Chyron Q1 Loss — CEO Talks about Industry Consolidation

3 May

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Chyron’s Q1 follows the same pattern as reported for Q4 (Chyron Reports Continued Net Loss In Spite of Increased Revenue).  Q1 revenue was 7.9 million for Q1 2012 as compared to $6.6 million for Q1 2011; down from Q4 revenue of $8.1 million. 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 Q1 2011.  In the analyst phone conference Chyron CEO Michael Wellesley-Wesley responds to a question on the pending sales of Harris by saying that Chyron would go after the Harris Inscriber business and that he expects a lot more consolidation and sale of companies i the industry. Specially he stated that:

There are several broadcast equipment companies that are for sale at the moment and Harris os just one of them. Harris is the latest to join the club. Miranda was put up for sale by its board of directors 4 to 6 weeks ago. If you pay attention to what the new CEO at Sony is saying about the future plans of the company, Broadcast TV is noticeable by its absence. There are quite a number of fairly large broadcast operations in our industry that are for sale. Only fairly recently that Grass Valley was put on the block by Thomson in France and they were ought by private equity firm Fransisco & partners. So there is a lot of change going on in our industry. I expect that there will be a lot of consolidation in this space. This is about a $24 billion a year industry with around 1,600 companies in it and so you have a situation int he broadcast equipment industry where 80% of the revenues are being generated by 30% of the companies. So there are quite a few companies in the industry that are not making adequate returns on their investment and that will be consolidated. I think some of the smaller companies will go the the wall, some will emerge as new champions, and it will be very interesting to see who, if anybody, steps up to the plate to buy these large divisions such as Harris Broadcast.

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