Broadcast graphics specialist Chyron reported that its revenue for the fourth quarter of 2012 was $7.4m, down 9% versus the same period a year ago, and up 2% versus the previous quarter.
The net loss for the quarter was $20m, or $1.17 per share, versus a net loss of $400,000 or $0.02 per share last year, and a net loss of $3.49m, or $.21 per share. Included in the $20m net loss was a $19.5m valuation allowance against the company’s deferred tax assets.
The company’s operating loss for the fourth quarter of 2012 was $570,000, versus an operating loss of $430,000 last year, and operating loss of $1m last quarter.
Chyron CEO Michael Wellesley-Wesley described called the company’s Q4 2012 performance “somewhat disappointing” but said they were “in line with our experience of 2012 as a whole and similar from an end user demand standpoint to conditions being reported by [Vizrt].”
Wellesley-Wesley said demand for the company’s products and services “weakened in the second half of 2012 and didn’t have a meaningful recovery in the fourth quarter.”
Product revenue in the fourth quarter was $5.2m (70% of total revenue versus 67% last quarter) down 13% versus the same period a year ago, and up 7% versus the previous quarter.
Service revenue in the quarter which includes the sales of its AXIS cloud-based graphics service, maintenance agreements, training and creative services was $2.2m, up 6% versus last year, and down 8% versus last quarter.
Service revenue contributed 30% of total revenue, versus 25% last year, and 33% of total revenue last quarter.
Gross margins for the fourth quarter were 69.1%, down from 71.4% last year, and up from 67.9% last quarter.
Operating expenses for the fourth quarter were $5.7 compared to $6.2m last year, and $5.9m last quarter. R&D expenses for the quarter were $1.76m, flat with last year and down 4% versus last quarter. SG&A expenses for the quarter were $3.93m, down 12% versus last year. Interestingly, Chyron combined their reporting of sales and G&A expenses this quarter, making it the first time in recent memory that the two were not provided separately. This also makes it difficult to determine the full impact of the cost-cutting exercise that Chyron appears to have implemented last quarter.
Full Year Results
For the full year 2012, the company’s revenue was $30.2mm, down 4% versus 2011.
The net loss for the full year 2011 was $22.3m. or $1.31 per share million compared to a net loss of $4.2m or $0.26 per share in full year 2011, including the $19.5m provision mentioned above.
On an operating basis, the loss for the year was $3.7m, compared to a net loss of $1.95m in 2011.
Gross margins for the full year 2012 were 69.2% down from 70% in 2011. Operating expenses for year were $24.7m, up 2% versus 2011. The company said this primarily driven by 10% higher research and development expenses and 4% higher sales and marketing expenses, offset somewhat by 12% lower general and administrative expenses.
Full year revenue from services was $8.5m, up 11% versus 2011. Service revenues as a percentage of total revenues for 2012 were 28% as compared to 24% in 2011.
Product revenue for the year was $21.7m, a decrease of 9% versus 2011. Product revenues as a percentage of total revenues for 2012 were 72% as compared to 76% in 2011.
Chyron finished the year with $2.48m, in cash, down from $4.22m last year.
Wellesley-Wesley offered an honest assessment of the company’s position, saying “We believe that revenue growth in our traditional mature segments is achievable only through competitive wins and the current depressed and price competitive environment suggests that we will need to move in a different direction for us to rebuild shareholder value. Our industry will consolidate over the next 2-3 years in response to the rapid technology changes currently impacting the broadcast space. There are pockets of strong growth that we need to address and the best way to achieve growth is through alliances, partnerships and acquisitions.”
This was a nice segue into the company’s separate announcement that it has merged with Hego in an all stock transaction.
Press Release: Chyron Reports Financial Results for the Fourth Quarter and Full Year 2012
Press Release: Chyron to Acquire Hego Group
Previous Quarter: Chyron Cuts Expenses as Revenue Declines 3 Percent in Q3 2012
Previous Year: Chyron Grows Top Line 15% in Q4 2011, But Losses Persist
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