UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
November 6, 2015
Date of Report (Date of earliest event reported)
MONOTYPE IMAGING HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-33612 | 20-3289482 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File No.) |
(IRS Employer Identification No.) |
600 Unicorn Park Drive Woburn, Massachusetts 01801 |
(Address of Principal Executive Offices, including Zip Code) |
Registrants telephone number, including area code: (781) 970-6000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 | Regulation FD Disclosure |
On November 9, 2015, Monotype Imaging Holdings Inc. (the Company) issued a press release announcing an amendment to the Agreement and Plan of Merger by and among the Company, Imaging Holdings Corp., Irish Acquisition Sub Inc., TextPride, Inc. and TP Shareholders Representative, LLC, dated as of January 30, 2015. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information on this Form 8-K (including Exhibit 99.1) shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 | Financial Statements and Exhibits |
(d) | Exhibits |
The following exhibit relating to Item 7.01 shall be deemed to be furnished, and not filed:
99.1 | Press Release issued by Monotype Imaging Holdings Inc. on November 9, 2015. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.
MONOTYPE IMAGING HOLDINGS INC. | ||||||
November 9, 2015 | By: | /s/ Douglas J. Shaw | ||||
Douglas J. Shaw | ||||||
President and Chief Executive Officer |
EXHIBIT INDEX
Exhibit Number |
Description | |
99.1 | Press Release issued by Monotype Imaging Holdings Inc. on November 9, 2015. |
Exhibit 99.1
Monotype Accelerates Earnout in Swyft Media Acquisition
WOBURN, Mass., November 9, 2015 Monotype Imaging Holdings Inc. (Nasdaq: TYPE), a leading provider of typefaces, technology and expertise for creative applications and consumer devices, today announced that in association with its Jan. 30, 2015 acquisition of Swyft Media, Monotype is accelerating the payment of earnout amounts to Swyft Media shareholders. At the time of the acquisition, the transaction included an opportunity for Swyft Media shareholders to realize up to $15 million in additional consideration based on attainment of certain performance criteria through 2017. Under the newly amended agreement, this amount will be paid over the next three years, beginning in the fourth quarter of 2015. Approximately $5.7 million will be paid during the fourth quarter of 2015 to non-employee Swyft Media shareholders. Approximately $9.3 million remaining will be paid to Swyft Media founder-shareholders in increments of roughly $2 million in January 2018 and $7.3 million in October 2018, provided certain employment terms are met.
Were pleased with Swyfts progress to date, and are encouraged by early indicators of customer adoption and its strategic fit into our value story, said Doug Shaw, president and chief executive officer at Monotype. Under the previous earnout structure, we had to run Swyft as a separate entity. By speeding up the earnout, we can now fully integrate Swyft into our organization and offerings and leverage the efficiencies associated with that integration.
Changes in definition of non-GAAP earnings per diluted share and non-GAAP net adjusted EBITDA
Of the $15 million of contingent consideration to be paid under the amended Swyft agreement, approximately $10 million will be recognized as operating expense through 2018, and will not be deductible for income tax purposes. Beginning in the fourth quarter of 2015, Monotype is amending its definition of non-GAAP earnings per diluted share and non-GAAP net adjusted EBITDA to exclude the impact of acquisition-related contingent consideration adjustments. The impact of these adjustments will be added back in calculating non-GAAP earnings per diluted share and non-GAAP net adjusted EBITDA. These changes more accurately reflect managements view of Monotypes business and financial performance. A historical reconciliation of this change is presented in the tables accompanying this release.
Expected financial impact
For the fourth quarter, Monotype continues to expect total revenue of $48.0 to $50.5 million, non-GAAP net adjusted EBITDA of $19.5 to $22.0 million, and non-GAAP earnings per diluted share of $0.29 to $0.33. GAAP earnings per diluted share now is expected to be $0.09 to $0.13, down from prior guidance of $0.20 to $0.24. Operating expenses are now expected to be approximately $30 million, inclusive of $4.2 million of additional expense for the contingent consideration adjustment.
For the full year 2015, Monotype continues to expect total revenue of $189.8 to $192.3 million, net adjusted EBITDA of $69.7 to $72.2 million, and non-GAAP earnings per diluted share of $1.10 to $1.14. GAAP earnings per diluted share is now expected to be $0.63 to $0.67, down from prior guidance of $0.74 to $0.78. Operating expenses are now expected to be approximately $114 million, inclusive of $4.2 million of additional expense for the contingent consideration adjustment.
Forward-looking statements
This press release contains forward-looking statements, including those related to expected future performance, that involve risks and uncertainties that could cause the companys 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, and risks associated with the companys ability to integrate the acquisition, including the expansion of products and services offered through the acquired company. Additional disclosure regarding these and other risks faced by the company is available in the companys public filings with the Securities and Exchange Commission, including the risk factors included in the companys Annual Report on Form 10-K for the year ended Dec. 31, 2014 and subsequent filings. The financial information set forth in this press release reflects estimates based on information available at this time. While Monotype 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 is a leading global provider of typefaces, technology and expertise that enable the best user experience and ensure brand integrity. Headquartered in Woburn, Mass., Monotype provides customers worldwide with typeface solutions for a broad range of creative applications and consumer devices. The companys libraries and e-commerce sites are home to many of the most widely used typefaces including the Helvetica®, Frutiger® and Univers® families as well as the next generation of type designs. Further information is available at www.monotype.com. Follow Monotype on Twitter, Instagram and LinkedIn.
Monotype, Helvetica and Frutiger are trademarks of Monotype Imaging Inc. registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. Univers is a trademark of Monotype GmbH registered in the U.S. Patent and Trademark Office and may be registered in certain jurisdictions. All other trademarks are the property of their respective owners. ©2015 Monotype Imaging Holdings Inc. All rights reserved.
Investor Relations contact
Chris Brooks
781-970-6120
ir@monotype.com
Press Contact:
Amy Aylward
781-970-6070
amy.aylward@monotype.com
MONOTYPE IMAGING HOLDINGS INC.
OTHER INFORMATION
(Unaudited and in thousands, except share and per share data)
RECONCILIATION OF REPORTED NON-GAAP NET ADJUSTED EBITDA TO ADJUSTED NON-GAAP NET ADJUSTED EBITDA
Q1 2014 | Q2 2014 | Q3 2014 | Q4 2014 | Q1 2015 | Q2 2015 | Q3 2015 | ||||||||||||||||||||||
Non-GAAP net adjusted EBITDA (as reported) |
$ | 19,160 | $ | 18,525 | $ | 18,022 | $ | 18,687 | $ | 16,200 | $ | 16,360 | $ | 17,703 | ||||||||||||||
Adjustments for contingent consideration |
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Swyft |
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Design by Front |
(552 | ) | (600 | ) | (629 | ) | ||||||||||||||||||||||
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Non-GAAP net adjusted EBITDA (adjusted) |
$ | 19,160 | $ | 17,973 | $ | 17,422 | $ | 18,058 | $ | 16,200 | $ | 16,360 | $ | 17,703 | ||||||||||||||
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RECONCILIATION OF REPORTED NON-GAAP EARNINGS PER DILUTED SHARE TO ADJUSTED NON-GAAP EARNINGS PER DILUTED SHARE
AS REPORTED | ||||||||||||||||||||||||||||
Q1 2014 |
Q2 2014 |
Q3 2014 |
Q4 2014 |
Q1 2015 |
Q2 2015 |
Q3 2015 |
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GAAP earnings per diluted share |
$ | 0.21 | $ | 0.19 | $ | 0.17 | $ | 0.23 | $ | 0.18 | $ | 0.15 | $ | 0.20 | ||||||||||||||
Amortization, net of tax, per diluted share |
0.04 | 0.04 | 0.04 | 0.04 | 0.03 | 0.03 | 0.04 | |||||||||||||||||||||
Share based compensation, net of tax, per diluted share |
0.04 | 0.04 | 0.06 | 0.06 | 0.05 | 0.06 | 0.07 | |||||||||||||||||||||
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Non-GAAP earnings per diluted share (as reported) |
$ | 0.29 | $ | 0.27 | $ | 0.27 | $ | 0.33 | $ | 0.26 | $ | 0.24 | $ | 0.31 | ||||||||||||||
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ADJUSTED | ||||||||||||||||||||||||||||
Q1 2014 |
Q2 2014 |
Q3 2014 |
Q4 2014 |
Q1 2015 |
Q2 2015 |
Q3 2015 |
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GAAP earnings per diluted share |
$ | 0.21 | $ | 0.19 | $ | 0.17 | $ | 0.23 | $ | 0.18 | $ | 0.15 | $ | 0.20 | ||||||||||||||
Amortization, net of tax, per diluted share |
0.04 | 0.04 | 0.04 | 0.04 | 0.03 | 0.03 | 0.04 | |||||||||||||||||||||
Share based compensation, net of tax, per diluted share |
0.04 | 0.04 | 0.06 | 0.06 | 0.05 | 0.06 | 0.07 | |||||||||||||||||||||
Contingent consideration adjustment, net of tax, per diluted share |
(0.02 | ) | (0.02 | ) | (0.01 | ) | ||||||||||||||||||||||
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Non-GAAP earnings per diluted share (adjusted) |
$ | 0.29 | $ | 0.25 | $ | 0.25 | $ | 0.32 | $ | 0.26 | $ | 0.24 | $ | 0.31 | ||||||||||||||
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Periods prior to the quarter end June 2014 are unchanged from previously reported amount.
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 |
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Q4 2015 | Q4 2015 | |||||||
GAAP net income |
$ | 3,800 | $ | 5,400 | ||||
Amortization, net of tax |
1,200 | 1,200 | ||||||
Share based compensation, net of tax |
2,300 | 2,300 | ||||||
Contingent consideration adjustment, net of tax |
4,200 | 4,200 | ||||||
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Non-GAAP net income |
$ | 11,500 | $ | 13,100 | ||||
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GAAP earnings per diluted share |
$ | 0.09 | $ | 0.13 | ||||
Amortization, net of tax, per diluted share |
0.03 | 0.03 | ||||||
Share based compensation, net of tax, per diluted share |
0.06 | 0.06 | ||||||
Contingent consideration adjustment, net of tax, per diluted share |
0.11 | 0.11 | ||||||
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Non-GAAP earnings per diluted share |
$ | 0.29 | $ | 0.33 | ||||
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Weighted average diluted shares used to compute earnings per share |
39,400,000 | 39,400,000 |
Assumes 35% effective tax rate.
Low End of Guidance |
High End of Guidance |
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2015 | 2015 | |||||||
GAAP net income |
$ | 25,100 | $ | 26,700 | ||||
Amortization, net of tax |
5,100 | 5,100 | ||||||
Share based compensation, net of tax |
9,000 | 9,000 | ||||||
Contingent consideration adjustment, net of tax |
4,200 | 4,200 | ||||||
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Non-GAAP net income |
43,400 | 45,000 | ||||||
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GAAP earnings per diluted share |
$ | 0.63 | $ | 0.67 | ||||
Amortization, net of tax, per diluted share |
0.13 | 0.13 | ||||||
Share based compensation, net of tax, per diluted share |
0.23 | 0.23 | ||||||
Contingent consideration adjustment, net of tax, per diluted share |
0.11 | 0.11 | ||||||
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Non-GAAP earnings per diluted share |
$ | 1.10 | $ | 1.14 | ||||
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Weighted average diluted shares used to compute earnings per share |
39,400,000 | 39,400,000 |
Assumes 33% effective tax rate.
MONOTYPE IMAGING HOLDINGS INC.
RECONCILIATION OF FORECAST GAAP OPERATING INCOME
TO FORECAST NON-GAAP NET ADJUSTED EBITDA
(Unaudited and in thousands)
Low End of Guidance |
High End of Guidance |
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Q4 2015 | Q4 2015 | |||||||
GAAP operating income |
$ | 8,900 | $ | 11,400 | ||||
Depreciation and amortization |
2,800 | 2,800 | ||||||
Share based compensation |
3,600 | 3,600 | ||||||
Contingent consideration adjustment |
4,200 | 4,200 | ||||||
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Non-GAAP net adjusted EBITDA |
$ | 19,500 | $ | 22,000 | ||||
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Low End of Guidance |
High End of Guidance |
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2015 | 2015 | |||||||
GAAP operating income |
$ | 41,400 | $ | 43,900 | ||||
Depreciation and amortization |
10,700 | 10,700 | ||||||
Share based compensation |
13,400 | 13,400 | ||||||
Contingent consideration adjustment |
4,200 | 4,200 | ||||||
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Non-GAAP net adjusted EBITDA |
$ | 69,700 | $ | 72,200 | ||||
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