The lower sales result in an operating loss of $1.1 million. Company CEO Michael Wellesley-Wesley said: “We expect that the second half of the year will produce improved operational and financial results.”
Chyron today announced financial results for the second quarter that included total revenues of $7.7 million, a decrease of 19% compared to the prior year’s second quarter.
The company said the revenues of $9.4 million for the second quarter of 2011 “were the highest of any quarter in the past 15 quarters, and included a $2 million sale in North America that was not repeated in this year’s second quarter. Excluding that order, North America revenues were essentially flat for the second quarter as compared to last year’s second quarter.”
The company had an operating loss of $1.1 million for the second quarter of 2012 compared to an operating profit of $200,000 in the second quarter of 2011.
Service revenues, which include revenues from the company’s Axis cloud-based graphics service, systems hardware and software maintenance agreements, software training, creative services and systems commissioning were $1.9 million as compared to $2 million in the comparable quarter last year. Second quarter Axis revenues increased 7% and maintenance agreements revenues increased 20%, but other services revenues decreased primarily due to a decline in creative services revenues.
Service revenues as a percentage of total revenues for the second quarter of 2012 were 25% as compared to 21% in the prior year’s second quarter. Product revenues for the second quarter were $5.8 million as compared to $7.4 million in the comparable quarter of 2011. Product revenues were 75% of second quarter total revenues as compared to 79% in the prior year’s second quarter.
Gross profit margin for the second quarter was 69.2%, down only slightly from 69.6% for last year’s second quarter, primarily due to differences in product mix. Operating expenses for the second quarter were $6.4 million compared to $6.3 million in the comparable quarter of 2011. A 17% increase in R&D to $1.9 million and a 9% increase in sales and marketing to $3.5 million were mostly offset by a 33% decrease in general and administrative expenses to $1.0 million for the second quarter of this year versus last year.
Michael Wellesley-Wesley, Chyron president-CEO, said: “While the financial results of the second quarter did not meet our expectations, we expect that the second half of the year will produce improved operational and financial results. Last year’s second quarter benefitted from a one-time $2.0 million order from a major customer that we had anticipated would not be duplicated in this year’s second quarter. Excluding that order, North American revenues were flat second quarter of this year over second quarter of last year.
“That notwithstanding, we expected to generate higher product revenues during the quarter. The biggest impact was less than anticipated sales in our North American markets combined with the ongoing softness in Europe. We believe that purchasing managers are reacting to the potential for a second leg of the recession and becoming more conservative in their purchasing decisions. We experienced satisfactory revenue growth in Latin America and Asia where revenues grew 32% and 361%, respectively.”
Wellesley-Wesley concluded, “All told, we remain positive that our strategic plan will generate the long-term consistent results that we expect. While this was clearly a difficult quarter, the financial underpinnings of the company remain strong.
Read the company’s report here.