Chyron Reports 1Q Revenue Up 20%

Chyron, a provider of graphics as a service for on air, online, out of home and mobile applications, today announced its financial results for the first quarter ended March 31 that included:

• 20% revenue growth to $7.9 million for first quarter 2012 as compared to $6.6 million for first quarter 2011.

• Sustained gross profit margin of 70% consistent with first quarter 2011.

• A 19% increase in research and development expense and a 32% increase in sales and marketing expense as compared to the first quarter of 2011.

• Operating loss and pre-tax loss of $1.1 million as compared to an operating loss and pre-tax loss of $0.9 million in the first quarter of 2011.

Product revenues for the first quarter increased 15% to $5.8 million compared to $5.0 million in the comparable quarter of 2011. Service revenues, which include revenues from the company’s Axis cloud-based graphics service as well as systems hardware and software maintenance agreements, training and creative services, increased 34% to $2.1 million from $1.5 million in the comparable quarter last year. Service revenues as a percentage of total revenues for the first quarter of 2012 were 26% as compared to 23% in the prior year’s first quarter.

Gross profit margin for the first quarter held steady at 70%, the same as for the first quarter of 2011. Operating expenses for the quarter were $6.6 million compared to $5.5 million in the comparable quarter of 2011, an increase of 20%, primarily driven by higher sales and marketing expenses due to increased sales personnel and related direct costs, and higher research and development expenses, primarily related to integrating Axis with its graphics products and systems.

Sales and marketing expenses were $3.5 million and $2.7 million for the first quarters of 2012 and 2011, respectively. Research and development expenses were $1.9 million and $1.6 million for the first quarters of 2012 and 2011, respectively.

General and administrative expenses were $1.2 million for both the first quarters of 2012 and 2011.

The company had an operating loss and pre-tax loss of $1.1 million for the first quarter of 2012 compared to an operating loss and pre-tax loss of $0.9 million in the first quarter of 2011.

Michael Wellesley-Wesley, Chyron president-CEO, commented: “We are pleased with the 20% revenue increase in the first quarter of fiscal 2012 versus last year’s first quarter. Products business revenues grew 15% and services revenues grew at a 34% clip. Our North American business performed at a high level with a 24% revenue increase on a year-over-year basis. We are especially pleased with the progress taking place in developing new markets, particularly in the Asia-Pacific region. We made important inroads in Australia and Korea and we believe these markets represent important opportunities going forward.”