Chyron Reports Financial Results for the Second Quarter and First Six Months of 2008

  
    
  
  
    
      Chyron (AMEX: CGS), a leading provider of broadcast-quality digital 
      graphics solutions for television stations and networks and for online, 
      out of home and mobile applications, today announced its financial 
      results for the second quarter and six months ended June 30, 2008.
    
    
      Key Financial Highlights:
    
    
      
        Revenue of $10.0 million for 2Q08, up 30% over prior year; and 
        $18.3 million for the six months, up 28% over prior year;
      
      
        Net Income of $1.1 million for 2Q08, up 76% over prior year; and 
        $1.4 million for the six months, up 102% over prior year; and
      
      
        Adjusted EBITDA of $1.6 million for 2Q08, up 92% over prior year; 
        and $2.4 million for the six months, up 127% over prior year.
      
    
    
      For the second quarter ended June 30, 2008, revenues were $10.0 million, 
      an increase of 30% from revenues of $7.8 million in the second quarter 
      of 2007. Operating income for the quarter was $1.2 million, nearly 
      double the second quarter of 2007. Net income for the quarter was $1.1 
      million, or $0.07 per share, an increase of 76% from net income of $0.6 
      million, or $0.04 per share, in the second quarter of 2007. Adjusted 
      EBITDA increased to $1.6 million, nearly double the second quarter of 
      2007. The Company defines Adjusted EBITDA as GAAP net income plus 
      interest, income tax expense, depreciation, amortization and non-cash 
      stock option expense. 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 is set forth at the end of this 
      press release.
    
    
      For the six months ended June 30, 2008, revenues were $18.3 million, an 
      increase of 28% from revenues of $14.3 million in the prior year period. 
      Operating income for the six months was $1.3 million, more than double 
      the prior year period. Net income for the six months was $1.4 million, 
      also more than double the prior year period. Adjusted EBITDA for the six 
      months increased to $2.4 million from $1.1 million in the prior year 
      period.
    
    
      Michael Wellesley-Wesley, Chyron President and CEO, commented, "We 
      achieved record levels of revenue for the second quarter, as well as 
      record gross profit margin of 72%. Despite increasing our R&D 
      expenditure by 32% over the prior year quarter, and raising our sales 
      and marketing investment in our new AXIS web-based services, we achieved 
      an operating profit that was close to double that of the prior year 
      period. We continue to experience substantial increase in demand across 
      our product lines and services, especially for our high-end HDTV 
      broadcast graphics systems, and remain on track with our growth plan for 
      2008."
    
    
      "Later this week, Chyron's brand new Lyric 7.0 software will be deployed 
      across multiple high-end Chyron graphics systems that we expect will 
      play a central role in NBC's wall to wall Olympics coverage," Mr. 
      Wellesley-Wesley added. "We expect that NBC Olympics graphics will be 
      created primarily through the use of Chyron's products. We also expect 
      that a number of other international broadcasters will use our products 
      for their Olympics coverage, and so for the next few weeks, we will 
      truly be 'The Company the Whole World Watches.'"
    
    
      In addition, Mr. Wellesley-Wesley added, "We recently announced the 
      adoption of our AXIS services by the Gannett Broadcasting Group across 
      all 23 Gannett owned stations. This publicity has resulted in a great 
      deal of interest in AXIS, and we believe that this platform has an 
      exciting future in both our core broadcast market as well as new online 
      markets such as newspapers and radio. We are working to integrate AXIS 
      functionality across the entire Chyron product line very soon, and we 
      have already connected the AXIS content creation environment with our 
      ChyTV and ChyTV.Net digital signage solution in an enterprise level beta 
      test."
    
    
      Conference Call and Webcast: Second Quarter Financial Results:
    
    
      Chyron Corporation management will host a conference call on Wednesday, 
      August 6, 2008, at 10:00 AM eastern time, to review the second quarter 
      and six month results. Participants using the telephone should dial 
      [phone] (U.S. and Canada) or [phone] (International) and 
      refer to passcode 77899508. Web participants are encouraged to go to 
      either www.chyron.com or www.earnings.com 
      at least 15 minutes prior to the start of the call to register, 
      download, and install any necessary audio software. The replay numbers 
      and passcode are [phone] (U.S. and Canada) or [phone] 
      (International) and refer to passcode 96004024. The online archives will 
      be available on both sites shortly after the conclusion of the call. 
      Each replay will continue for seven days, through August 13, 2008.
    
    
      About Chyron
    
    
      Chyron continues to define the world of digital and broadcast graphics 
      with newsroom, Web, Mobile, HD, and 3D integration solutions. Winner of 
      numerous awards, including two Emmys, Chyron has proven itself as a 
      leader in the industry with sophisticated graphics offerings that 
      include Online, Chyron's AXIS Graphics online content creation software, 
      HD/SD switchable on-air graphics systems, clip servers, channel branding 
      and telestration systems, graphic asset management and XMP integration 
      solutions, and the award-winning WAPSTR mobile phone newsgathering 
      application, as well as digital signage. For more information about 
      Chyron's products and services, please visit the Company's websites at www.chyron.com, 
      www.chytv.com and www.axisgraphics.tv 
      (AMEX: CGS).
    
    
      Special Note Regarding Forward-looking Statements
    
    
      This press release contains "forward-looking statements" within the 
      meaning of the Private Securities Litigation Reform Act of 1995, 
      including statements relating to (i) continued substantial increases in 
      demand across the Company's product lines and services and the Company's 
      progress on its growth plans for 2008, (ii) the expected use of the 
      Company's products by NBC and other broadcasters in their Olympics 
      coverage, (iii) the potential for AXIS to have an exciting future in the 
      Company's markets, and (iv) the Company's plans to integrate AXIS into 
      its ChyTV and ChyTV.net solutions. These forward-looking statements are 
      based on management's current expectations and are subject to certain 
      risks and uncertainties that could cause actual results to differ 
      materially from those set forth in or implied by such forward-looking 
      statements. These risks and uncertainties include, but are not limited 
      to, product concentration in a mature market, dependence on the emerging 
      digital market and the industry's transition to digital television 
      ("DTV") and high definition television ("HDTV"), Chyron's ability to 
      integrate its AXIS online graphics creation solution into its product 
      offerings and to generate profits from AXIS, consumer acceptance of DTV 
      and HDTV, resistance within the broadcast or cable industry to implement 
      DTV and HDTV technology, rapid technological changes, continued growth, 
      use and improvement of the Internet, new technologies that could render 
      certain Chyron products to be obsolete, competitors with significantly 
      greater financial resources, new product introductions by competitors, 
      seasonality, ability to maintain adequate levels of working capital, 
      Chyron's ability to successfully maintain the level of operating costs, 
      expansion into new markets and other factors discussed under the heading 
      "Risk Factors" contained in Item 1A in Chyron's Annual Report on Form 
      10-K for the year ended December 31, 2007, which has been filed with the 
      Securities and Exchange Commission, as well as any updates to those risk 
      factors filed from time to time. All information in this press release 
      is as of the date of the release, and Chyron undertakes no duty to 
      update this information unless required by law.
    
    
      
        
          
            CHYRON CORPORATION
          
        
      
      
        
          
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
          
        
      
      
        
          
            (In thousands, except per share amounts)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          Three Months Ended
        
        
        
        
          Six Months Ended
        
      
      
        
        
        
        
        
          June 30,
        
        
        
        
          June 30,
        
      
      
        
        
        
        
        
          
            2008
          
        
        
           
        
        
          
            2007
          
        
        
        
        
          
            2008
          
        
        
           
        
        
          
            2007
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net sales
        
        
        
        
          $10,043
        
        
        
        
          $ 7,755
        
        
        
        
          $18,347
        
        
        
        
          $14,284
        
      
      
        
          Gross profit
        
        
        
        
          7,280
        
        
        
        
          5,348
        
        
        
        
          13,140
        
        
        
        
          9,756
        
      
      
        
          Operating expenses:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Selling, general and administrative
        
        
        
        
          4,440
        
        
        
        
          3,457
        
        
        
        
          8,610
        
        
        
        
          6,719
        
      
      
        
          Research and development
        
        
        
        
          1,688
        
        
        
        
          1,274
        
        
        
        
          3,203
        
        
        
        
          2,404
        
      
      
        
          Total operating expenses
        
        
        
        
          6,128
        
        
        
        
          4,731
        
        
        
        
          11,813
        
        
        
        
          9,123
        
      
      
        
          Operating income
        
        
        
        
          1,152
        
        
        
        
          617
        
        
        
        
          1,327
        
        
        
        
          633
        
      
      
        
          Interest and other income (expense), net
        
        
        
        
          (3)
        
        
        
        
          39
        
        
        
        
          77
        
        
        
        
          67
        
      
      
        
          Income before taxes
        
        
        
        
          1,149
        
        
        
        
          656
        
        
        
        
          1,404
        
        
        
        
          700
        
      
      
        
          Income taxes
        
        
        
        
          40
        
        
        
        
          25
        
        
        
        
          40
        
        
        
        
          25
        
      
      
        
          Net income
        
        
        
        
          $1,109
        
        
        
        
          $ 631
        
        
        
        
          $1,364
        
        
        
        
          $ 675
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income per common share -
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
          $0.07
        
        
        
        
          $0.04
        
        
        
        
          $0.09
        
        
        
        
          $0.04
        
      
      
        
          Diluted
        
        
        
        
          $0.07
        
        
        
        
          $0.04
        
        
        
        
          $0.08
        
        
        
        
          $0.04
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Weighted average number of common and
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          common equivalent shares outstanding:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Basic
        
        
        
        
          15,567
        
        
        
        
          15,221
        
        
        
        
          15,528
        
        
        
        
          15,219
        
      
      
        
          Diluted
        
        
        
        
          16,726
        
        
        
        
          15,872
        
        
        
        
          16,662
        
        
        
        
          15,939
        
      
    
    
      
        
          
            CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
          
        
      
      
        
          
            (in thousands)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          June 30,
        
        
        
        
          December 31,
        
      
      
        
        
        
        
        
          
            2008
          
        
        
        
        
          
            2007
          
        
      
      
        
          Assets:
        
        
        
        
        
        
        
        
        
      
      
        
          Cash and cash equivalents
        
        
        
        
          $4,207
        
        
        
        
          $ 6,290
        
      
      
        
          Accounts receivable, net
        
        
        
        
          6,931
        
        
        
        
          5,909
        
      
      
        
          Inventories, net
        
        
        
        
          3,134
        
        
        
        
          2,796
        
      
      
        
          Deferred taxes
        
        
        
        
          686
        
        
        
        
          686
        
      
      
        
          Other current assets
        
        
        
        
          617
        
        
        
        
          441
        
      
      
        
          Total current assets
        
        
        
        
          15,575
        
        
        
        
          16,122
        
      
      
        
          Non-current assets
        
        
        
        
          6,497
        
        
        
        
          3,355
        
      
      
        
          Total assets
        
        
        
        
          $22,072
        
        
        
        
          $19,477
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Liabilities and shareholders' equity:
        
        
        
        
        
        
        
        
        
      
      
        
          Current liabilities
        
        
        
        
          $7,661
        
        
        
        
          $7,675
        
      
      
        
          Non-current liabilities
        
        
        
        
          1,187
        
        
        
        
          1,666
        
      
      
        
          Total liabilities
        
        
        
        
          8,848
        
        
        
        
          9,341
        
      
      
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Shareholders' equity
        
        
        
        
          13,224
        
        
        
        
          10,136
        
      
      
        
          Total liabilities and shareholders' equity
        
        
        
        
          $22,072
        
        
        
        
          $19,477
        
      
    
    
      The Company defines Adjusted EBITDA as GAAP net income plus net 
      interest, income tax expense, depreciation, amortization and non-cash 
      stock option expense. These results are provided as a complement to 
      results provided in accordance with GAAP because management believes 
      this non-GAAP financial measure is a good indication of the Company's 
      ability to generate cash that is or will be used in the business. 
      Adjusted EBITDA is not a measurement of financial performance under GAAP 
      and should not be considered a substitute for net income as a measure of 
      performance.
    
    
      
        
          
            RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (Unaudited)
          
        
      
      
        
          
            (in thousands)
          
        
      
      
        
        
        
           
        
        
        
        
           
        
        
        
      
      
        
        
        
        
        
          Three Months Ended
        
        
        
        
          Six Months Ended
        
      
      
        
        
        
        
        
          June 30,
        
        
        
        
          June 30,
        
      
      
        
        
        
        
        
          
            2008
          
        
        
           
        
        
          
            2007
          
        
        
        
        
          
            2008
          
        
        
           
        
        
          
            2007
          
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Net income
        
        
        
        
          $1,109
        
        
        
        
          $631
        
        
        
        
          $1,364
        
        
        
        
          $675
        
      
      
        
          Interest, net
        
        
        
        
          15
        
        
        
        
          (31)
        
        
        
        
          8
        
        
        
        
          (43)
        
      
      
        
          Income taxes
        
        
        
        
          40
        
        
        
        
          25
        
        
        
        
          40
        
        
        
        
          25
        
      
      
        
          Depreciation
        
        
        
        
          186
        
        
        
        
          123
        
        
        
        
          354
        
        
        
        
          231
        
      
      
        
          Amortization
        
        
        
        
          30
        
        
        
        
          0
        
        
        
        
          62
        
        
        
        
          0
        
      
      
        
          EBITDA
        
        
        
        
          $1,380
        
        
        
        
          $748
        
        
        
        
          $1,828
        
        
        
        
          $888
        
      
      
        
          Stock Option Expense
        
        
        
        
          233
        
        
        
        
          94
        
        
        
        
          553
        
        
        
        
          162
        
      
      
        
          Adjusted EBITDA
        
        
        
        
          $1,613
        
        
        
        
          $842
        
        
        
        
          $2,381
        
        
        
        
          $1,050