Posts Tagged ‘Chyron’

ChyronHego CEO to Step Down at End of 2013

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Sep 04 2013

Michael Wellesley-Wesley, who has served as CEO of Chyron (now ChyronHego) for the past 10 years, will retire at the end of 2013, when his current employment agreement expires.  He will remain on the company’s board of directors.

Wellesley-Wesley will be replaced as CEO by current ChyronHego president Johan Apel, who was the chairman and CEO of Hego AB prior to Chyron’s merger with Hego earlier this year.

“The recent completion of the combination of Chyron and Hego unites two pioneering companies to create a global leader in broadcast graphics creation, playout and real-time data visualization,” said Wellesley-Wesley. “This is a truly transformative leap forward, and it presents an appropriate opportunity to define an orderly succession whereby the leadership responsibilities for the combined company transfer to Johan Apel. Johan is superbly well qualified to develop and execute the vision, the strategies and operating concepts for ChyronHego in ways that will allow us to simultaneously address the evolving needs of customers and the expectations of our shareholders.”

According to his most recent employment contract, Wellesley-Wesley receives a base salary of $482,850 per year, as well as incentive bonus.

Wellesley-Wesley is also eligible for bonus payments under Chyron’s 2013 Management Incentive Compensation Plan, which is triggered if the company achieves certain GAAP revenue and budgeted non-GAAP cash flow targets. According to this plan Wellesley-Wesley is eligible to receive up to 70% of his base salary, or $337,995, if both targets are met at the 100% level.  If these targets are exceeded, by 25% or more the payout will increase by an additional 50 percent.

In August 2013, the company disclosed that during the first half of fiscal 2013, excluding the results of operations for Hego, which was acquired on May 22, 2013, Chyron achieved 106% of the target first half of 2013 GAAP-basis revenues objective and achieved 366% of the target first half of 2013 non-GAAP cash flow objective.  As a result, Wellesley-Wesley “earned an incentive compensation award of $221,231, of which the company remitted payroll withholding taxes on his behalf of $91,191 and paid him the balance of $130,040 in company common stock, based on the August 6, 2013 closing market price of $1.59 per share, resulting in the issuance of 81,786 shares.”

At that same time, Chyron terminated the 2013 Management Incentive Compensation Plan, and published a new management incentive compensation plan for the second half of 2013.  This was done to include new executive officers and management and align the interests of all members of management, including certain members of management that became executive officers of the Company upon the consummation of the business combination with Hego during the second quarter of 2013.

The targets for the new plan are also based on “budgeted GAAP-basis revenues for the second half of the fiscal year ending December 31, 2013, and budgeted Non-GAAP cash flows from operating activities for the second half of the fiscal year ending December 31, 2013.

If both targets are achieved, Wellesley-Wesley is eligible for 70% of his base salary, or $168,998 (at 100% achievement of both performance conditions).

Chyron reported a net loss of $2.1m in the second quarter of 2013 on revenue of $10.7m, up 39% versus the same period a year ago, and up 34% versus the previous quarter.

The company’s net loss and operating loss in the second quarter of 2013 were both impacted by transaction costs associated with Chyron’s merger with Hego AB. The company says that when one-time costs,  including Hego merger-related expenses, restructuring costs and a valuation adjustment for contingent consideration related to the Hego merger in second quarter results, it posted net income of $800,000, and an operating profit of $900,000.

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Related Content:

Press Release: Press Release: ChyronHego CEO Michael Wellesley-Wesley to Retire Effective December 31, 2013; Board Selects Johan Apel as Successor

Michael Wellesley-Wesley Employment Agreement with Chyron Corporation

Chyron Corporation: 2013 Management Incentive Compensation Plan

ChyronHego Corporation Second Half of 2013 Management Incentive Compensation Plan

ChyronHego Avoids NASDAQ Delisting as Shareholder Equity Rises After Merger

Hego Merger Drives 39 Percent Revenue Increase for Chyron in Q2 2013

Chyron – Hego Stock Purchase Agreement

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Michael Wellesley-Wesley Change in Control Agreement – May 23 2013

Michael Wellesley-Wesley Change in Control Agreement – November 19, 2012

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© Devoncroft Partners 2009 – 2013. All Rights Reserved.

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ChyronHego Avoids NASDAQ Delisting as Shareholder Equity Rises After Merger

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Aug 13 2013

ChyronHego, said in a regulatory filing that the company believes that it has regained compliance with NASDAQ Listing Rule 5450(b)(1)(A), which requires companies listed on the NASDAQ Global Market to maintain a minimum of $10,000,000 in stockholders’ equity.

On August 9, 2013, Chyron received a letter from NASDAQ stating that the Exchange has determined Chyron now complies with the continued listing requirement for shareholders’ equity, subject to the Chyron providing evidence of its compliance upon filing its quarterly report on Form 10-Q for the quarter ended June 30, 2013.

This notification formally puts to rest an issue that Chyron has been dealing with for the past six months.

In March 2013, Chyron received notice of potential delisting from NASDAQ because its stockholder’s equity has fallen below the minimum $10m threshold set by rules of the Exchange.

At that time, Chyron explained that its stockholder’s equity fell below the $10m threshold at the end of 2012 because it took a $19.5m accounting charge against deferred tax assets. Because this allowance reduced the company’s shareholders’ equity by $19.5m, Chyron company ended the year 2012 with shareholders’ equity of about $1.9m, which put it in violation of NASDAQ’s listing requirement.

In accordance with NASDAQ Listing Rules, Chyron had 45 calendar days from the date of the notice to submit to NASDAQ a plan to regain compliance with its listing requirement.

In April 2013 Chyron submitted to NASDAQ its plan to regain compliance with the minimum stockholders’ equity requirement. NASDAQ granted Chyron an extension to regain compliance with the stockholders’ equity requirement until August 15, 2013, by which date the company will be required to file its quarterly report on Form 10-Q for the quarter ended June 30, 2013.

A key factor in Chyron’s plan to regain compliance was the company’s then-proposed merger with Hego, which has now been successfully completed.

Under the terms of the Chyron – Hego Stock Purchase Agreement Chyron paid $1,000 in cash and issued 12,199,431 shares of its common stock to the former Hego stockholders in exchange for all of the issued and outstanding shares of Hego. The issuance of the 12,199,431 shares, at a value of $1.36 per share at the closing of the transaction, resulted in an increase in the Company’s shareholders’ equity of approximately $16.6m.

The company says that as a result of the Hego merger, and following the release of Chyron’s Q2 2013 results, its shareholders’ equity was approximately $17.9m June 30, 2013, comfortable above the minimum threshold set by NASDAQ.

Following the announcement of its Q2 2013 earnings, Chyron filed an 8-K with regulators that disclosing that it has received a letter NASDAQ  stating that once the company files its Form 10-Q for the period ended June 30, 2013, it will officially be compliant with all NASDAQ listing requirements.

In the same filing, Chyron published its management incentive compensation plan for the second half of 2013.  The company says that it terminated its previous 2013 incentive plan and adopted a new plan that include new executive officers and management and aligns the interests of all members of management, including certain members of management that became executive officers of the Company upon the consummation of the business combination with Hego during the second quarter of 2013.

On Chyron’s Q2 2013 earnings call, company CEO Michael Wellesley-Wesley briefly discussed the delisting, saying “As instructed by NASDAQ, we notified the SEC directly and, thus, the NASDAQ indirectly this morning via a current report on Form 8-K that was filed at the SEC before market opened of our compliance with NASDAQ’s minimum shareholders equity requirement and we now consider the matter closed.”

Wellesley-Wesley has long assured shareholders that the company would do whatever it takes to avoid delisting.

On the company’s Q1 2013 earnings call in May 2013 he said: “The bottom line is this – these shares are not going to be delisted. There are all kinds of ways that we can get back in compliance. We’ll make sure that we don’t get delisted.”

With this latest filing, it looks as though Wellesley-Wesley has made good on his promise to ChyronHego shareholders.

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Related Content:

Chyron 8-K Filing: Notice of Renewed Compliance with NASDAQ Listing Rule 5450(b)(1)(A)

Chyron 8-K Filing: Company believes it has regained compliance with NASDAQ’s shareholders’ equity requirement

ChyronHego Corporation: Second Half of 2013 Management Incentive Compensation Plan

Hego Merger Drives 39 Percent Revenue Increase for Chyron in Q2 2013

Chyron Q2 2013 Earnings Call Transcript

Chyron Revenue Up 2 Percent in Q1 2013, Gives Update on Merger, Layoffs, and Potential NASDAQ Delisting

Chyron Lays Off 20 Employees, Says it will Save $3 Million per Year

Chyron Receives Another Delisting Notice From NASDAQ

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Chyron – Hego Stock Purchase Agreement

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Hego Merger Drives 39 Percent Revenue Increase for Chyron in Q2 2013

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Aug 12 2013

Broadcast graphics specialist Chyron reported that its revenue for the second quarter of 2013 was $10.7m, up 39% versus the same period a year ago, and up 34% versus the previous quarter.

These results include revenue from Hego, which was acquired by Chyron, from May 22, 2013 through June 30, 2013.

Excluding the $2.3m contribution from the sales of Hego products and services, the company’s revenue was up $700,000 or 9 percent, versus the same period a year ago.

The net loss for the quarter was $2.1m, or $0.09 per share, compared to a net loss of $630,000 or $0.04 per share last year, and a net loss of $921,000, or $0.05 last quarter (Chyron issued new share as part of the Hego merger process).

The operating loss for the second quarter of 2013 was $1.9m, compared to an operating loss of $1.1m for the same period last year, and an operating loss of $810,000 last quarter.

The company’s net loss and operating loss were both impacted by transaction costs associated with Chyron’s merger with Hego AB. The company says that when one-time costs,  including Hego merger-related expenses, restructuring costs and a valuation adjustment for contingent consideration related to the Hego merger in second quarter results, it posted net income of $800,000, and an operating profit of $900,000.

Service revenue in the second quarter of 2013 was $3.97m in the quarter, or 37% or total revenue.  Product revenue in the quarter was $6.74m.

Because the company did not break out the percentage of product versus service revenue from Hego, it is difficult to do a direct comparison with previous periods.

In the first quarter of 2013, the company’s revenue was split 75%/25% in favor of product sales.

Gross margins for the quarter were 68.4%, down from 69.2% last year, and down from 71% last quarter.

Operating expenses for the second quarter of 2013 were $9.2m. up 44% versus the same period a year ago, and up  41% versus the previous quarter.

R&D costs in the quarter were $2.3m, up 21% versus the same quarter last year, primarily due to the inclusion of $400,000 in Hego R&D expenses.

Sales and marketing expenses were $3.3m, down 6% versus the second quarter 2012, primarily due to inclusion of $200,000 of Hego costs, and $20,000 in expense from amortization of intangibles from the Hego merger, offset by a $600,000 decrease in Chyron &M expenses.

G&A expenses in the quarter were $3.6m, an increase 260% versus last year.  The company attributed the big jump in G&A coasts to inclusion of $300,000 in Hego G&A expenses and a $2.3m increase in Chyron G&A expenses, including $1.6m of merger-related expenses, severance costs of $600,000, and equity-based compensation of $400,000.

The company ended the quarter with $2.19m in cash, down from $2.3m last quarter.

“The second quarter was a pivotal quarter in the formation of ChyronHego,” said ChyronHego CEO Michael Wellesley-Wesley. “Having effected an extensive rebranding, we presented the combined company to our customers at the NAB tradeshow in April and received a very encouraging response. In early May, 2013, we eliminated a number of Chyron positions primarily in the United States, thus completing a restructuring initiative that began in 2012, and on May 22, 2013, we formally completed our merger with Hego AB to form ChyronHego. We’ve now been conducting business as a brand new company for just over two months. We have won significant new business in terms of product sales with BT Sport and ITV Regional News in the UK and major US and LatAm networks, as well as with US TV Station Groups. In the area of multi-year sports production services contracts, Hego announced its largest ever contract with the German Soccer League, during the quarter. I am optimistic regarding our business prospects for the second half of 2013.

“The strategic thinking underpinning the creation of ChyronHego is to create a market leading company in the fields of TV Graphics, Data Visualization and Production Services for ‘Live’ TV and Online News and Sports production. This merger creates a strong, global graphics company that is committed to innovation and to evolving existing products and services to support our customers in the future. Our second quarter financial results were inevitably impacted by one-time cash and non-cash expenses associated with the transaction. We anticipate that the compelling financial logic for the transaction will become clearer as we progress through the second half of 2013 and into 2014.”

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Related Content:

Press Release: ChyronHego Reports Financial Results for the Second Quarter Ended June 30, 2013

Previous Quarter: Chyron Revenue Up 2 Percent in Q1 2013, Gives Update on Merger, Layoffs, and Potential NASDAQ Delisting

Previous Year: Chyron Revenue Declines 18 Percent in Q2 2012

Chyron Lays Off 20 Employees, Says it will Save $3 Million per Year

Chyron Receives Another Delisting Notice From NASDAQ

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Chyron – Hego Stock Purchase Agreement

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Chyron Revenue Up 2 Percent in Q1 2013, Gives Update on Merger, Layoffs, and Potential NASDAQ Delisting

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
May 10 2013

Broadcast graphics specialist Chyron reported that its revenue for the first quarter of 2013 was $8.01m, up 2% versus the same period a year ago, and up 8% versus the previous quarter.

The net loss for the quarter was $921,000, or $0.05 per share, compared to a net loss of $951,000, or $0.06 per share last year, and a net loss of $20m, or $1.17 per share, last quarter, when the company took a $19.5m valuation allowance against the company’s deferred tax assets (see below for implications).

The operating loss for the first quarter of 2013 was $810,000, compared to an operating loss of $1.074m last year, and an operating loss of $570,000 last quarter.

The company’s net loss and operating loss were both impacted by transaction costs associated with Chyron’s pending merger with Hego AB, which was announced in March 2013. Excluding Hego transaction costs, net loss would have been $220,000, and the operating loss would have been $110,000.

The company’s service revenue, which includes the sales of its AXIS cloud-based graphics service, maintenance agreements, training and creative services was $2.04m in the quarter, or 25% or total revenue. This is a decrease of 2% versus the same period a year ago, and a decrease of 7% versus the previous quarter.  The company the lower service revenue to lower revenues from training and other professional services offset by increased sales of software and hardware maintenance contracts for broadcast graphics products.

Product revenue in the quarter was $5.97m (75% of total revenue), an increase of 3% versus Q1 2012, and an increase of 15% versus last quarter.  The company said it experienced a slight increase in product revenue as a result of an improvement in market share in Asia and a major program upgrade in our European market. However, sales fell in North America, due to price competition and weak demand. Sales in Latin America also declined during the quarter.

Gross margins for the quarter were 71%, up from 70% last year, and up from 69.1% last quarter.

Operating expenses for the first quarter of 2013 were $6.53, up 1% compared to last year, and up 15% versus the previous quarter. Excluding Hego transaction costs, operating expenses would have been $5.84m, or 12% lower than the same period a year ago.

Last quarter, Chyron combined its reporting of sales and G&A expenses.  This quarter it did not break out its expenses at all, making it difficult to determine the full impact of the cost-cutting exercise that the company embarked upon several quarters ago.  However, the company did say that its expenses in both research and development and sales and marketing, were essentially flat with the previous year when Hego transaction costs are excluded.

The company ended the quarter with $2.3m in cash, versus $2.4m last quarter.

 

Update on Latest Round of Staff Layoffs

Prior to the release of its Q1 2013 earnings, Chyron disclosed that it has cut the size of its workforce by 20 employees as part of a reorganization plan designed to “reduce operating expenses while maintaining its focus on strategic initiatives.”

The company says that it will take a charge of approximately $950,000 in Q2 2013 to cover the cost of the staff reduction, and that these actions will result in savings of approximately $3m on an annualized basis, beginning in the third quarter of 2013.

Chyron has reduced the size of its employee base by more than 30% since the end of Q1 2012.  At that time, the company had 126 employees.  There were 107 employees at the end of Q1 2013; and there are now 86 employees following the latest round of staff cuts.

Chyron CEO Michael Wellesley-Wesley told investors that the layoffs came after “eight weeks of very, very rigorous studying and discussion as to where these changes should be made,” and that the cuts were made “across the board.”

According to Wellesley-Wesley, the only departments not impacted by the layoffs were the company’s customer service department and customer-facing product specialists. Sales, engineering, internal administration, and “quite a layer of mid and senior management figures were affected,” he said.

The company will gain an additional 90 – 100 full-time employees following the completion of its pending merger with Hego AB.

 

Update on Potential Nasdaq Delisting:

In March 2013, Chyron received a letter from The NASDAQ Stock Market notifying the company that it is no longer in compliance with the minimum stockholders’ equity requirement for continued listing on the NASDAQ Global Market because its stockholder’s equity has fallen below the minimum $10m threshold set by NASDAQ Listing Rule 5450(b)(1)(A).

If it does not regain compliance with the Rule, Chyron’s shares could be delisted from Nasdaq.

On the company’s earnings call, Wellesley-Wesley said that the company’s stockholders equity fell below this level at the end of the previous quarter as the result of the company taking a $19.5m valuation allowance against the company’s deferred tax assets (described above).

Wellesley-Wesley said that because this allowance reduced the company’s shareholders’ equity by $19.5m, the company ended the year 2012 with shareholders’ equity of about $1.9m, which put it in violation of Nasdaq’s listing requirement.

Wellesley-Wesley said the company has filed a plan of compliance with Nasdaq, and that a primary element of this plan is the company’s proposed merger with Hego, which the company believes will bring with it enough shareholders’ equity to bring the company’s total about $10m.

However, Wellesley-Wesley cautioned that regaining compliance with Rule 5450(b)(1)(A) was not a certainty because of additional one-time charges will be recorded in the second quarter of 2013.  These include a charge of approximately $950,000 for the headcount reduction that the company enacted at the beginning of May 2013,  and a second charge of approximately $1.3m due to the early vesting of equity awards upon the closing of  the Hego transaction.

Nevertheless, Wellesley-Wesley assured shareholders: “The bottom line is this – these shares are not going to be delisted. There are all kinds of ways that we can get back in compliance. We’ll make sure that we don’t get delisted.”

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Related Content:

Press Release: Chyron Reports Financial Results for the First Quarter 2013

Previous Quarter: Chyron Posts Another Loss in Q4 2012 as Revenue Continues to Decline

Previous Year: Revenue and Losses Up at Chyron in Q1 2012

Chyron Lays Off 20 Employees, Says it will Save $3 Million per Year

Chyron Receives Another Delisting Notice From NASDAQ

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Chyron – Hego Stock Purchase Agreement

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Chyron Lays Off 20 Employees, Says it will Save $3 Million per Year

broadcast technology market research | Posted by Joe Zaller
May 08 2013

Broadcast Graphics specialist Chyron Corporation said it has cut the size of its workforce by 20 employees as part of a reorganization plan designed to “reduce operating expenses while maintaining its focus on strategic initiatives.”

The company estimates that it will save approximately $3m on an annualized basis as the result of the layoffs, beginning in the third quarter of 2013.

All terminated employees will receive severance pay and benefits, as well as an adjustment in the terms of their stock option and/or restricted stock unit (“RSU”) equity awards outstanding on their termination date. The affected employees’ RSU awards will be modified to state that they will vest on June 24, 2013 if the impacted employee signs a separation agreement from the company.

The company says that expenses for severance, benefits and changes in equity awards will be approximately $950,000, with severance benefits accounting for about $600,000, and costs relating to the changes in the equity awards making up the remainder.

These charges will be recorded as an expense in Q2 2013.

These new staff cuts continues the trend that stated in Q3 2013, when Chyron appeared to shift from its previous strategy of increasing engineering, sales, and marketing expenses in anticipation of increased revenue from both new products and cyclical spending from broadcasters gearing up for the 2012 Olympics and presidential elections.

In anticipation  of a strong 2012 Chyron increased its spending across the board, and by the first quarter of 2012 the company’s operating expenses had jumped 20% versus the previous year, including 31% y/y increase in sales and marketing costs, and a 19% y/y increase in R&D spending.

However, when the anticipated new revenues had not materialized by the third quarter of 2012, Chyron CEO Michael Wellesley-Wesley told investors on the company’s Q3 2012 earnings call: “I can assure you that we’ve taken and will continue to take the appropriate steps to align our operating expenses with the current business climate.”  At that time, Wellesley-Wesley said the company had scaled back investments in product development and that the company would also be reducing headcount.  On the company’s Q3 2012 earnings call Wellesley-Wesley told analysts “about 60% of our costs are related directly to people and so it’s difficult to make meaningful reductions in expense — operating expenses — without addressing that fact. The steps we’ve taken will certainly reduce OpEx by 5% or more going forward and you will begin to see the real impact of that take effect in Q1 next year.”

With the announcement of the latest round of layoffs, Chyron is now saying that the impact of these additional cuts will begin to materialize in Q3 2013.

For the full year 2012, Chyron had revenue of $30.2m, down 4% versus 2011, and recorded a net loss of $22.3m, or $1.31 per share. $19.5m of the company’s net loss was valuation allowance against the company’s deferred tax assets.

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Related Content:

Chyron 8K Filing: Discloses Staff Reduction

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Chyron Posts Another Loss in Q4 2012 as Revenue Continues to Decline

Chyron Cuts Expenses as Revenue Declines 3 Percent in Q3 2012

Chyron Q3 2012 Earnings Call Transcript

 

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Avid Receives Notice of Potential Delisting From NASDAQ for Failure to Submit 10-K Filing

Broadcast technology vendor financials, SEC Filings | Posted by Joe Zaller
Mar 21 2013

Avid said that it received notification from NASDAQ that, due to the delay in the filing of its annual 10-K report, the company no longer complies with NASDAQ Marketplace Rule 5250(c)(1), which requires timely filing of periodic reports with the SEC.

Failure to comply with Rule 5250(c)(1) could result in the delisting of Avid’s shares from the NASDAQ Global Select Market.

Avid said the notification was expected, and that the notice “has no immediate effect on the listing of its stock” on the NASDAQ market.

In February 2013, Avid announced that it would delay the release of its Q4 and full-year 2012 results in order “to provide additional time for the company to evaluate its current and historical accounting treatment related to bug fixes, upgrades and enhancements to certain products which the company has provided to certain customers.”  The announcement was made about two weeks after Avid said it had named Louis Hernandez to replace Gary Greenfield as the company’s president and CEO.

The company has now revealed that it has been conducting a forensic accounting process, the primary focus of which has been to determine whether certain software updates that were previously classified as “bug fixes” actually meet the definition of post-contract customer support under the rules of US GAAP.  Avid has not disclosed the size and scope of these charges, but it appears that if the company is successful in its efforts, it will be able to re-classify these costs and any associated revenue as customer support.

Avid says it is “working diligently to complete the review and continues to focus its efforts on completing the Form 10-K filing as soon as possible,” and that it intends to submit a plan to NASDAQ staff as to how it intends to regain compliance with continued listing requirements.

Under NASDAQ’s rules, the company has until May 20, 2013 to submit this plan.  If NASDAQ accepts Avid’s plan, the company expects to have up to 180 calendar days from the initial due date for the Form 10-K, or until September 16, 2013, to regain compliance. If Avid’s plan is not accepted, Avid says it will have the opportunity to appeal that decision to a NASDAQ Hearings Panel.

Avid says that during this evaluation, it “plans to continue to invest in its product innovation and execute on its growth strategy. The company has no debt and ample cash to support it in these efforts and believes it is well positioned to support its customers’ ongoing success.”

Despite its financial woes over the past few years, our research shows that Avid continues to enjoy a strong brand reputation and customer loyalty.  With new management in place and the 2013 NAB Show just around the corner, it will be interesting to see what strategies the company adopts to meet the needs of its customers and return to profitability.

Avid is not the only broadcast technology vendor to have received a notice of potential delisting from NASDAQ. Chyron received a notice of potential delisting from NASDAQ in November 2012 when its closing share price fell below $1.00 for more than 30 days. In that instance, Chyron’s share rose enough to enable the company to regain compliance with NASDAQ’s listing rules, and the company said the matter was closed.  In March 2013 Chyron received another notice of potential delisting from NASDAQ for failure to comply with NASDAQ Listing Rule 5450(b)(1)(A),which requires companies listed on the NASDAQ Global Market to maintain a minimum of $10,000,000 in stockholders’ equity.

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Related Content:

Press Release: Avid Announces Receipt of Anticipated NASDAQ Letter

Avid Delays Release of Q4 and Full Year 2012 Results, Shares Fall

Greenfield Out as Avid CEO, Replaced by Louis Hernandez

Avid SEC Filings Disclose Details of Greenfield’s Separation Agreement and New CEO Contract

Avid Warns of Lower Than Expected Revenue and Profit in Q3 2012

Chyron Receives Another Delisting Notice From NASDAQ

Rising Share Price Helps Chyron Avoid NASDAQ Delisting

Chyron Receives Notice of Potential Delisting From NASDAQ

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Chyron Receives Another Delisting Notice From NASDAQ

Broadcast technology vendor financials, SEC Filings | Posted by Joe Zaller
Mar 17 2013

Chyron said it received a letter from The NASDAQ Stock Market notifying the company that it is no longer in compliance with the minimum stockholders’ equity requirement for continued listing on the NASDAQ Global Market (the “Notice”).

This is the second time in the past few months that Chyron has received a notice of potential delisting from NASDAQ.  The company previously received a notice of potential delisting from NASDAQ in November 2012 when its closing share price fell below $1.00 for more than 30 days. In that instance, the company’s share rose enough to enable the company to regain compliance with NASDAQ’s listing rules, and the company said the matter was closed

The latest notice of potential delisting is for a different reason.  This time, the company is not in compliance with NASDAQ Listing Rule 5450(b)(1)(A), which requires companies listed on the NASDAQ Global Market to maintain a minimum of $10,000,000 in stockholders’ equity. As disclosed in the company’s 10-K for the fiscal year ended December 31, 2012, Chyron did not meet this requirement.

Chyron pointed out that this latest notice of potential delisting does not result in the immediate delisting of its common stock from NASDAQ, and that in accordance with NASDAQ Listing Rules, the company has 45 calendar days from the date of the Notice, or until April 26, 2013, to submit to NASDAQ a plan to regain compliance with this continued listing requirement.

If the plan is accepted, NASDAQ may grant the Company an extension of up to 180 calendar days from the date of the Notice for the Company to provide evidence of compliance.

If NASDAQ does not accept the company’s plan, Chyron may apply to transfer the listing of its common stock to the NASDAQ Capital Market (which has a lower stockholders’ equity requirement for continued listing) if it satisfies all of the criteria for initial listing on the NASDAQ Capital Market. If the company does not transfer its common stock to the NASDAQ Capital Market, NASDAQ will notify Chyron that its common stock is subject to delisting. At that time, the company may appeal the delisting determination to a NASDAQ Hearings Panel.

Chyron says it does intend to submit a plan to NASDAQ to regain compliance with the NASDAQ Listing Rules, but there can be no assurance NASDAQ will accept the plan.

A primary element of Chyron’s plan will be to note the potential for a positive impact of the company’s recently announced merger with Hego, which is expected to close in the second quarter of 2013.

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Related Content:

 

Chyron SEC Filing – Delisting Notice From NASDAQ for Failure to maintain a minimum of $10,000,000 in stockholders’ equity

More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Chyron Posts Another Loss in Q4 2012 as Revenue Continues to Decline

Rising Share Price Helps Chyron Avoid NASDAQ Delisting

Chyron Receives Notice of Potential Delisting From NASDAQ

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More Broadcast Vendor M&A: Chyron to Acquire Hego Group in All-Stock Deal

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 11 2013

Chyron announced that it has signed a definitive agreement to acquire Stockholm-based Hego Group, a provider of graphics and data visualization solutions for TV and sports, in an all-stock deal.

The company’s referred to the deal as a merger in its press release, and announced that it will rename the combined company ChyronHego.

Hego Group chairman and CEO Johan Apel, will become president and COO of ChyronHego, and will also get a seat on the company’s board of directors. . Michael Wellesley-Wesley, president and CEO of Chyron, will remain as ChyronHego CEO.

 

All Stock Deal with Three-Year Earn-Out

Under the terms of the deal, Chyron will issue a number of shares of Chyron common stock which will represent 40% of its aggregate shares of common stock outstanding, including certain outstanding options, after the closing, in exchange for all of Hego’s outstanding capital stock.

The deal also includes an earn-out provision whereby Hego shareholders will be entitled to receive additional shares of Chyron stock (up to a total of 50% of the aggregate shares outstanding) for achievement of certain revenue milestones during 2013, 2014 and/or 2015.

 

Combined Company Financials

Hego, which has about 100 employees, had revenue of $14.8m in 2012, up 37 percent from 2011.  Hego posted an operating profit of $1.6m in 2012.

Chyron posted an operating loss of $3.7m in 2012 on revenue of $30.2m

This implies the total 2012 performance of the enlarged company was revenue of approximately $45m, and an operating loss of $2.1m.

 

“The merger of Chyron and Hego brings together two pioneering companies to create a global leader in broadcast graphics creation, playout, and real-time data visualization. This is a truly transformative transaction for Chyron,” said Michael Wellesley-Wesley. “By combining the teams and resources of Chyron and Hego, we will deliver to our customers a highly diverse and compelling broadcast graphics capability.”

“With this merger, we are looking forward to integrating Hego and Chyron solutions and working together to innovate new products and services,” stated Johan Apel, chairman and CEO of Hego Group. “Our objective is to develop powerful, easy-to-use solutions for sports, news and live TV. Hego has grown quickly over the last few years but this merger takes us to a whole new level, especially in North and South America where our offerings have been generating significant interest. We’re excited about this combined company and I believe that our customers are the real beneficiaries.”

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Related Content:

Press Release: Chyron to Acquire Hego Group

Chyron Posts Another Loss in Q4 2012 as Revenue Continues to Decline

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Chyron Posts Another Loss in Q4 2012 as Revenue Continues to Decline

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 11 2013

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.

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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.

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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.

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Related Content:

Press Release: Chyron Reports Financial Results for the Fourth Quarter and Full Year 2012

Press Release: Chyron to Acquire Hego Group

Rising Share Price Helps Chyron Avoid NASDAQ Delisting

Chyron Receives Notice of Potential Delisting From NASDAQ

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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Rising Share Price Helps Chyron Avoid NASDAQ Delisting

Broadcast technology vendor financials, SEC Filings | Posted by Joe Zaller
Jan 29 2013

Graphics specialist Chyron announced that it has regained compliance with the NASDAQ Stock Market’s “Minimum Bid Price Rule” and is therefore no longer under threat of delisting from public markets.

Chyron received a notice of potential delisting from the NASDAQ stock exchange in November 2012 after the bid price of the company’s common stock closed below $1.00 per share for the 30 consecutive business days.

From the time it received the notice of potential delisting from NASDAQ in November 2012, Chyron had an initial grace period of 180 days, or until May 6, 2013, to regain compliance with the Minimum Bid Price Rule. At that time, the company said it intended “to monitor the bid price for its common stock between now and May 6, 2013 and will consider various options available to the Company if its common stock does not trade at a level that is likely to regain compliance.”

After falling to $0.50 on this news, the company’s shares have more than doubled, and are trading at $1.06 as of today, and have traded above the $1.00 mark since January 10, 2013.

According to Chyron, the company received a letter from NASDAQ on January 25, 2013 that informed it that because its shares have closed at or above $1.00 for 10 consecutive business days (from January 10, 2013 to January 24, 2013), it has now has regained compliance with the Minimum Bid Price Rule. The company says that the matter is now closed.

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Related Content:

Press Release: Chyron Corporation Regains Compliance With NASDAQ Listing Requirements

Chyron Receives Notice of Potential Delisting From NASDAQ

Chyron 8-K Filing: Notice of Potential Delisting From Nasdaq

Chyron Cuts Expenses as Revenue Declines 3% in Q3 2012

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