of Monotype, said, “We are very pleased with our performance in 2018. We exceeded the high end of our guidance for net adjusted EBITDA, as well as the previous high-water mark from 2014, reflecting improved operational leverage across the portfolio. We will continue to operate with a focus on enhancing profitability while growing revenue and returning value to shareholders.”

Fourth quarter 2018 operating results 
Revenue for the quarter increased 10% to $71.4 million, compared to $65.0 million for the fourth quarter of 2017. Creative Professional revenue was $49.6 million, a 29% increase from the fourth quarter of 2017. OEM revenue was $21.8 million, a decrease of 18% from the same period in 2017, as expected.

Gross margin for the quarter was 85.1% compared to 83.1% in the prior year quarter.

Net income was $9.5 million, compared to net income of $11.9 million in the fourth quarter of 2017. Earnings per diluted share was $0.23, compared to earnings per diluted share of $0.28 in the prior year.

Non-GAAP net income, which excludes the amortization of intangible assets, stock-based compensation expense, acquisition-related compensation expense, and non-recurring expenses, net of taxes, was $18.2 million, compared to $20.3 million in the fourth quarter of 2017. Non-GAAP earnings per diluted share were $0.45 in the fourth quarter of 2018, compared to $0.51 in the prior year period.

Non-GAAP net adjusted EBITDA was $26.8 million, or 37.5% of revenue, compared to $18.6 million in the fourth quarter of 2017. In the first quarter of 2018, Monotype updated its definition of non-GAAP net adjusted EBITDA to include the add back of non-recurring expense to GAAP income (loss) from operations. Accordingly, all non-GAAP financial measures have been recast for the three months and year ended December 31, 2017, to add back certain advisor fees and restructuring expenses included in non-recurring expenses.

Full-year 2018 operating results 
Revenue for the year was $246.7 million, an increase of 5% compared to $235.8 million for 2017. Creative Professional revenue was $159.1 million, an increase of 22% year over year. OEM revenue was $87.6 million, down 17% year over year, as expected.

Net income for 2018 was $12.3 million, compared to net income of $11.6 million for the prior year. Earnings per diluted share were $0.29, compared to earnings per diluted share of $0.27 in 2017.

Non-GAAP net income, which excludes the amortization of intangible assets, stock based compensation expense, and acquisition-related compensation expense, net of taxes, was $47.3 million, compared to $37.9 million in 2017. Non-GAAP earnings per diluted share were $1.17, compared to $0.95 in 2017.

The company’s 2018 effective tax rate was approximately 43%.

Non-GAAP net adjusted EBITDA was $73.4 million, or 29.7% of revenue, compared to non-GAAP net adjusted EBITDA of $55.8 million in 2017.

A reconciliation of GAAP measures to non-GAAP measures for the three months and years ended December 31, 2018 and 2017 is provided in the financial tables that accompany this release.

Cash and cash flow 
Monotype had cash and cash equivalents of $60.1 million as of December 31, 2018, compared to $70.1 million as of September 30, 2018 and $82.8 million as of December 31, 2017. The company generated $11.4 million of cash from operations in the fourth quarter of 2018, consistent with the same period last year. During the fourth quarter of 2018, the company repaid $5.0 million on its outstanding revolving line of credit.

In the fourth quarter of 2018, Monotype repurchased approximately 560,000 shares of common stock on the open market at prevailing market prices, for a total consideration of $10.7 million. For the full year, Monotype repurchased approximately 890,000 shares of common stock on the open market at prevailing market prices for a cumulative consideration of $17.3 million.

Quarterly dividend 
Monotype’s most recent dividend payment of $0.116 per share was paid on January 22, 2019, to shareholders of record as of the close of business on January 2, 2019. A dividend of $0.116 cents per share will be paid on April 18, 2019, to shareholders of record as of the close of business on April 1, 2019.

Financial outlook 
Monotype’s first quarter and full-year 2019 financial guidance are set forth in the following tables:

         
(in $ millions, except for per share data)   Q1 2019   Full-Year 2019
Revenue   $55.5 – $59.5   $247.0 – $257.0
Non-GAAP net adjusted EBITDA  

$12.5 – $15.5

  $71.5 – $78.5
Operating expenses   $39.0 – $41.0   $158.0 – $161.0
GAAP earnings per diluted share  

$0.07 – $0.13

  $0.72 – $0.84
Non-GAAP earnings per diluted share  

$0.19 – $0.25

  $1.18 – $1.30
         

Conference call details 
Monotype will host a conference call on Friday, February 15, 2019, at 8:30 a.m. EST to discuss the company’s fourth quarter and full-year 2018 results and business outlook for 2019. Individuals who are interested in listening to the audio webcast should log on to the Investors portion of the Company section of the Monotype website at www.monotype.com. The live call can also be accessed by dialing (855) 312-5713 (domestic) or (703) 925-2611 (international) using passcode 8298138. 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 accordance with GAAP and by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures in the tables attached to this press release.

Forward-Looking Statements 
This release may contain forward-looking statements including those related to future revenues and operating results; the growth of the company’s business; anticipated savings, costs and expenses resulting from the company’s restructuring actions and changes to the company’s product portfolio; the impact of the company’s revenue recognition policy; the impact of federal tax reform legislation; the execution of the company’s capital allocation and funding strategies; and anticipated business momentum that involve risks and uncertainties that could cause the company’s actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to risks associated with changes in the economic climate including decreased demand for the company’s products or products that incorporate the company’s solutions; risks associated with the company’s ability to adapt products or services to new markets and to anticipate and quickly respond to evolving technologies and customer requirements; risks associated with the company’s development of and the market acceptance of new products, product features or services; risks associated with the anticipated cost savings and expenses from the company’s restructuring actions and wind down of certain of the company’s products including that such savings and expenses are not as predicted; risks associated with increased competition in markets the company serves, including the risks that increased competition may result in the company’s inability to gain new customers, retain existing customers or may force the company to reduce prices; risks associated with the ownership and enforcement of the company’s intellectual property; and risks associated with geopolitical conditions and changes in the financial markets. Additional disclosure regarding these and other risks faced by the company is available in the company’s public filings with the Securities and Exchange Commission, including the risk factors included in the company’s Annual Report on Form 10-K for the year ended December 31, 2017 and subsequent filings. The forward-looking financial information set forth in this release reflects estimates based on information available at this time. These amounts could differ from actual reported amounts to be included in the company’s future earnings releases and public filings. While the company may elect to update forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so, even if an estimate changes.

About Monotype 
Monotype empowers creative minds to build and express authentic brands through design, technology and expertise. Further information is available at www.monotype.com. Follow Monotype on Twitter, Instagram and LinkedIn.

Monotype is a trademark of Monotype Imaging Inc. registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. ©2019 Monotype Imaging Holdings Inc. All rights reserved.

 

MONOTYPE IMAGING HOLDINGS INC. 
CONSOLIDATED BALANCE SHEETS 
(Unaudited and in thousands)

     
    December 31,
    2018   2017
ASSETS        
Current assets:        
Cash and cash equivalents   $ 60,106     $ 82,822  
Restricted cash     6,000       11,987  
Accounts receivable, net of allowance for doubtful accounts     55,943       34,461  
Income tax refunds receivable     5,122       1,204  
Prepaid expenses and other current assets     6,473       5,714  
Total current assets     133,644       136,188  
Property and equipment, net     14,105       16,763  
Goodwill     276,222       279,131  
Intangible assets, net     74,699       84,856  
Restricted cash           6,000  
Other assets     8,986       3,112  
Total assets   $ 507,656     $ 526,050  
         
LIABILITIES AND STOCKHOLDERSEQUITY        
Current liabilities:        
Accounts payable   $ 1,719     $ 1,467  
Accrued expenses and other current liabilities     43,840       43,096  
Accrued income taxes payable     510       522  
Deferred revenue     10,337       15,102  
Total current liabilities     56,406       60,187  
Revolving line of credit     75,000       93,000  
Other long-term liabilities     3,102       6,428  
Deferred income taxes     35,083       28,004  
Reserve for income taxes     2,471       2,783  
Accrued pension benefits     5,888       6,280  
Stockholders’ equity:        
Common stock     46       44  
Additional paid-in capital     319,486       298,113  
Treasury stock, at cost     (83,518 )     (64,083 )
Retained earnings     99,605       97,815  
Accumulated other comprehensive loss     (5,913 )     (2,521 )
Total stockholders’ equity     329,706       329,368  
Total liabilities and stockholders’ equity   $ 507,656     $ 526,050  
                 

 

 

MONOTYPE IMAGING HOLDINGS INC. 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME 
(Unaudited and in thousands, except share and per share data)

 
    Three Months Ended 
December 31,
  Year Ended 
December 31,
    2018   2017   2018   2017
Revenue   $ 71,398     $ 65,016     $ 246,737     $ 235,789  
Costs and expenses:                
Cost of revenue     9,758       10,123       41,545       38,761  
Cost of revenue—amortization of acquired technology     858       885       3,441       3,529  
Total cost of revenue     10,616       11,008       44,986       42,290  
Gross profit     60,782       54,008       201,751       193,499  
Operating expenses:                
Marketing and selling     21,599       23,014       79,981       89,431  
Research and development     7,996       9,271       33,428       37,049  
General and administrative     12,335       12,031       50,597       46,063  
Restructuring     2,755       3,185       9,569       3,185  
Amortization of other intangible assets     847       1,016       3,687       4,067  
Total operating expenses     45,532       48,517       177,262       179,795  
Income from operations     15,250       5,491       24,489       13,704  
Other (income) expense:                
Interest expense, net     768       666       3,121       2,722  
Other (income) expense, net     (100 )     (45 )     (274 )     4,813  
Total other expense     668       621       2,847       7,535  
Income before income taxes     14,582       4,870       21,642       6,169  
Provison for (benefit from) income taxes     5,126       (7,000 )     9,369       (5,391 )
Net income   $ 9,456     $ 11,870     $ 12,273     $ 11,560  
Net income available to common shareholders—basic   $ 9,151     $ 11,304     $ 11,527     $ 10,615  
Net income available to common shareholders—diluted   $ 9,151     $ 11,306     $ 11,527     $ 10,615  
Net income per common share:                
Basic   $ 0.23     $ 0.28     $ 0.29     $ 0.27  

Diluted

  $ 0.23     $ 0.28     $ 0.29     $ 0.27  
Weighted-average number of shares:                
Basic     40,110,039       39,746,203       40,262,717       39,619,133  
Diluted     40,185,709       39,988,868       40,386,896       39,858,248  
Dividends declared per common share   $ 0.116     $ 0.113     $ 0.464     $ 0.449  
 

 

 

MONOTYPE IMAGING HOLDINGS INC. 
OTHER INFORMATION 
(Unaudited and in thousands) 

RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET ADJUSTED EBITDA

 
    Three Months Ended 
December 31,
  Year Ended 
December 31,
    2018  

2017 (1)

  2018  

2017 (1)

GAAP net income   $ 9,456     $ 11,870     $ 12,273     $ 11,560  
Interest expense, net     768       666       3,121       2,722  
Other (income) expense, net     (100 )     (45 )     (274 )     4,813  

Provision for (benefit from) income taxes

    5,126       (7,000 )     9,369       (5,391 )
Income from operations     15,250       5,491       24,489       13,704  
Depreciation and amortization     3,195       3,126       12,743       12,397  
Stock based compensation(2)     5,174       4,826       18,336       20,120  
Acquisition-related compensation(3)     389       1,518       3,323       5,739  
Non-recurring expenses(4)     2,755       3,675       14,489       3,885  
Net adjusted EBITDA   $ 26,763     $ 18,636     $ 73,380     $ 55,845  
                                 

(1) Net adjusted EBITDA has been recast for the three months and year ended December 31, 2017 to conform to the current definition by adding back certain advisor fees and restructuring expenses included in non-recurring expenses.

(2) For the three months ended December 31, 2018, the amount excludes a $0.9 million non-recurring increase for acceleration of awards by employees included in the restructuring plan. For the year ended December 31, 2018, the amount excludes a $0.9 million non-recurring increase for acceleration and a $1.4 million non-recurring reduction for forfeiture of awards by employees included in the restructuring plan. These amounts are included in non-recurring expenses.

(3) For the three months ended December 31, 2018 and 2017, the amount includes $0.4 million and $0.9 million, respectively, of expense associated with the deferred compensation arrangements with the founders of Olapic in connection with the acquisition and $0 and $0.6 million, respectively, of expense associated with the deferred compensation arrangements resulting from an amendment to the Swyft Merger Agreement. For the years ended December 31, 2018 and 2017, the amount includes $2.8 million and $3.5 million, respectively, of expense associated with the deferred compensation arrangements with the founders of Olapic in connection with the acquisition and $0.5 million and $2.2 million, respectively, of expense associated with the deferred compensation arrangements resulting from an amendment to the Swyft Merger Agreement.

(4) For the three months ended December 31, 2018, the amount includes $2.8 million of restructuring expenses. For the three months ended December 31, 2017, the amount includes $0.5 million of certain advisor fees related to shareholder activities and $3.2 million of restructuring expenses. For the year ended December 31, 2018, the amount includes $2.7 million of certain advisor fees related to shareholder activities, $2.2 million of royalty expenses, recorded in cost of sales, associated with revenue that was not recognized under ASC 606 and $9.6 million of restructuring expenses. For the year ended December 31, 2017, the amount includes $0.7 million of certain advisor fees related to shareholder activities and $3.2 million of restructuring expenses.

                 

MONOTYPE IMAGING HOLDINGS INC. 
OTHER INFORMATION 
(Unaudited and in thousands, except share and per share amounts) 
NET INCOME TO NON-GAAP NET INCOME

 
    Three Months Ended
December 31,
  Year Ended 
December 31,
    2018  

2017 (1)

  2018  

2017 (1)

GAAP net income available to common stockholders—diluted   $ 9,456   $ 11,870   $ 11,527   $ 10,615
Amortization, net of tax of $384, $701, $1,647 and $2,803, respectively   1,321   1,200   5,481   4,793
Stock based compensation, net of tax of $543, $1,400, $2,769 and $5,837, respectively(2)   4,630   3,426   15,567   14,283
Acquisition-related compensation, net of tax of $0, $0, $0 and $0, respectively(3)   389   1,518   3,323   5,739
Non-recurring expenses, net of tax of $303, $1,356, $3,043 and $1,434, respectively(4)   2,452   2,319   11,446   2,451
Non-GAAP net income   $ 18,248   $ 20,333   $ 47,344   $ 37,881
                 

(1) Non-GAAP net income has been recast for the three months and year ended December 31, 2017 to conform to the current definition by adding back certain advisor fees and restructuring expenses included in non-recurring expenses.

(2) For the three months ended December 31, 2018, the amount excludes a $0.8 million, net of tax, non-recurring increase for acceleration of awards by employees included in the restructuring plan. For the year ended December 31, 2018, the amount excludes a $0.7 million, net of tax, non-recurring increase for acceleration and a $1.2 million, net of tax, non-recurring reduction for forfeiture of awards by employees included in the restructuring plan. These amounts are included in non-recurring expenses.

(3) For the three months ended December 31, 2018 and 2017, the amount includes $0.4 million and $0.9 million, respectively, of expense associated with the deferred compensation arrangements with the founders of Olapic in connection with the acquisition and $0 and $0.6 million, respectively, of expense associated with the deferred compensation arrangements resulting from an amendment to the Swyft Merger Agreement. For the years ended December 31, 2018 and 2017, the amount includes $2.8 million and $3.5 million, respectively, of expense associated with the deferred compensation arrangements with the founders of Olapic in connection with the acquisition and $0.5 million and $2.2 million, respectively, of expense associated with the deferred compensation arrangements resulting from an amendment to the Swyft Merger Agreement.

(4) For the three months ended December 31, 2018, the amount includes $2.5 million, net of tax, of restructuring expenses. For the three months ended December 31, 2017, the amount includes $0.3 million, net of tax, of certain advisor fees related to shareholder activities and $2.0 million, net of tax, of restructuring expenses. For the year ended December 31, 2018, the amount includes $2.2 million, net of tax, of certain advisor fees related to shareholder activities, $1.7 million, net of tax, of royalty expenses, recorded in cost of sales, associated with revenue that was not recognized under ASC 606 and $7.5 million, net of tax, of restructuring expenses. For the year ended December 31, 2017, the amount includes $0.5 million, net of tax, of certain advisor fees related to shareholder activities and $2.0 million, net of tax, of restructuring expenses.

         

MONOTYPE IMAGING HOLDINGS INC. 
OTHER INFORMATION 
(Unaudited and in thousands, except share and per share amounts) 
RECONCILIATION OF GAAP EARNINGS PER DILUTED SHARE TO NON-GAAP EARNINGS PER DILUTED SHARE

         
    Three Months Ended 
December 31,
  Year Ended 
December 31,
    2018  

2017 (1)

  2018  

2017 (1)

GAAP net income per diluted share   $ 0.23   $ 0.28     $ 0.29   $ 0.27  
Amortization, net of tax of $0.01, $0.02, $0.04 and $0.07, respectively     0.03     0.03       0.13     0.12  
Stock based compensation, net of tax of $0.01, $0.04, $0.07 and $0.15, respectively(2)     0.12     0.10       0.39     0.36  
Acquisition-related compensation, net of tax of $0, $0, $0 and $0, respectively(3)     0.01     0.04       0.08     0.14  
Non-recurring expenses, net of tax of $0.01, $0.03, $0.08 and $0.04, respectively(4)     0.06     0.06       0.28     0.06  
Non-GAAP earnings per diluted share   $ 0.45   $ 0.51     $ 1.17   $ 0.95  
                 

(1) Non-GAAP net income has been recast for the three months and year ended December 31, 2017 to conform to the current definition by adding back certain advisor fees and restructuring expenses included in non-recurring expenses.

(2) For the three months ended December 31, 2018, the amount excludes a $0.8 million, or $0.02 per share, net of tax, non-recurring increase for acceleration of awards by employees included in the restructuring plan. For the year ended December 31, 2018, the amount excludes a $0.7 million, or $0.02 per share, net of tax, non-recurring increase for acceleration and a $1.2 million, or $0.03 per share, net of tax, non-recurring reduction for forfeiture of awards by employees included in the restructuring plan. These amounts are included in non-recurring expenses.

(3) For the three months ended December 31, 2018 and 2017, the amount includes $0.4 million, or $0.01 per share and $0.9 million, or $0.02 per share, respectively, of expense associated with the deferred compensation arrangements with the founders of Olapic in connection with the acquisition and $0, or $0.00 per share, and $0.6 million, or $0.02 per share, respectively, of expense associated with the deferred compensation arrangements resulting from an amendment to the Swyft Merger Agreement. For the years ended December 31, 2018 and 2017, the amount includes $2.8 million, or $0.07 per share and $3.5 million, or $0.09 per share, respectively, of expense associated with the deferred compensation arrangements with the founders of Olapic in connection with the acquisition and $0.5 million, or $0.01 per share and $2.2 million, or $0.05 per share, respectively, of expense associated with the deferred compensation arrangements resulting from an amendment to the Swyft Merger Agreement.

(4) For the three months ended December 31, 2018, the amount includes $2.5 million, or $0.06 per share, net of tax, of restructuring expenses. For the three months ended December 31, 2017, the amount includes $0.3 million, or $0.01 per share, net of tax, of certain advisor fees related to shareholder activities and $2.0 million, or $0.05 per share, net of tax, of restructuring expenses. For the year ended December 31, 2018, the amount includes $2.2 million, or $0.05 per share, net of tax, of certain advisor fees related to shareholder activities, $1.7 million, or $0.04 per share, net of tax, of royalty expenses, recorded in cost of sales, associated with revenue that was not recognized under ASC 606 and $7.5 million, or $0.19 per share, net of tax, of restructuring expenses. For the year ended December 31, 2017, the amount includes $0.5 million, or $0.01 per share, net of tax, of certain advisor fees related to shareholder activities and $2.0 million, or $0.05 per share, net of tax, of restructuring expenses.

 

MONOTYPE IMAGING HOLDINGS INC. 
OTHER INFORMATION 
(Unaudited and in thousands)

 

OTHER INFORMATION 
Stock based compensation is comprised of the following:

 
    Three Months Ended 
December 31,
  Year Ended 
December 31,
    2018  

2017

  2018   2017
Marketing and selling   $ 2,478   $ 2,205   $ 6,993   $ 9,553
Research and development     1,373     1,079     4,154     4,306
General and administrative     2,176     1,542     6,641     6,261
Total expensed   $ 6,027   $ 4,826   $ 17,788   $ 20,120
Property and equipment     3     50     27     147
Total stock based compensation   $ 6,030   $ 4,876   $ 17,815   $ 20,267
                         
 

MARKET INFORMATION 
The following table presents revenue for our two major markets:

 
    Three Months Ended 
December 31,
  Year Ended 
December 31,
    2018   2017   2018   2017
Creative Professional   $ 49,590   $ 38,361   $ 159,119   $ 130,595
OEM     21,808     26,655     87,618     105,194
Total   $ 71,398   $ 65,016   $ 246,737   $ 235,789
                 

 

         

MONOTYPE IMAGING HOLDINGS INC. 
OTHER INFORMATION 
(Unaudited and in thousands, except share and per share data)

RECONCILIATION OF FORECAST GAAP EARNINGS PER DILUTED SHARE TO FORECAST NON-GAAP EARNINGS PER DILUTED SHARE

         
   

Low End of 
Guidance

 

High End of 
Guidance

    Q1 2019   Q1 2019
GAAP net income   $

2,800

  $

5,000

Amortization, net of tax of $400 and $400, respectively

 

   

1,300

   

1,300

Stock based compensation, net of tax of $700 and $700, respectively

   

3,500

   

3,500

Acquisition-related compensation, net of tax of $0 and $0, respectively     200     200
         
Non-GAAP net income   $

7,800

  $

10,000

         
         
GAAP earnings per diluted share   $

0.07

  $

0.13

Amortization, net of tax of $0.01 and $0.01, respectively, per diluted share    

0.03

   

0.03

Stock based compensation, net of tax of $0.02 and $0.02, respectively, per diluted share    

0.09

   

0.09

Acquisition-related compensation, net of tax of $0.00 and $0.00, respectively, per diluted share    

0.00

   

0.00

         
Non-GAAP earnings per diluted share   $

0.19

  $

0.25

         
         
Weighted average diluted shares used to compute earnings per share     40,100,000     40,100,000

Assumes 28% effective tax rate.

   

 

 

Low End of 
Guidance

 

High End of 
Guidance

    2019   2019
GAAP net income   $ 28,700   $ 33,800

Amortization, net of tax of $1,900 and $1,900, respectively

   

4,900

   

4,900

Stock based compensation, net of tax of $2,800 and $2,800, respectively

   

13,200

   

13,200

Acquisition-related compensation, net of tax of $0 and $0, respectively     400     400
         

Non-GAAP net income

    47,200     52,300
         
         
GAAP earnings per diluted share   $ 0.72   $ 0.84
Amortization, net of tax of $0.05 and $0.05, respectively, per diluted share    

0.12

   

0.12

Stock based compensation, net of tax of $0.07 and $0.07, respectively, per diluted share    

0.33

   

0.33

Acquisition-related compensation, net of tax of $0.00 and $0.00, respectively, per diluted share    

0.01

   

0.01

         
Non-GAAP earnings per diluted share   $ 1.18   $ 1.30
         
         
Weighted average diluted shares used to compute earnings per share     40,100,000     40,100,000

Assumes 28% effective tax rate.

           
             

 

         

MONOTYPE IMAGING HOLDINGS INC. 
RECONCILIATION OF FORECAST GAAP NET INCOME 
TO FORECAST NON-GAAP NET ADJUSTED EBITDA 
(Unaudited and in thousands)

         
   

Low End of 
Guidance

 

High End of 
Guidance

    Q1 2019   Q1 2019
GAAP net income   $

2,800

  $

5,000

Interest, net     900     900
Other (income) expense, net    

   

Provision for income taxes     1,300     2,100
         
Income from operations    

5,000

   

8,000

Depreciation and amortization     3,100     3,100
Stock based compensation     4,200     4,200
Acquisition-related compensation     200     200
         
Non-GAAP net adjusted EBITDA   $

12,500

  $

15,500

         
         
   

Low End of 
Guidance

 

High End of 
Guidance

    2019   2019
GAAP net income   $ 28,700   $ 33,800
Interest, net     3,300     3,300
Other (income) expense, net    

   

Provision for income taxes     11,200     13,100
         
Income from operations     43,200     50,200
Depreciation and amortization     11,900     11,900
Stock based compensation     16,000     16,000
Acquisition-related compensation     400     400
         
Non-GAAP net adjusted EBITDA   $ 71,500   $ 78,500

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20190215005092/en/

Investor Relations:
Chris Brooks
Monotype
[email protected]

 

Source: Monotype Imaging Holdings Inc.