ChyronHego Reports Financial Results for the First Quarter 2014

ChyronHego Reports Financial Results for the First Quarter 2014 
MELVILLE, NY -- (Marketwired) -- 05/09/14 --  ChyronHego Corporation
(NASDAQ: CHYR), a global leader in broadcast graphics creation,
playout, and real-time data visualization with a wide variety of
products and services for live television, news and sports
production, today announced its financial results for the first
quarter ended March 31, 2014. 
First Quarter Financial Highlights: 


 
--  Q1 2014 revenues increased 57% to $12.6 million compared to $8.0
    million in Q1 2013;
--  Operating loss in Q1 2014 of $3.1 million compared to operating loss
    in Q1 2013 of $0.8 million;
--  Excluding a mark to market adjustment described below, operating loss
    in Q1 2014 would have been $0.6 million as compared to operating loss
    of $0.8 million in Q1 2013;
--  Net loss of $3.2 million in Q1 2014, as compared to a net loss of $0.9
    million in Q1 2013;
--  Excluding the mark to market adjustment, net loss of $0.7 million in
    Q1 2014 compared to net loss of $0.9 million in Q1 2013.

  
President and CEO Johan Apel commented, "ChyronHego's revenues for the
first quarter are ahead of plan. The operating result is better than
expected but is affected by a lower than planned gross margin coming
from our investment in contracts with the European soccer leagues, in
addition to the recently announced initial rollout of TRACAB player
tracking technology across three Major League Baseball stadiums. We
expect the gross margin to pick up during the latter part of the
year. Almost half of our first quarter revenues are of the recurring
type, generated in the areas of cloud services, software licensing,
and production services. We plan to continue the transformation of
the business model to be balanced between high margin products and
recurring services." 
Mr. Apel added, "We enjoyed meeting with new and existing customers
in April at NAB Show in Las Vegas. Our product launches were well
received and it was great to get the chance to present our upcoming
acquisitions to the world, WeatherOne and ZXY Sport Tracking. We have
great expectations for them and I anticipate that they will have a
positive impact on the consolidated financials going forward.
Furthermore, we will continue ou
r focus on cost control and also
expect to realize further synergies from our acquisitions to increase
profitability during 2014." 
First Quarter 2014 Financial Results 
Revenues for the first quarter of 2014 increased 57% to $12.6 million
as compared to $8.0 million in the first quarter of 2013. This $4.6
million increase was driven primarily from contribution of services
from the 2013 merger with Hego.  
Gross profit margin for the first quarter of 2014 was 61%, down from
71% in Q1 2013. Services, representing 54% of revenues, carry a lower
gross profit margin than products. 
Operating expenses for the first quarter of 2014 were $8.3 million,
excluding the mark to market adjustment of $2.6 million, compared to
$6.5 million in the first quarter of 2013. Research & development
(R&D) expenses were $2.2 million, up 22% from $1.8 million in the
first quarter 2013, primarily due to inclusion of $0.8 million of
Hego R&D expenses, offset by cost savings from the 2013 workforce
reduction. Sales and marketing (S&M) expenses were $4.8 million, up
66% from $2.9 million in Q1 2013, primarily due to the incremental
costs from the Hego merger, including amortization of intangibles of
$0.3 million. General and administrative (G&A) expenses were $1.3
million, a decrease of $0.6 million from $1.9 million in the first
quarter of 2013. The decrease was primarily due to inclusion in Q1
2013 of $0.7 million in merger transaction expenses and cost savings
from the 2013 workforce reduction of $0.1 million, offset by the
incremental G&A costs from the merger with Hego. 
Net loss for the first quarter of 2014 was $3.2 million, or $(0.10)
per basic and diluted share, as compared to net loss of $0.9 million,
or $(0.05) per basic and diluted share, in the first quarter of 2013.
Excluding the mark to market expense of $2.6 million from revaluation
of the contingent earn-out shares related to the Hego merger, the
Company would have reported net loss of $0.7 million for the first
quarter of 2014 compared to a net loss of $0.9 million for the first
quarter of 2013. 
Operating loss and net loss amounts shown herein, that are exclusive
of the mark to market adjustment for the change in the fair value of
the contingent consideration, are not U.S. generally accepted
accounting principles basis operating loss and net loss, and are
reported herein solely to disclose the operating loss and net loss
amounts that might have been reported had this charge not been
recognized, as a basis for comparison between periods. Management
believes that disclosing operating loss and net loss exclusive of
this charge for the first quarter of 2014 provides an alternative
basis on which to compare results between the periods and an
understanding of earnings that would have resulted in the 2014 period
had this charge not been incurred. 
Conference Call and Webcast: Fourth Quarter Financial Results 
ChyronHego management will host a conference call on Friday, May 9,
2014, at 10:00 a.m. Eastern Time to review the first quarter 2014
results. Participants using the telephone should dial 877-303-9145
(U.S. and Canada) or 760-536-5203 (International) and refer to
conference code 40485333. Web participants are encouraged to go to
http://investor.chyronhego.com (click on Events & Presentations). A
replay will be available shortly after the call on
http://investor.chyronhego.com. 
About ChyronHego 
 ChyronHego (NASDAQ: CHYR) is a global leader in
broadcast graphics creation, playout and real-time data visualization
with a wide range of products and services for live television, news
and sports production. Joining forces in 2013, with over 80 years of
combined industry expertise, Chyron and Hego Group offer
award-winning solutions -- such as the TRACAB(TM) player tracking
system and end-to-end BlueNet(TM) graphics workflow -- under the
collective ChyronHego brand. Headquartered in Melville, N.Y., the
Company also has offices in the Czech Republic, Denmark, Finland,
Germany, Mexico, Norway, Singapore, Slovak Republic, Sweden, and the
United Kingdom. For more information on ChyronHego, visit
www.chyronhego.com. 
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) our belief that our business is
more balanced and predictable in terms of geographies and products
and services; (ii) our belief that as a result of the merger we have
an exceptionally strong product offering backed up by extensive
product development and engineering resources and strong global
service and support capability; and, (iii) our belief that we are
assuming a normalized level of operating expenses and anticipate that
our future results should show growth in operating profitability at
current gross profit margin levels. 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: current and future economic conditions that
may adversely affect our busines
s and customers; potential
fluctuation of our revenues and profitability from period to period
which could result in our failure to meet expectations; our ability
to integrate the operations of Chyron and Hego successfully and in a
timely manner; our ability to maintain adequate levels of working
capital; our ability to successfully maintain the level of operating
costs; our ability to obtain financing for our future needs should
there be a need; our ability to incentivize and retain our current
senior management team and continue to attract and retain qualified
scientific, technical and business personnel; our ability to expand
our Axis online graphics creation solution or to develop other new
products and services; our ability to generate sales and profits from
our Axis online graphics services, workflow and asset management
solutions; rapid technological changes and new technologies that
could render certain of our products and services to be obsolete;
competitors with significantly greater financial resources;
introduction of new products and services by competitors; challenges
associated with expansion into new markets; failure to stay in
compliance with all applicable NASDAQ requirements that could result
in NASDAQ delisting our common stock; and, other factors discussed
under the heading "Risk Factors" contained in Item 1A in our Annual
Report on Form 10-K for the year ended December 31, 2013 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 we undertake no duty to update this information unless required
by law.  


 
                                                                            
                           CHYRONHEGO CORPORATION                           
        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)         
                  (In thousands, except per share amounts)                  
                                                                            
                                                        Three Months Ended  
                                                             March 31,      
                                                          2014       2013   
                                                       ---------  --------- 
Product revenues                                       $   5,781  $   5,974 
Service revenues                                           6,840      2,043 
                                                       ---------  --------- 
Total revenues                                            12,621      8,017 
Gross profit                                               7,736      5,722 
Operating expenses:                                                         
  Selling, general and administrative                      6,111      4,751 
  Research and development                                 2,178      1,780 
  Change in fair value of contingent consideration         2,556          - 
                                                       ---------  --------- 
Total operating expenses                                  10,845      6,531 
                                                       ---------  --------- 
Operating loss                                            (3,109)      (809)
Interest and other income (expense), net                    (196)       (97)
                                                       ---------  --------- 
Loss before taxes                                         (3,305)      (906)
Income tax (expense) benefit, net                             88        (11)
                                                       ---------  --------- 
Net loss                                                  (3,217)      (917)
Less: Net income attributable to non-controlling                            
 interests                                                    25          - 
                                                       ---------  --------- 
Net loss attributable to ChyronHego shareholders       $  (3,242) $    (917)
                                                       =========  ========= 
Net loss per common share attributable to ChyronHego                        
 shareholders -                                                             
  Basic                                                $   (0.10) $   (0.05)
  Diluted                                              $   (0.10) $   (0.05)
Weighted average number of common and common                                
 equivalent shares outstanding:                                             
  Basic                                                   31,118     17,362 
  Diluted                                                 31,118     17,362 
                                                                            
                                                                            
                                                                            
              CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)             
                               (in thousands)                               
                                                                            
                                                   March 31,    December 31,
                                                      2014          2013    
                                                 ------------- -------------
Assets:                                                                     
Cash and cash equivalents                        $       3,988 $       5,266
Accounts receivable, net                                 9,009         7,781
Inventories, net                                         2,747         2,816
Other current assets                                     2,226         2,525
                                                 ------------- -------------
  Total current assets                                  17,970        18,388
Goodwill and intangible assets, net                     27,585        27,916
Other non-current assets                                 4,427         4,348
                                                 ------------- -------------
  Total assets                                   $      49,982 $      50,652
                                                 ============= =============
Liabilities and shareholders' equity:                                       
Current liabilities                              $      16,004 $      17,152
Non-current liabilities                                 13,852        18,033
                                                 ------------- -------------
  Total liabilities                                     29,856        35,185
                                                 ------------- -------------
Shareholders' equity                                    20,126        15,467
                                                 ------------- -------------
Total liabilities and shareholders' equity       $      49,982 $      50,652
                                                 ============= =============

 
All trademarks and registered trademarks mentioned herein are the
property of their respective owners. 
Social Media
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 Twitter:
http://twitter.com/chyronhego 
 LinkedIn:
http://www.linkedin.com/company/chyron 
 YouTube:
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Copyright 2014 ChyronHego Corporation 
Contact:
ChyronHego Investor Relations
Tel: (631) 845-2000, press 6
Email: Investor.Relations@chyronhego.com 
 
 
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