Bitstream Inc. (BITS) March 20, 2012 8:00 am ET Executives Staci Mortenson - Senior Vice President Douglas J. Shaw - Chief Executive Officer, President and Director Scott Landers - Chief Financial Officer, Principal Accounting Officer, Senior Vice President, Treasurer and Assistant Secretary Analysts Ross MacMillan - Jefferies & Company, Inc., Research Division Barbara Coffey - Brigantine Advisors Steven B. Frankel - Dougherty & Company LLC, Research Division Saket Kalia - JP Morgan Chase & Co, Research Division Matthew J. Kempler - Sidoti & Company, LLC Presentation Operator
In addition, I'd like to remind you that today's discussion will include references to net adjusted EBITDA and non-GAAP diluted EPS, which are intended to serve as further complement to our results provided in accordance with Generally Accepted Accounting Principles. A reconciliation of these non-GAAP measures can be found in our press release issued yesterday.In addition, a recording of today's call can be found under Events & Presentations in the Investor Relations section of our website at www.monotypeimaging.com. The call will be archived on our website for one year. And now I'd like to turn the call over to Doug Shaw. Doug? Douglas J. Shaw Thank you for joining us this morning to discuss our exciting news that Monotype Imaging has completed its acquisition of Bitstream's font business. I'll start with a brief overview of the key strategic reasons behind the transaction and then pass the call over to Scott. He will provide financial details including an update on guidance. Our mission is to be the first place to turn for typefaces, technology and expertise that enable the best user experience and ensure brand integrity regardless of device, platform or language. We've successfully grown our business organically and through acquisitions, and we believe that acquiring Bitstream's font business will strengthen our ability to deliver on our mission and to better meet customer needs. The transaction includes the popular MyFonts website, Bitstream's typeface library, the company's font rendering and layout technologies, fonts for embedded and mobile environments and 10 patents. We've also gained new customers such as Cox Communications, WebEx and QNX. Turning to MyFonts. We see significant value in this online store, which features 89,000 fonts from nearly 900 foundries. Through MyFonts, Bitstream has fostered a dynamic creative community. The site offers cutting-edge designs that complement our classic historic fonts used by corporations and brands. In addition, MyFonts features the unique WhatTheFont service, which helps customers to quickly identify typefaces. MyFonts has also made successful inroads within the Web fonts market, where MyFonts' customers are able to use self-contained kits that can be easily uploaded. Customers are therefore able to self-host Web fonts and not be dependent on external services.
Finally, the MyFonts site provides an excellent user experience and allows foundries to easily promote their fonts and access sales reports in real time. It is our intention to put more resources behind MyFonts with an eye towards supporting and extending the best aspects of MyFonts within our e-commerce and cloud-based offerings.Turning to OEM. Bitstream's OEM business brings to Monotype Imaging a complementary customer base that maps directly into the markets we serve, particularly in display imaging. We expect to expand within Bitstream's accounts by providing additional value while adding depth to our already strong family of OEM products and services. Further, we're excited to welcome some of the most respected and talented professionals in the type industry. As of today, 13 people have joined us from Bitstream's U.S. operations. We've also gained our first development and R&D center in India, which is staffed by 42 engineers and type designers. Along with a host of talented associates, we're thrilled to welcome industry leaders, including Sampo Kaasila, John Collins and Kevin Woodward. Sampo is an industry veteran who worked at Apple as the lead engineer and inventor of TrueType font technology. John has developed numerous type composition and font rendering systems and has been the key driver behind the MyFonts business. Kevin is the creator of WhatTheFont, as well as the custom font rendering software used in MyFonts. We expect that the addition of Bitstream's expertise will further our ability to provide broad-based development resources to our OEM and Creative Professional businesses. Read the rest of this transcript for free on seekingalpha.com