Monotype Imaging Holdings Inc. (TYPE, Financial) filed Quarterly Report for the period ended 2009-03-31.
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 $167.9 million; its shares were traded at around $4.86 with a P/E ratio of 11.3 and P/S ratio of 1.6.
Creative professional revenue decreased $3.3 million or 34.0%, to $6.3 million for the three months ended March 31, 2009, as compared to $9.6 million for the three months ended March 31, 2008. In the three months ended March 31, 2009, creative professional revenue was down across all product lines; specifically in direct, indirect, web and custom, as compared to the same period in 2008. The first quarter of 2008 was a strong quarter for creative professional revenue and was highlighted by several large direct revenue contracts, which did not repeat in the first quarter of 2009. Together these contracts accounted for $0.9 million of the overall period over period decline in creative professional revenue. The decline in indirect revenue and remainder of the decline in direct revenue, which we believe is attributable to the current economic downturn, is $1.2 million period over period. Web and custom revenue contributed $1.0 million to the decline period over period. Custom font revenue from our corporate customers was down 53.8%, as compared to the same period in 2008, as discretionary corporate spending had been reduced as a result of the current economic conditions.
General and Administrative. General and administrative expense decreased $1.4 million or 27.0%, to $3.8 million for the three months ended March 31, 2009, as compared to $5.2 million for the three months ended March 31, 2008. Personnel expenses decreased $0.4 million, the result of fewer employees in the three months ended March 31, 2009, as compared to the same period in 2008. There was an 8.9% reduction in headcount period over period, of which approximately half was due to the restructuring plan announced in the fall of 2008. Reductions in legal and professional service expenses contributed $0.7 million to the overall decrease in general and administrative expense in the three months ended March 31, 2009, as compared to the same period in 2008. Costs associated with the filing of a registration statement with the SEC in the three months ended March 31, 2008, were $0.5 million. There were no similar charges in the same period in 2009. Share based compensation expense increased $0.3 million in the first quarter of 2009 as compared to the same period in 2008.
(Gain) loss on derivatives was a gain of $0.4 million and a loss of $14 thousand in the three months ended March 31, 2009 and 2008, respectively, an increase of approximately $0.4 million, primarily due to an increase in our use of derivatives to manage risks. In the three months ended March 31, 2009, we recorded a gain on our currency swap of $0.8 million which was partially offset by a loss on our interest rate swap of $0.4 million. The currency swap was entered into during the second quarter of 2008, and the interest rate swap was entered into in November 2008. The loss during the same period in 2008 relates to our interest rate cap instruments.
We generated $16.4 million in cash from operations during the three months ended March 31, 2009. Net income, after adjusting for depreciation and amortization, amortization of financing costs, share based compensation, provision for doubtful accounts, deferred income taxes, unrealized currency loss on foreign denominated intercompany transactions and unrealized gain on derivatives, generated $8.4 million in cash. Prepaid expenses and other assets, accounts payable, accrued income taxes and accrued expenses and other liabilities used $2.9 million in cash. Accounts receivable provided $2.3 million in cash. Our accounts receivable balance at December 31, 2008, contained a few large customer balances due to the timing of billings which we have since collected. Deferred revenue provided $8.6 million in cash resulting primarily from the receipt of two large royalty prepayments.
We generated $10.9 million in cash from operations during the three months ended March 31, 2008. Net income, after adjusting for depreciation and amortization, amortization of financing costs, share based compensation, provision for doubtful accounts, deferred income taxes, unrealized currency gain on foreign denominated intercompany transactions and unrealized gain on derivatives, generated $5.7 million in cash. Deferred revenue and accrued income taxes provided $10.4 million and $0.4 million, respectively, in cash. These were partially offset by increases in accounts receivable and prepaid and other assets and decreases in accounts payable and accrued expenses and other liabilities using $5.6 million in cash. The decreased balance in accounts payable is the result of timing of certain contractual royalty payments.
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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 $167.9 million; its shares were traded at around $4.86 with a P/E ratio of 11.3 and P/S ratio of 1.6.
Highlight of Business Operations:
Revenue was $23.6 million and $27.3 million for the three months ended March 31, 2009 and 2008, respectively, a decrease of $3.7 million, or 13.7%. OEM revenue was $17.3 million and $17.8 million for the three months ended March 31, 2009 and 2008, respectively, a decrease of $0.5 million, or 2.7%, due to a decrease in royalty revenue in printer imaging. Printer imaging revenue declined 4.1% or $0.5 million, the result of a decrease in royalty revenue from reduced sales volume by our OEM customers as a result of the current economic downturn. Driver and display imaging revenue in the three months ended March 31, 2009, was consistent with the same period in 2008.Creative professional revenue decreased $3.3 million or 34.0%, to $6.3 million for the three months ended March 31, 2009, as compared to $9.6 million for the three months ended March 31, 2008. In the three months ended March 31, 2009, creative professional revenue was down across all product lines; specifically in direct, indirect, web and custom, as compared to the same period in 2008. The first quarter of 2008 was a strong quarter for creative professional revenue and was highlighted by several large direct revenue contracts, which did not repeat in the first quarter of 2009. Together these contracts accounted for $0.9 million of the overall period over period decline in creative professional revenue. The decline in indirect revenue and remainder of the decline in direct revenue, which we believe is attributable to the current economic downturn, is $1.2 million period over period. Web and custom revenue contributed $1.0 million to the decline period over period. Custom font revenue from our corporate customers was down 53.8%, as compared to the same period in 2008, as discretionary corporate spending had been reduced as a result of the current economic conditions.
General and Administrative. General and administrative expense decreased $1.4 million or 27.0%, to $3.8 million for the three months ended March 31, 2009, as compared to $5.2 million for the three months ended March 31, 2008. Personnel expenses decreased $0.4 million, the result of fewer employees in the three months ended March 31, 2009, as compared to the same period in 2008. There was an 8.9% reduction in headcount period over period, of which approximately half was due to the restructuring plan announced in the fall of 2008. Reductions in legal and professional service expenses contributed $0.7 million to the overall decrease in general and administrative expense in the three months ended March 31, 2009, as compared to the same period in 2008. Costs associated with the filing of a registration statement with the SEC in the three months ended March 31, 2008, were $0.5 million. There were no similar charges in the same period in 2009. Share based compensation expense increased $0.3 million in the first quarter of 2009 as compared to the same period in 2008.
(Gain) loss on derivatives was a gain of $0.4 million and a loss of $14 thousand in the three months ended March 31, 2009 and 2008, respectively, an increase of approximately $0.4 million, primarily due to an increase in our use of derivatives to manage risks. In the three months ended March 31, 2009, we recorded a gain on our currency swap of $0.8 million which was partially offset by a loss on our interest rate swap of $0.4 million. The currency swap was entered into during the second quarter of 2008, and the interest rate swap was entered into in November 2008. The loss during the same period in 2008 relates to our interest rate cap instruments.
We generated $16.4 million in cash from operations during the three months ended March 31, 2009. Net income, after adjusting for depreciation and amortization, amortization of financing costs, share based compensation, provision for doubtful accounts, deferred income taxes, unrealized currency loss on foreign denominated intercompany transactions and unrealized gain on derivatives, generated $8.4 million in cash. Prepaid expenses and other assets, accounts payable, accrued income taxes and accrued expenses and other liabilities used $2.9 million in cash. Accounts receivable provided $2.3 million in cash. Our accounts receivable balance at December 31, 2008, contained a few large customer balances due to the timing of billings which we have since collected. Deferred revenue provided $8.6 million in cash resulting primarily from the receipt of two large royalty prepayments.
We generated $10.9 million in cash from operations during the three months ended March 31, 2008. Net income, after adjusting for depreciation and amortization, amortization of financing costs, share based compensation, provision for doubtful accounts, deferred income taxes, unrealized currency gain on foreign denominated intercompany transactions and unrealized gain on derivatives, generated $5.7 million in cash. Deferred revenue and accrued income taxes provided $10.4 million and $0.4 million, respectively, in cash. These were partially offset by increases in accounts receivable and prepaid and other assets and decreases in accounts payable and accrued expenses and other liabilities using $5.6 million in cash. The decreased balance in accounts payable is the result of timing of certain contractual royalty payments.
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