Monotype Imaging Holdings Inc. (TYPE, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $271.6 million; its shares were traded at around $7.85 with a P/E ratio of 17.5 and P/S ratio of 2.5.
Creative professional revenue was $6.7 million and $7.5 million for the three months ended September 30, 2009 and 2008, respectively, a decrease of $0.8 million, or 11.1%. Web revenue from our corporate and individual customers decreased $0.7 million in the third quarter of 2009, as compared to the same period in 2008, which we attribute to the impact the current economic downturn has had on the publishing and advertising industries. Increased revenue from FontExplorer, our font management software tool, offset by a net decrease in non-web revenue together contributed $0.1 million to the overall decline in creative professional revenue in the third quarter of 2009, as compared to the same period in 2008.
Marketing and Selling. Marketing and selling expense was $5.8 million and $5.6 million in the three months ended September 30, 2009 and 2008, respectively, an increase of $0.2 million, or 3.8%. Share based compensation expense increased $0.1 million in the three months ended September 30, 2009, as compared to the same period in 2008, the result of additional vesting of options and restricted stock and an increase in the number of stock awards granted. An increase in third party commissions was partially offset by a decrease in outside services, which provided an increase of $0.1 million to the overall marketing and selling expense in the three months ended September 30, 2009, as compared the same period in 2008. Headcount increased 20.2% mainly from our fourth quarter 2008 restructuring actions, where certain employees were redeployed within our sales and marketing areas from development related activities. The associated increase in salaries and related benefits was offset by decreases in variable compensation.
General and Administrative. General and administrative expense was $3.6 million and $4.8 million in the three months ended September 30, 2009 and 2008, respectively, a decrease of $1.2 million, or 25.9%. Personnel and personnel related costs decreased $0.5 million in the third quarter of 2009, as compared to the same period in 2008, the result of lower headcount and a decrease in variable compensation. Headcount decreased 16.9% mainly as a result of our fourth quarter 2008 restructuring actions. Sarbanes-Oxley related expense decreased $0.4 million in the three months ended September 30, 2009 as compared to the same period in 2008, the result of reduced reliance on external assistance. The remaining $0.3 million decrease resulted from a general decline in discretionary spending.
Interest expense, net of interest income decreased $0.8 million, or 45.3%, to $1.0 million for the three months ended September 30, 2009, as compared to $1.8 million for the three months ended September 30, 2008. The decrease is the result of lower total debt outstanding in the third 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, at September 30, 2009 was $99.2 million, as compared to $116.1 million at September 30, 2008. At September 30, 2009, the blended interest rate on our Amended and Restated Credit Agreement was 3.0% as compared to a blended rate of 6.5% at September 30, 2008.
Loss (gain) on derivatives was a loss of $1.1 million in the three months ended September 30, 2009, as compared to a gain of $2.5 million in the three months ended September 30, 2008. The loss in the third quarter of 2009 consisted of a $0.9 million loss on our currency swap and a $0.2 million loss on our interest rate swap contract. In the three months ended September 30, 2008, we recorded a gain of $2.6 million on the currency swap instrument. We entered into an interest rate swap contract during the fourth quarter of 2008 to mitigate exposure to interest rate fluctuations on our bank debt obligation. There were no interest rate swap contracts outstanding in the same period in 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 $271.6 million; its shares were traded at around $7.85 with a P/E ratio of 17.5 and P/S ratio of 2.5.
Highlight of Business Operations:
Revenue was $23.0 million and $27.3 million for the three months ended September 30, 2009 and 2008, respectively, a decrease of $4.3 million, or 15.7%. OEM revenue was $16.3 million and $19.8 million for the three months ended September 30, 2009 and 2008, respectively, a decrease of $3.4 million, or 17.4%, mainly the result of decreased royalty revenue. Printer imaging revenue and display imaging revenue declined $3.6 million in the third quarter of 2009, as compared to the same period in 2008, the result of decreased royalties from reduced unit shipments by our OEM customers. We attribute the declines we have experienced in our OEM revenue to the current economic downturn. Driver revenue increased $0.2 million, mainly due to an increase in royalty revenue related to the broader deployment of our driver solutions within the product lines of our existing OEM customer base.Creative professional revenue was $6.7 million and $7.5 million for the three months ended September 30, 2009 and 2008, respectively, a decrease of $0.8 million, or 11.1%. Web revenue from our corporate and individual customers decreased $0.7 million in the third quarter of 2009, as compared to the same period in 2008, which we attribute to the impact the current economic downturn has had on the publishing and advertising industries. Increased revenue from FontExplorer, our font management software tool, offset by a net decrease in non-web revenue together contributed $0.1 million to the overall decline in creative professional revenue in the third quarter of 2009, as compared to the same period in 2008.
Marketing and Selling. Marketing and selling expense was $5.8 million and $5.6 million in the three months ended September 30, 2009 and 2008, respectively, an increase of $0.2 million, or 3.8%. Share based compensation expense increased $0.1 million in the three months ended September 30, 2009, as compared to the same period in 2008, the result of additional vesting of options and restricted stock and an increase in the number of stock awards granted. An increase in third party commissions was partially offset by a decrease in outside services, which provided an increase of $0.1 million to the overall marketing and selling expense in the three months ended September 30, 2009, as compared the same period in 2008. Headcount increased 20.2% mainly from our fourth quarter 2008 restructuring actions, where certain employees were redeployed within our sales and marketing areas from development related activities. The associated increase in salaries and related benefits was offset by decreases in variable compensation.
General and Administrative. General and administrative expense was $3.6 million and $4.8 million in the three months ended September 30, 2009 and 2008, respectively, a decrease of $1.2 million, or 25.9%. Personnel and personnel related costs decreased $0.5 million in the third quarter of 2009, as compared to the same period in 2008, the result of lower headcount and a decrease in variable compensation. Headcount decreased 16.9% mainly as a result of our fourth quarter 2008 restructuring actions. Sarbanes-Oxley related expense decreased $0.4 million in the three months ended September 30, 2009 as compared to the same period in 2008, the result of reduced reliance on external assistance. The remaining $0.3 million decrease resulted from a general decline in discretionary spending.
Interest expense, net of interest income decreased $0.8 million, or 45.3%, to $1.0 million for the three months ended September 30, 2009, as compared to $1.8 million for the three months ended September 30, 2008. The decrease is the result of lower total debt outstanding in the third 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, at September 30, 2009 was $99.2 million, as compared to $116.1 million at September 30, 2008. At September 30, 2009, the blended interest rate on our Amended and Restated Credit Agreement was 3.0% as compared to a blended rate of 6.5% at September 30, 2008.
Loss (gain) on derivatives was a loss of $1.1 million in the three months ended September 30, 2009, as compared to a gain of $2.5 million in the three months ended September 30, 2008. The loss in the third quarter of 2009 consisted of a $0.9 million loss on our currency swap and a $0.2 million loss on our interest rate swap contract. In the three months ended September 30, 2008, we recorded a gain of $2.6 million on the currency swap instrument. We entered into an interest rate swap contract during the fourth quarter of 2008 to mitigate exposure to interest rate fluctuations on our bank debt obligation. There were no interest rate swap contracts outstanding in the same period in 2008.
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