Chyron 4Q Revenue Down 9%; Buys Hego

Chyron Corp. today announced its fourth quarter 2012 revenue decreased 9% to $7.4 million compared to $8.1 million in the same quarter of 2011.

Service revenues increased 6% to $2.2 million compared to $2.1 million in 4Q 2011. Product revenues were down 13% to $5.2 million versus $6 million in 4Q 2011.

Full year 2012 revenues decreased 4% to $30.2 million versus $31.6 million in 2011. Full year service revenues increased 11% to $8.5 million versus $7.7 million in 2011. Full year 2012 product revenues decreased 9% to $21.7 million compared to $23.9 million.

Michael Wellesley-Wesley, Chyron CEO, commented: “While somewhat disappointing, our fourth quarter financial results were in line with our experience of 2012 as a whole and similar from an end user demand standpoint to conditions being reported by our principal competitors. Demand weakened in the second half of 2012 and didn’t have a meaningful recovery in the fourth quarter.

“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 two to three 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.”

In addition, Chyron also announced today that it has signed a definitive agreement to acquire Hego AB and its subsidiaries (collectively, Hego Group), a provider of graphics and data visualization solutions for TV and sports. Hego Group is a privately-held company with its headquarters in Stockholm, Sweden, and has operations in Norway, Finland, Czech Republic, the United Kingdom and the United States. The combined company will be rebranded as ChyronHego.

The purchase will take the form of a stock transaction whereby 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.

Both companies product lines are expected to complement each other with minimal overlap. Hego’s technology and solutions will primarily be used for live sports production, while Chyron’s solutions will be focused on live and near-live news.

“Our objective is to develop powerful, easy-to-use solutions for sports, news and live TV,” says Johan Apel, chairman-CEO of Hego Group. “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.”