Chyron Reports Financial Results for the Second Quarter and First Six Months of 2010

August 6, 2010

Source: Chyron Corporation


Chyron announced its financial results for the second quarter and six months ended June 30, 2010.

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Second Quarter 2010 Year-Over-Year Financial Highlights:

Revenues of $6.94 million were up 20%;
Gross profit margin improved to 70% compared to 69%;
Operating loss narrowed 52% to $0.68 million;
Net loss narrowed 35% to $0.71 million;
Loss per share, basic and diluted, reduced to $0.04 per share, a $0.03 per share improvement; and
Earnings before interest, taxes, depreciation and amortization ("EBITDA") plus non-cash share-based compensation expense ("Adjusted EBITDA") significantly improved to $0.06 million. An explanation of management's use of this measure of results and a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure of net income (loss) is set forth at the end of this press release.

Michael Wellesley-Wesley, Chyron President and CEO, commented, "Chyron's recovery from the recessionary levels in 2009 strengthened even further in the second quarter with business metrics improving across the board. This was most evident in revenue, which has been steadily building momentum during the first half. Revenues were up 20% in the second quarter and 10% in the first quarter when compared to the respective periods last year.

"If the economy continues to improve, we anticipate that our revenues will continue to improve in the second half of the year over the prior year periods; however, our focus will remain on cost containment and cash generation. The budgets of our worldwide media customers are impacted by economic ups and downs, and though we have seen improvement in our markets, we believe that a guarded outlook for the short-term is prudent given the fragile and patchy nature of this recovery.

"When looking at Chyron's medium-term prospects into 2011, we are more optimistic. We believe that the technology enhancements that we put into place in 2009 and 2010 has made Chyron a stronger company with a clear means to drive future growth. We believe that Chyron is well-positioned to gain market share in its core broadcast market and able to penetrate new media verticals with AXIS Graphics, a unique cloud service content creation software solution.

" Our recent focus has been on building a world class sales and marketing infrastructure. We have successfully recruited senior sales and marketing executives with proven track records and extensive experience across the media/technology space. Bonnie Barclay has joined us as Chief Marketing Officer, Susan Brazer has joined as Chief Commercial Officer and Paul Glasgow will head our European sales effort. We plan to selectively add incremental sales resources as needed in the second half of 2010."

Mr. Wellesley-Wesley concluded, "If the economy continues to improve, we expect to generate a strong return from these investments in 2011 and 2012. With product development ahead of schedule and our business on track, all that remains now is to execute our aggressive revenue growth strategy."

Second Quarter Financial Results

For the second quarter of 2010, total revenues were $6.94 million, an increase of 20% over revenues of $5.78 million for the second quarter of 2009.

Service revenues, which include revenues from the Company's AXIS online graphics service, as well as maintenance agreements, training and creative services, were $1.53 million for the quarter, a 29% increase over service revenues of $1.19 million for the prior year's second quarter.

Service revenues as a percentage of total revenues increased to 22% from 21% in the prior year's second quarter. Product revenues were $5.40 million for the second quarter, an 18% increase year-over-year.

Gross profit margin was 70% and 69% for the second quarters of 2010 and 2009, respectively. Operating loss in the second quarter of 2010 narrowed significantly to $0.68 million, a 52% improvement over the operating loss of $1.43 million for the prior year's second quarter.

The decrease in operating loss is primarily the result of increased revenues and gross profit margin, and slowing growth in operating expenses. For the second quarter 2010, operating expenses were $5.50 million, an increase of 2% over the $5.41 million in operating expenses for the comparable prior year quarter.

Net loss for the second quarter of 2010 was $0.71 million, a 35% improvement over the $1.09 million net loss reported for second quarter of 2009.

Six Month Results

For the six months ended June 30, 2010, total revenues were $13.81 million, an increase of $1.76 million, or 15% over the comparable prior year period.

Service revenues were $3.05 million, up $0.72 million or 31% over the prior year period. Product revenues increased $1.03 million to $10.76 million, or 11%, year-over-year. Service revenues increased to 22% of total revenues from 19% of total revenues compared to the same period last year.

Gross profit margin increased to 70% from 68% in the year earlier period. Operating expenses of $10.79 million for the first six months of 2010 increased slightly from the $10.70 million reported for the prior year period. While for the first six months of 2010 there was an operating loss of $1.14 million, this represents a $1.36 million or 54% improvement over the $2.50 million operating loss reported for the first six months of 2009.

Net loss for the first six months of 2010 was $1.37 million, a $0.60 million or 30% improvement over the $1.97 million net loss for the first six months of 2009.

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