Archive for the ‘Annual Results’ Category

Grass Valley Paid $94.2M for Snell Advanced Media

Analysis, Annual Results, Broadcast Vendor M&A, Conference Sessions, SEC Filings | Posted by Joe Zaller
Feb 13 2018

Last week, Belden / Grass Valley announced it had closed the acquisition of Snell Advanced Media (SAM).

At that time, the company did not disclose the terms of the deal.

Today, Belden said in a filing with securities regulators that it paid $75.8 million plus the assumption of $18.4 million of debt for a company it acquired on February 8, 2018 (the same day it confirmed the SAM acquisition).

This equates to an enterprise value of $94.2 million.

Based on filings with the UK government, SAM’s parent company had revenue of £90.8 million ($123 million USD at 2016 average exchange rate) through December 31, 201, and increase of 20.3% from £75.4 million ($115.2 million USD at 2015 average exchange rate) for the 12 months ending December 31, 2015.

Based on its previous acquisitions in the broadcast industry, Belden typically pays around 8x EBITDA when it buys a company.  If that was the case in the SAM transaction, it would mean that SAM’s EBITDA over the trailing twelve months prior to the acquisition was $11.775 million. However, in its filing with UK regulators, SAM said it had EBITDA of -£1.6 million for the 12 months ending on December 31, 2016.  Performance for the full year 2017 is unknown.

Given SAM’s growth from 2015 to 2016, the company may have achieved positive EBITDA, but the full details won’t be known until Belden provides additional information about the transaction (which it said it will do closer to the 2018 NAB Show).  It’s also possible that the valuation was based on a multiple of SAM’s sales in 2017.


Attend the 2018 Devoncroft Executive Summit to hear more about Belden’s strategy

For those wondering about Belden’s plans for SAM, and whether it continues to look for M&A targets in the broadcast industry, join us on April 8, 2018 to find out.

That’s the date of the seventh annual “Devoncroft Executive Summit: The Business of Media Technology,” where Belden CEO John Stroup will be take part in a panel of broadcast technology supplier CEOs.

Registration for the 2018 Executive Summit is available here.


The relevant text from Belden’s filing has been pasted in below:

Note 28: Subsequent Events

On February 8, 2018, we acquired a company for a purchase price of $75.8 million, plus we assumed debt of $18.4 million. The acquisition includes a potential earn-out for which we have not yet estimated a fair value. This acquisition was funded with cash on hand.

We are in the preliminary phase of the purchase accounting process, including obtaining third party valuations of certain tangible and intangible assets acquired. As such, the purchase accounting process is incomplete and we cannot provide the required disclosures of the estimated fair value of the assets and liabilities acquired for this business combination.



Related Content:

2018 Devoncroft Executive Summit: The Business of Media Technology

Belden/Grass Valley Acquires Snell Advanced Media

Grass Valley Q4 2017 Revenue Impacted by Revenue Recognition, Predicts Growth for 2018

Broadcast Vendor M&A: Belden Completes Acquisition of Grass Valley, Will Invest $25 Million in Integration of Combined Business

More Broadcast Vendor M&A: Belden Buys Miranda for $350 Million in All-Cash Deal



© Devoncroft Partners 2009-2018.  All Rights Reserved.


Grass Valley Q4 2017 Revenue Impacted by Revenue Recognition, Predicts Growth for 2018

Annual Results, Broadcast technology vendor financials | Posted by Joe Zaller
Feb 06 2018

Belden announced that revenues in its Broadcast Solutions segment were $174.7m, down 16.3% versus the previous year, and down 9.8% compared to the previous quarter.


As per the table above from Belden’s investor presentation, the company’s Belden’s Broadcast Solutions segment includes broadcast stalwart Grass Valley, along with PPC, a provider of components used by cable MSO, and KVM switch provider ThinkLogical.


Q4 2017 Broadcast Revenues Impacted by Revenue Recognition Issues

The company attributed much of the year-over-year revenue shortfall to the negative impact of revenue recognition issues.

“Most of our businesses performed in line with our expectations during the fourth quarter, with the exception of an isolated situation in our Broadcast Solutions segment,” said Belden CEO John Stroup, shown below speaking at the 2017 Devoncroft Media Technology Business Summit.

Belden CEO John Stroup at 2017 Devoncroft Executive Summit

“We had expected to recognize revenue on $36 million of product that was shipped in 2017, but we were unable to do so as a result of technical U.S. GAAP revenue recognition requirements that our team identified during the year-end closing process. We now expect these 2017 shipments to be recognized as $36 million in revenue and $22 million in EBITDA in 2018.”

On the company’s earnings call, Belden Chief Financial Officer Henk Derksen provided additional detail on the accounting issues that prevented the company from recognizing $36 million of broadcast revenue in the quarter: “We expected to recognize revenue on $36 million of orders in our Broadcast segment that shipped prior to the end of 2017. However, we are unable to do so, as a result of technical U.S. GAAP revenue recognition requirements, said Derksen.

These revenue recognition issues appear to be related to the shipment of IP-based systems, which either include or are sold through third-parties. As the industry transitions to IP-based operations for production, playout, and delivery, more and more products (from all suppliers) are likely to involve some sort of third-party, many vendors may begin to face accounting challenges similar to those encountered by Grass Valley in Q4 2017.

Derksen provided additional detail on the revenue recognition shortfall, saying: “[IIP n] certain transactions, our broadcast IT business shipped products through third-party logistics providers, or 3PLs. On all of these shipments, legal title and the risk of loss transferred to the customers at the time of the shipment, and we were entitled to receive payment. However, we did not meet all of the technical delivery criteria for revenue recognition under U.S. GAAP. Clearly, we’re disappointed with this outcome. That said, we are pleased that we identified this matter as part of our year-end closing process. Ultimately, we view this issue as a delay and have increased our 2018 guidance accordingly to reflect an incremental $36 million in revenue and $22 million in EBITDA.”

According to Derksen, these revenues will be recognized over the first three quarter of 2018. “The $36 million that we couldn’t recognize in the fourth quarter and will recognize in 2018 will layer in $15 million in Q1, $15 million in Q2, and $6 million in the third quarter,” said Derksen. “We have to modify some of our terms and conditions with our customers. That will take a little bit of time. So I don’t want you to expect that all the $36 million to reverse completely in Q1.”


Shipments of IP-based Products Accelerate

Despite the accounting issues, the company appears increasingly confident about the transition to IP-based operations.

Stroup said Q4 2017 was Grass Valley’s strongest-ever quarter for sales of IP-based systems, and predicted that IP shipments would accelerate in the future, thanks to the adoption of new standards and increasing custom confidence in IP-based solutions. “We think [the finalization of the SMPTE 2110 standard is] an important development and certainly going to be helpful moving into 2018. We had our strongest quarter ever in IT-based product revenues in the fourth quarter. It was over $5 million. And it was to 36 different customers. So, it’s clear that our customers are getting more confident, more comfortable with the technology. I think they view us as really one of the only solutions that meets the open standard. As we’ve talked about, we have some competitors that have done very well, but their systems and their solutions are far more closed than what we’re offering and what the standard dictates. So, I think that the Grass Valley business, from a product point of view, is very well positioned moving into 2018.”



Positive Outlook for 2018

Belden provided an upbeat outlook for its broadcast business in 2018. Stroup told analysts “I would expect our Broadcast segment to be in that range [3% – 5% organic growth], maybe towards the higher end, because when we report our organic growth in 2018, we’re going to give it based on what our actual revenues were in 2017 versus our actual revenues in 2018. So obviously our Broadcast segment is going to have a lot of tailwind coming into 2018. So I would expect that all of our platforms are going to be somewhere around 3% to 5%. The Broadcast segment may be on the higher end, maybe 5%, maybe a little bit higher given the fact that they have that $36 million of revenue coming into the year.


Full Year 2017 Broadcast Results

For the full year 2017, revenues in the Broadcast Solutions segment was $725.1 million, down 5.8% from $769.6 million in 2016.



Related Content:

Press Release: Belden Reports Results for Fourth Quarter and Full Year 2017

Press Release: Belden Reports Solid Results for Third Quarter 2017



© Devoncroft Partners 2009-2018.  All Rights Reserved.

Vitec Group Updates Segment Reporting for Broadcast Division

Annual Results, broadcast technology market research, Broadcast technology vendor financials | Posted by Josh Stinehour
Feb 05 2018

The Vitec Group, which owns more than a dozen brands in the broadcast industry, released an update of its financial performance through the first half 2017 based on its new segment reporting. 

The change followed the Company’s divestiture of its services business Bexel to NEP.  The new structure offers visibility into the two product groups Vitec sells in the broadcast industry.

As of November 2017, The Vitec Group reports across the following three Divisions:

  • Imaging Solutions contains the assets formerly reported in the Photographic division, which is focused on the professional and consumer photographers.
  • Production Solutions groups Vitec’s more traditional broadcast products, including camera supports, robotic camera systems, prompters, mobile power, lighting, along with the remaining service activities of Camera Corps and The Camera Store.
  • Creative Solutions comprises The Vitec Group’s video transmission systems (Paralinx, Teradek), monitors (smallHD), and camera accessories (Wooden Camera, Offhollywood).

One of the stated goals of the reporting modification is to give greater focus to the fast-growing independent content creator market where the Creative Solutions division has a larger presence.

It is interesting to note nearly all of the assets in Creative Solutions were acquired over the past five years.

Broadcast Operating Segment Results

The restated 2016 and 1H 2017 results illustrate the relative revenue contribution and profitability profiles of the Production Solutions and Creative Solutions divisions.

For full year 2016, Production Solutions represented 72.5% of Broadcast sales or £121.6 million.  Creative Solutions had sales of £45.9 million or 27.5% of Broadcast revenue.

When including an allocation for corporative overhead the operating margin profile for Production Solutions was 10.9% during 2016 and 16.8% for Creative Solutions.

During the first half of 2017 (ending June 30) Production Solutions had sales of £55.7 million (64.3% of Broadcast) and Creative Solutions contributed £30.8 million of revenue (35.7% of Broadcast).

Operating margins (with corporate allocation) for 1H 2017 were 9.5% for Production Solutions and 17.2% for Creative Solutions.

Vitec Group did not provide comparable year-over-year period presentations of the Divisions.  However, even using a straight line estimate, it is reasonable to view the Production Solutions as an approximately flat business (year-over-year) in the first half of 2017, as the second half is usually the stronger portion of the year.  Creative Solutions, in contrast, is experiencing strong growth.  The magnitude of growth is difficult to estimate given the inorganic additions to the division with the closing of the acquisitions of Offhollywood and Wooden Camera.  As a reference point, the 2016 restatement lists £20.4 million of investing activities attributable to the Creative Solutions division.

While growing faster, the Creative Solutions division is also meaningfully more profitable with operating margins in the high teens.  Thus, consistent with The Vitec Group’s stated intentions, this reporting approach provides greater visibility into the higher growth, higher margin Creative Solutions division.

In addition, the restatement of 2016 financial results further highlights the merits of the divestiture of Bexel.  This is not a commentary on the quality of Bexel, but rather an observation about the fundamentally different characteristics of Bexel’s asset and capital intensive business, which contrasts with the remaining product businesses.  Consider that during 2016 – the fourth year in the four year industry cycle – Bexel had revenue of £47.7 million, an adjusted (before impairments and restructuring costs) operating loss of £1.4 million, and capital expenditures of £7.1 million.  (It is appropriate to point out Bexel generated operating cash when adjusting for non-cash items and including rental asset disposals).

Full year 2017 results are scheduled for release on February 22, 2018.

Impact of US Tax Change

In the same release, Vitec offered guidance on the impact of the new Tax Cuts and Jobs Act legislation passed in the United States.  The immediate impact to Vitec is a revaluation lower of its US deferred tax balance by £7.0 million.  This is because the lower US tax rate of 21% (versus 34%) means tax losses have less value in the future.



Related Content:

Vitec Announces Segment Reporting, US Tax and Adjusted Performance Measures



© Devoncroft Partners 2009-2018.  All Rights Reserved.



ATEME Grows 29% in 2017; Hints at Acquisitions

Annual Results, broadcast technology market research, Broadcast technology vendor financials, OTT Video | Posted by Josh Stinehour
Feb 02 2018

Video compression specialist ATEME announced 2017 revenue of €49.6 million (~$61.8M USD), an increase of 29.3% versus full year 2016.  At a constant exchange rate, year-over-year growth was even greater at 32.5%.  

On a quarterly basis, Q4 2017 had revenue of €16.4 million, a 38.3% increase over Q4 2016.

Management called attention to 2017 representing the sixth straight year of revenue growth.  Annual revenue increases averaged 23% per year during 2011-2015, and have accelerated since.  In a related observation (and given the growth stats, perhaps justified), ATEME has adopted the tag line, “the emerging leader of video delivery.”

In its press release, ATEME also highlighted a strong Q4 in the EMEA region and a multi-million software contract with a major US service provider.

Revenue by Geography:

ATEME benefited from growth in all regions during 2017.

  • Revenues for the EMEA region during the year were €18.6 million, a 14.1% increase 2016. As a percentage of total sales, EMEA was 38.4% of revenue during 2017, which compares to 43.5% during 2016.
  • The USA / Canada region contributed revenue of €15.7 million, a 31.4% rise over the year-earlier period. USA / Canada was 32.4% percent of total sales in the period versus 31.9% during 2016.
  • Latin America was responsible for €7.9 million of revenue during 2017, a substantial increase of 90.4% versus 2016. For 2017, Latin America accounted for 16.5% of total sales, compared to 11.2% during 2016.
  • Asia Pacific accounted for €6.1 million of revenue, an increase of 22.3% versus the full year 2016. The Asia Pacific region contributed 12.7% of total sales during 2017, versus 13.4% during 2016. This adds to growth of 80% in 2016.

The growth in the Latin America region was attributed to strong demand for digital terrestrial distribution solutions.


Business Outlook:

Commenting on the 2018 outlook, ATEME President Michel Artieres stated, “The outlook for 2018 remains positive and we aim to deliver further healthy growth in all regions. We will continue to focus on developing or acquiring new solutions aimed at expanding our addressable market beyond the video headend segment, downstream to the distribution network.”  The reference to ‘acquiring new solutions’ may suggest some upcoming corporate initiatives on the part of ATEME.


Related Content:

ATEME Full Year 2017 Results Press Release



© Devoncroft Partners 2009 – 2018. All Rights Reserved.



Avid 2015 Revenue and Profitability Decrease with Continued Transformation

Analysis, Annual Results, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Mar 21 2016

Avid Technology announced full year 2015 results.  Management also provided long-term guidance for financial performance through 2018. Avid Logo_ white background

Total revenue for 2015 was $505.6 million, a decrease of 4.6% versus 2014 revenue.  Product revenue for the year was $336.4 million, a decline of 11.1% against 2014.  Products represented 66.5% of overall revenue in 2015.  Services revenue was $169.2 million, an increase of 11.6% versus the year prior.  Services contributed 33.5% of total revenue for the year.

Net income was $2.4 million or $0.06 per share.  This compares to 2014 net income of $14.7 million, which was $0.38 per share.

Gross margins for 2015 were 60.9%, a slight decline versus the 61.4% from 2014.

Operating income for 2015 was $6.9 million, a decrease of 64.6% versus 2014 operating income.  2015 Operating income included a restructuring cost of $6 million.

R&D expense for the year was $95.8 million, a 6.1% increase over 2014 R&D levels.  As a percentage of total revenue, R&D expenses were 18.9%, compared to 17% of total revenue in 2014.

Sales and marketing costs for 2015 were $122.5 million, representing a 7.8% decline versus 2014 sales and marketing levels.  Sales and marketing expenses were 24.2% of 2015 revenue, a slight decline versus 25.1% of total revenue in 2014.

G&A expense was $74.1 million for 2015, a decline of 8.7% versus the prior year.  Expressed in terms of total revenue, G&A expense was 14.6% of sales in 2015 versus 15.3% in 2014.

When considering the 2015 figures included six months of Orad’s operations, the decline in S&M and G&A illustrates the impact of anticipated cost synergies from the acquisition and Avid’s restructuring initiatives.

There are many one-time expenses and non-cash items in Avid’s income statement results.  To provide a more normalized view of profitability Avid cites adjusted EBITDA, which is defined as operating income plus add-backs for costs attributed to amortization, restructuring, restatements, stock-based compensation, acquisitions, integration activities, and efficiency program costs.  Adjusted EBITDA was 2015 $41.5M, a decline of 26% versus the same figure in 2014.

Cash used in operations for 2015 was $34 million.  The net effect of financing events, capital expenditures, and the Orad acquisition left Avid with $17.9 million of cash at the end of 2015.  The balance sheet does not account for the recent financing initiative announced by Avid in February.

Several factors have combined to complicate Avid’s financial disclosures. Most notable, the restatement in late 2014 introduced a considerable amount of amortized revenue from prior financial periods.  Though this revenue is now recognized in Avid’s income statement, it does not represent any actual cash received from clients.  In other words, it is non-cash revenue with 100% gross margins.  In aggregate, changes in deferred revenue represented a negative cash adjustment (versus net income) of $65 million in 2015 and $51.9 million in 2014.  Adding to this complexity are the effects of recent restructuring initiatives, the impact of the Orad acquisition, and the ongoing transition to a subscription model.

CEO Louis Hernandez, Jr. commented on these challenges during Avid’s earnings call, noting “…I know that it would be nicer if the financial expression were more clear and didn’t have the noise of a couple of the variables, the non-marketed products, the amortization, that pre-2010 revenue or that even the shift to recurring.”

Management is aware of this difficulty and has attempted to introduce new metrics to allow analysts to better understand the transition of the business.

Update on Transformation:

Highlighting the progress was bookings growth of 26% in Q4 2015 driven by the largest transaction in Avid history with Sinclair Broadcast Group and the positive impact of the Orad acquisition.  Bookings related to recurring revenue were approximately 38% of total 2015 bookings, a substantial increase over the 26% from 2014.

Below is a chart from Avid’s investor presentation illustrating the recent positive trend in Avid’s bookings in the context of the Company’s continued transformation.


Management also disclosed several metrics on the adoption of Avid’s MediaCentral platform.  At the end of 2015 MediaCentral had over 32,000 users, a 54% increase above 2014 levels.  More than 25,000 of the users are paying subscribers.  This represents an increase of 400% in paying subscribers since the beginning of 2015.

Business Outlook:

Contained in Avid’s earning release was full year guidance for 2016 along with longer term guidance for 2017 and 2018.  These figures are provided in the below tables taken from Avid’s earnings release.

Commenting on both 2015 performance and the business outlook, Louis Herandez, Jr added, “Avid is in the final stretches of its dramatic transformation and the benefits of Avid’s Platform approach to solving the media industry’s more pressing needs is reflected in both a solid close to 2015 and dramatically improved financial expectations for 2016 and beyond.  We are on track to complete the transformation and position Avid for long term sustainable and profitable growth with an improved financial model.”



Related Content:

Press Release on Avid’s 2015 Financial Results

Presentation on Avid’s 2015 Financial Results



© Devoncroft Partners 2009 – 2016. All Rights Reserved.



After Difficult 2015, Grass Valley Expects Growth in 2016

Analysis, Annual Results, Broadcast technology vendor financials, Quarterly Results | Posted by Josh Stinehour
Feb 22 2016

Belden announced fourth quarter and full year results for 2015.  Belden’s largest division in terms of revenue is its Broadcast Solutions division.  The division includes the operations of Grass Valley along with Belden’s broadcast cable and broadband connectivity businesses. GrassValley_Logo

Broadcast Solutions revenue for the full year 2015 was $900.6 million, a decrease of 1.7% versus 2014 full year results.

EBITDA (Earnings before interest depreciation and amortization) for the division in 2015 was $142.4 million, a 1.4% increase over the 2014 EBITDA of $140.4 million.  EBITDA margin in 2015 was 15.8%, a slight increase against the 15.1% EBITDA margin from 2014.

Q4 2015 Results:

Fourth quarter revenue in 2015 for Broadcast Solutions was $239.5 million, a decrease of 5.4% versus Q4 2014, and a sequential increase of 4.9% versus Q3 2015.  Management cited a stronger U.S. dollar and lower copper prices resulting in a negative impact of approximately $10.2 million on Q4 2015 revenues.  When adjusted for currency, revenues for Broadcast Solutions decreased 1.4% on a year-over-year basis.

On a regional basis, Belden stated Broadcast Solutions revenue in the United States was up 7.4% when compared to Q4 2014. EMEA revenues declined 17% versus Q4 2014.  Management attributed this decline in part to the strong U.S. dollar and lower oil prices.

Belden’s Broadcast Solutions division recorded EBITDA of $46.7 million in Q4 2015, a 5.2% increase versus Q4 2014, and a 33.8% increase against the preceding quarter.

EBITDA margins for the quarter were 19.5%, a 200 basis point increase versus Q4 2015. A weaker Canadian dollar was partly responsible for the increase in profitability.

Belden recognized a $10.5 million restructuring charge for its Broadcast Solution division in the fourth quarter.  For the full year restructuring charges in the Broadcast Solution division were $39.1 million.



On Belden’s earnings call with analyst, CEO John Stroup offered commentary on developments at Grass Valley:  “In addition to the Summer Olympics and U.S. presidential elections, we are excited by the progress made with our comprehensive IP solution. During the quarter, we booked 7 new IP projects and shipped 4 of them. Also we entered 2016 with almost $15 million more backlog than 1 year ago.”.  Later when fielding analyst questions Stroup elaborated on the 2016 prospects for Grass Valley stating, “… if you just take the backlog head start compared to the revenues in ’15, you’ve got almost 4% growth rate there. So it feels to me like we’re on track for growth in 2016 with Grass Valley compared to ’15.”



Related Content:

Press Release: Belden Reports Strong Results for Fourth Quarter and Full Year 2015

Belden Q4 and FY 2015 Investor Presentation



© Devoncroft Partners 2009 – 2016. All Rights Reserved.



Broadcast Vendor M&A: Net Insight Acquires ScheduALL in $14 Million All-Cash Deal

Analysis, Annual Results, broadcast industry trends, broadcast technology market research, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 04 2015

Net Insight announced it has acquired resource scheduling software provider ScheduALL in a $14m all-cash deal.logo-net-insight

The company says the deal will strengthen Net Insight’s “market position in media service and workflow orchestration.” ScheduAll_Logo

Media and workflow orchestration has become an increasingly important (and crowded) area over the past two years, with multiple vendors announcing new initiatives in this area.

This is Net Insight’s first acquisition in more than a decade.  At current exchange rates, the acquisition will consume approximately 40% of Net Insight’s cash balance as of the end of Q2 2015.

For the 2014 financial year, ScheduALL had revenue of $10.6m, approximately 60% of which was recurring. ScheduALL made a profit of $700,000 in 2014.

The implied multiples of the transaction are 1.3x 2014 revenue and 20x 2014 net profit.  In comparison, Net Insight trades in the public markets (as of 9/2) at 1.6x revenue and 25x earnings.  On both measures, the acquisition is accretive.

To put the acquisition’s impact in proper context, consider Net Insight has grown revenues since 2010 by approximately $10 million USD, which is roughly the acquired revenue from ScheduALL.

“This is a perfect match for Net Insight,” said company CEO Fredrik Tumegard. “We are not only executing on our strategy, we are also taking a giant leap towards our vision of creating a unified and global media market place for both service providers and media companies.”

Half of ScheduALL’s revenue in 2014 was from North America.  This will provide greater exposure to the North American market for Net Insight, which generated 44% of its revenue from the Americas (including South America) in fiscal 2014.

Adding to the financial benefits are the straightforward cost synergies from combining duplicative sales and marketing activities including trade shows.  No guidance was provided in the press release on the potential for cost synergies.



Related Content:

Press Release:  Net Insight Acquires US Software Company ScheduAll



© Devoncroft Partners 2009-2015. All Rights Reserved.



Strong Sales in Americas Drives Orad Revenue 27 Percent Higher in 2014

Annual Results, Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 10 2015


Graphics and media asset management (MAM) provider Orad reported that its revenue for the fourth quarter of 2014 was $10.6m, an increase of 21.7% versus the same period a year ago, and up 1% versus the previous quarter.

Product revenue in Q4 2014 was $8.2m, or 78% of total revenue, an increase of 53.4% versus the 4th quarter of last year when product sales were $5.4m, or 61.9% of total revenue.

Service revenue in Q4 2014 was $2.3m, or 22% of total revenue, a decline of 29.7% versus the 4th quarter of last year when service revenues were $3.3m, or 38.1% of total revenue.

Net income for the quarter was $1.1m versus a net profit of $200,000 during the same period a year ago, and a net profit of $800,000 last quarter.

Gross margins for the quarter were 69.9%, versus 68.6% last year, and 71.1% last quarter.

Operating income for the quarter was $900,000, versus an operating loss of $1.5m during the second quarter of 2013, and operating income of $800,000 last quarter.

Cash, cash equivalents and restricted cash at the end of  December 2014 were $10.4m, compared to $9.1m at the end of September 2014, and compared to $5.7m at the end of December 2013.


Full Year 2014 Results

For the full year 2014, Orad’s revenue was $40.5m, up 27.3% versus 2013.

Revenue from Europe was $19.2m, up 38.2% versus 2013.  Europe accounted for 47.3% of total 2014 revenue.  In 2013, revenue from Europe was $13.86m, or 43.6% of total revenue.

Revenue from Asia was $6.5m, a decline of 5.7% versus 2013.  Asia accounted for 16% of total 2014 revenue.  In 2013, revenue from Asia was $6.9m, or 21.6% of total revenue.

Revenue from the Americas was $14.3m, an increase of 44.5% versus 2013. The Americas accounted for 35.3% of total 2014 revenue.  In 2013, revenue from the Americas was $9.9m, or 31.1% of total revenue.

Product sales for year were $31.3m, an increase of 31.5% versus 2013.  Product sales accounted for 77.2% of total revenue in 2014, up from 74.8% in 2013.

Service revenue for 2014 was $9.2m, up 14.9% versus 2013. Service revenue accounted for 22.8% of total revenue in 2014, compared to 25,2% in 2013.

Operating income for 2014 was $4.36m, compared to a loss of $1.6m in 2013.

Net income for 2014 was $3.4m, compared to a net loss of $1.9m in 2013.

Gross Margins for 2014 were 69.7% up from 66.6% in 2013.

Operating expenses for the year were up across the board.

R&D expenses for 2014 were $6.1m, up 3.5% versus 2013. R&D expenses accounted for 15.1% of total revenue in 2014, compared to 18.6% of total revenue in 2013

Sales & marketing expenses for 2014 were $13.8m, up 4.5% versus 2013. Sales & marketing &D expenses accounted for 34.2% of total revenue in 2014, compared to 41.6% of total revenue in 2013

G&A expenses for 2014 were $3.9m, up 9.7% versus 2013. G&A &D expenses accounted for 9.7% of total revenue in 2014, compared to 11.4% of total revenue in 2013

“We are pleased to announce that 2014 has been our most successful year in many aspects,” said Orad CEO Avi Sharir. “Profits have continued to increase, reaching the highest level in the company’s history. Our operating income for 2014 was 10.8% from revenues, far better than our outlook of 8%-10%. We have succeeded in meeting these impressive results thanks to our strong increase in revenues resulting from our wide range of products and solutions, our extensive geographic presence and as a result of our increased efficiency. Our strategy to offer customers comprehensive solutions was very successful with several very significant sales. Orad’s solutions’ offering brings added value to the customer by simplifying his workflow, while offering a one stop shop for the entire solution. Our servers took the forefront this year, penetrating new markets. We are seeing increased interest from existing and new customers, and given the size of the potential market, we are aiming to increase our market share. Our strategy to strengthen our presence in the North American market in 2014 proved successful, doubling our bookings compared to 2013.



“I am confident that Orad will continue in 2015 in the same direction as we continue to invest in cutting edge new technologies and increase our presence in existing and new markets,” said Sharir.



Related Links:

Press Release: Orad Reports Financial Results for the Fourth Quarter and for the for the Full Year of 2014

Orad’s Revenue Jumps 40.7 Percent in Q2 2014



© Devoncroft Partners 2009 – 2015. All Rights Reserved.



ChyronHego Taken Private by PE Firm, Delisted from NASDAQ

Annual Results, Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Mar 09 2015

ChyronHego LogoVector Capital has completed the previously announced $120m deal to acquire ChyronHego and take it private.

Under the terms of the deal, ChyronHego stockholders will receive $2.82 per share in cash, and ChyronHego common stock has ceased trading on the NASDAQ Stock Exchange.

According the definitive proxy statement, the purchase of ChyronHego will be funded by a combination of equity and debt financing.

Equity financing will be provided by Vector Capital and its affiliates, who have committed to pay approximately $49.3m towards the acquisition, and related expenses.

Debt financing is being provided by Silicon Valley Bank (SVB) and Apollo Investment Corporation (Apollo) in the form of a $50m senior secured five-year term loan, which is expected have interest of “either (i) the Eurodollar Base Rate plus 5.625% (subject to a 1.0% floor with respect to the Eurodollar Base Rate), or (ii) at the Adjusted Base Rate (defined as the highest of (w) 2.75% of (x) the Wall Street Journal Prime Rate and (y) the Federal Funds Rate plus 0.50%) plus 3.875%.”

Separately, SVB and Apollo have also providing a $7m senior secured revolving credit facility that has the same terms as the senior five-year term loan. ChyronHego will use the revolving credit facility for working capital and capital expenditures and other general corporate purposes.

In its last quarter as a public company (Q3 2014), ChyronHego posted a net loss of $2.6m on revenue of $14m.

During the first nine months of 2014, ChryronHego posted a net loss of $2.8m on revenue of $43.3m.

For the trailing twelve months (TTM) ended September 30, 2014, ChyronHego had revenue of $58m, comprised of $27.2m of product revenue and $30.8m of service revenue.

In a securities filing, ChyronHego said it ended 2014 with approximately $5.4m in cash and equivalents; and projected that its revenue for the full year 2014 would be $59m.

“We are delighted to be working with Vector Capital,” said Johan Apel, President and Chief Executive at ChyronHego. “As a private company, ChyronHego will be ideally positioned to reinforce the company’s leadership in news, sports and live production solutions. The Vector team has a strong track record of success in acquiring and operating innovative technology companies, and our partnership with them will enable us to reach new levels of scale, technological capabilities and customer service.”

David Fishman, Managing Director at Vector Capital, who will join ChyronHego’s Board of Directors, said: “We believe that as a private company with Vector’s financial support ChyronHego will be well positioned to capitalize on the significant opportunities in broadcast graphics creation, play-out and real time data visualization. Over time, we are confident the company will be well positioned to capitalize on the exciting trends in the sports, news and live television markets.”

“We welcome ChyronHego to the Vector family,” said Nick Lukens, Vice President at Vector. “We are very excited to roll up our sleeves and get to work with the talented team at ChyronHego. Through our partnership with management, we are committed to strengthening and expanding ChyronHego’s market leading product and service capabilities.”



Related Content:

Press Release: Vector Capital Completes Acquisition of ChyronHego

Certificate of Merger

ChyronHego Makes Revealing Disclosures About “Going-Private” Transaction

Broadcast Vendor M&A: ChyronHego to be Taken Private by Vector Capital in $114 Million Deal

ChyronHego 8-K: Additional Disclosures Regarding Vector Transactions

ChyronHego: Definitive Proxy Statement on Vector Take-Private Transaction

ChyronHego Investor Presentation March 2014

ChyronHego Investor FAQ and Introduction to Vector Capital

Agreement and Plan of Merger: ChyronHego Corporation, Vector CH Holdings (Cayman), L.P., And CH Merger Sub, Inc.

ChyronHego SEC Filing: Entry into a Material Definitive Agreement with Vector Capital

ChyronHego One Year Stock Price Chart

Broadcast Vendor M&A: Vizrt to be Taken Private in $374 Million All-Cash Deal



© Devoncroft Partners 2009 – 2015. All Rights Reserved.



NeuLion Revenue Increases 17 Percent in Q4 2014

Annual Results, Broadcaster Financial Results | Posted by Joe Zaller
Mar 04 2015


Online video platform provider NeuLion reported that its revenue for the fourth quarter of 2014 was $16.5m, an increase of 17% versus the same period a year ago, and up 32% versus the previous quarter.

Consolidated net income for the quarter was $1.6m, or $0.01 per basic and diluted share, an increase of up from $1.1m last year, and $0.2m last quarter.

Operating income for the quarter was $1.8m, up from $1.1m last year, and $0.2m last quarter

Company CEO Kanaan Jemili said the NeiLion’s improved performance for the quarter reflects the company’s “continued gains in volume and usage from new and existing customers and demonstrating the earnings power of our business model.”


On a segment basis:

  • Revenue from Pro Sports was $7.9m, an increase of 18% versus the same period a year ago, and an increase of 52% versus the previous quarter. The company attributed the year-over-year increase in pro sports revenue to growth in variable subscription fees.
  • College Sports revenue was $3.6m, down 8% versus the same period a year ago, up 16.1% versus the previous quarter. The company attributed the year-over-year decline college sports revenue to the loss of the company’s ability to sell subscriptions for certain colleges, as colleges move to consolidate into conferences and sports networks
  • Revenue from TV Everywhere was $5m, up 43% versus the same period a year ago, and up 47.1% versus the previous quarter.  The company said TV Everywhere revenue increased because of increases in monthly fixed fees and variable usage fees.


Expenses during the quarter were up across the board.  Selling, general and administrative expenses, including stock-based compensation, were $8m, an increase of 27%, versus the same period a year ago. Including in selling, general and administrative costs were approximately $0.8 million of acquisition-related expenses and $0.2 million in costs associated with compliance with Section 404 of the Sarbanes-Oxley Act.

Research and development expenses in the fourth quarter were $2.1m, an increase of 5%, compared to the fourth quarter of 2013.


Full year 2014 Results

NeuLion’s revenue for the full year 2014 was $55.5m, up 18% versus the previous year.

Consolidated net income for the full year 2014 was $3.6m, or $0.01 per basic and diluted share, compared to a net loss of $2.3m in 2013.

Full year 2014 operating income for the quarter was $3.5m, versus an operating loss of $1.6m in 2013.


NeuLion CEO Kanaan Jemili said the company’s improved performance for the quarter reflects the company’s “continued gains in volume and usage from new and existing customers and demonstrating the earnings power of our business model.”

“With the acquisition of DivX, we have entered 2015 excited about our expanded set of opportunities globally to continue scaling the business and to seize leadership from both a technology platform and consumer experience perspective in the fast-growing online video market,” added Dr. Jemili. “We are intently focused on enlarging our customer base of both sports and entertainment content owners and consumer electronics manufacturers while continuing to expand relationships with our established customers. As adoption of ultra HD/4K video and Over-the-Top services accelerates, our end-to-end solution offerings, which enable digital content management, distribution and monetization, perfectly position NeuLion to deliver high quality on-demand and live interactive digital content anywhere, on any device,” concluded Dr. Jemili.



Related Content:

Press Release: NeuLion Reports 22% Year-Over-Year Increase in Third Quarter Revenue to $12.2 Million

NeuLion Completes Acquisition of DivX

Broadcast Vendor M&A: Rovi Sells DivX and MainConcept to Parallax Capital and StepStone Group for $75 Million

Rovi – Parallax Capital: DivX Purchase Agreement

Press Release: Rovi Announces Sale of DivX and MainConcept Businesses

Press Release: Parallax Capital Partners and StepStone Group to Acquire DivX

Rovi to buy Sonic for $720 million

Sonic Solutions to buy DivX in $323M bid to become digital media leader

Sonic Solutions Integrates Newly Acquired MainConcept, Forms New Pro Technology Division



© Devoncroft Partners 2009 – 2015. All Rights Reserved.



%d bloggers like this: