Monotype Imaging Holdings Inc. (TYPE, Financial) filed Quarterly Report for the period ended 2009-06-30.
Monotype Imaging is a global provider of text imaging solutions for manufacturers and developers of consumer electronics devices including laser printers copiers mobile phones digital televisions set-top boxes digital cameras and software applications and operating systems. The company also provides printer drivers and color imaging technologies to OEMs. Monotype Imaging technologies are combined with access to more than nine thousand typefaces from the Monotype Linotype and ITC typeface libraries home to some of the world\'s most widely used designs including the Times New Roman Helvetica and ITC Franklin Gothic typefaces. Fonts are licensed to creative and business professionals through custom font designs direct sales or e-commerce portals. Monotype Imaging offers fonts and industry-standard solutions that support all of the world\'s major languages. Monotype Imaging Holdings Inc. has a market cap of $254 million; its shares were traded at around $7.35 with a P/E ratio of 16.3 and P/S ratio of 2.3.
Creative professional revenue was $5.4 million and $8.6 million for the three months ended June 30, 2009 and 2008, respectively, a decrease of $3.3 million, or 38.0%. Creative professional revenue was down across all channels, specifically in direct, indirect, web and custom, as compared to the same period in 2008. Direct and indirect revenue declined $2.0 million. Web revenue from our corporate and individuals customers and custom font revenue from our corporate customers decreased $1.2 million in the three months ended June 30, 2009, as compared to the same period in 2008. We attribute the declines we have experienced in our creative professional revenue in the three months ended June 30, 2009, as compared to the same period in 2008, to the current economic downturn, as discretionary spending has been reduced by our customers.
Marketing and Selling. Marketing and selling expense was $5.5 million and $6.2 million in the three months ended June 30, 2009 and 2008, respectively, a decrease of $0.7 million, or 10.9% primarily the result of our restructuring plan and reductions in discretionary spending. Decreased personnel costs and a reduction in travel related expenses contributed $0.4 million to the decrease. Part of the reduction in personnel expenses was due to a lower sales volume and earnings, which affects variable compensation, and the remainder was
General and Administrative. General and administrative expense was $3.5 million and $5.4 million in the three months ended June 30, 2009 and 2008, respectively, a decrease of $1.9 million, or 35.6%. In the three months ended June 30, 2008, $0.7 million of costs incurred were associated with the filing of a registration statement with the Securities and Exchange Commission (SEC). There were no similar charges in the same period in 2009. Personnel costs decreased $0.3 million in the three months ended June 30, 2009, as compared to the same period in 2008, the result of a decline in variable compensation and the restructuring plan announced in the fall of 2008. Reductions in legal and professional service expenses contributed $0.6 million to the overall decrease in general and administrative expenses in the three months ended June 30, 2009, as compared to the same period in 2008. A reduction in Sarbanes-Oxley related expense of $0.3 million period-over-period, the result of less reliance on external assistance in this area, contributed to the overall decrease.
Amortization of Other Intangible Assets. Amortization of other intangible assets decreased $0.7 million or 38.3%, to $1.2 million for the three months ended June 30, 2009, as compared to $1.9 million for the three months ended June 30, 2008. Certain non-compete agreements entered into in connection with our acquisition from Agfa Corporation in 2004 became fully amortized during the fourth quarter of 2008, and as a result, we expect quarterly amortization of other intangible assets to remain at approximately $1.2 million going forward.
Interest expense, net of interest income decreased $0.9 million, or 46.6%, to $1.0 million for the three months ended June 30, 2009, as compared to $1.9 million for the three months ended June 30, 2008. The decrease is the result of lower total debt outstanding in the second quarter of 2009 as compared to the same period in 2008, as well as a decreased rate of interest on the outstanding debt. Total debt outstanding, net of unamortized financing costs and debt discounts, at June 30, 2009 was $101.7 million, as compared to $118.5 million at June 30, 2008. At June 30, 2009, the blended interest rate of borrowings under our Amended and Restated Credit Agreement was 3.1%, as compared to a blended rate of 5.2% at June 30, 2008.
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Monotype Imaging is a global provider of text imaging solutions for manufacturers and developers of consumer electronics devices including laser printers copiers mobile phones digital televisions set-top boxes digital cameras and software applications and operating systems. The company also provides printer drivers and color imaging technologies to OEMs. Monotype Imaging technologies are combined with access to more than nine thousand typefaces from the Monotype Linotype and ITC typeface libraries home to some of the world\'s most widely used designs including the Times New Roman Helvetica and ITC Franklin Gothic typefaces. Fonts are licensed to creative and business professionals through custom font designs direct sales or e-commerce portals. Monotype Imaging offers fonts and industry-standard solutions that support all of the world\'s major languages. Monotype Imaging Holdings Inc. has a market cap of $254 million; its shares were traded at around $7.35 with a P/E ratio of 16.3 and P/S ratio of 2.3.
Highlight of Business Operations:
Revenue was $22.3 million and $28.8 million for the three months ended June 30, 2009 and 2008, respectively, a decrease of $6.5 million, or 22.8%. OEM revenue was $16.9 million and $20.2 million for the three months ended June 30, 2009 and 2008, respectively, a decrease of $3.3 million, or 16.4%. Printer imaging revenue and display imaging revenue declined $3.6 million in the three months ended June 30, 2009, as compared to the same period in 2008, the result of a decrease in royalty revenue from reduced sales volume by our OEM customers, which we attribute directly to the current economic downturn. This was partially offset by an increase in driver revenue of $0.3 million, mainly due to an increase in royalties related to the expansion of shipments of new products by one of our OEM customers.Creative professional revenue was $5.4 million and $8.6 million for the three months ended June 30, 2009 and 2008, respectively, a decrease of $3.3 million, or 38.0%. Creative professional revenue was down across all channels, specifically in direct, indirect, web and custom, as compared to the same period in 2008. Direct and indirect revenue declined $2.0 million. Web revenue from our corporate and individuals customers and custom font revenue from our corporate customers decreased $1.2 million in the three months ended June 30, 2009, as compared to the same period in 2008. We attribute the declines we have experienced in our creative professional revenue in the three months ended June 30, 2009, as compared to the same period in 2008, to the current economic downturn, as discretionary spending has been reduced by our customers.
Marketing and Selling. Marketing and selling expense was $5.5 million and $6.2 million in the three months ended June 30, 2009 and 2008, respectively, a decrease of $0.7 million, or 10.9% primarily the result of our restructuring plan and reductions in discretionary spending. Decreased personnel costs and a reduction in travel related expenses contributed $0.4 million to the decrease. Part of the reduction in personnel expenses was due to a lower sales volume and earnings, which affects variable compensation, and the remainder was
General and Administrative. General and administrative expense was $3.5 million and $5.4 million in the three months ended June 30, 2009 and 2008, respectively, a decrease of $1.9 million, or 35.6%. In the three months ended June 30, 2008, $0.7 million of costs incurred were associated with the filing of a registration statement with the Securities and Exchange Commission (SEC). There were no similar charges in the same period in 2009. Personnel costs decreased $0.3 million in the three months ended June 30, 2009, as compared to the same period in 2008, the result of a decline in variable compensation and the restructuring plan announced in the fall of 2008. Reductions in legal and professional service expenses contributed $0.6 million to the overall decrease in general and administrative expenses in the three months ended June 30, 2009, as compared to the same period in 2008. A reduction in Sarbanes-Oxley related expense of $0.3 million period-over-period, the result of less reliance on external assistance in this area, contributed to the overall decrease.
Amortization of Other Intangible Assets. Amortization of other intangible assets decreased $0.7 million or 38.3%, to $1.2 million for the three months ended June 30, 2009, as compared to $1.9 million for the three months ended June 30, 2008. Certain non-compete agreements entered into in connection with our acquisition from Agfa Corporation in 2004 became fully amortized during the fourth quarter of 2008, and as a result, we expect quarterly amortization of other intangible assets to remain at approximately $1.2 million going forward.
Interest expense, net of interest income decreased $0.9 million, or 46.6%, to $1.0 million for the three months ended June 30, 2009, as compared to $1.9 million for the three months ended June 30, 2008. The decrease is the result of lower total debt outstanding in the second quarter of 2009 as compared to the same period in 2008, as well as a decreased rate of interest on the outstanding debt. Total debt outstanding, net of unamortized financing costs and debt discounts, at June 30, 2009 was $101.7 million, as compared to $118.5 million at June 30, 2008. At June 30, 2009, the blended interest rate of borrowings under our Amended and Restated Credit Agreement was 3.1%, as compared to a blended rate of 5.2% at June 30, 2008.
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