Chyron reports fifth consecutive profitable quarter

Chyron Corporation said its second quarter of 2007 was its fifth
consecutive profitable quarter, and reported net income of $0.6 million
or $0.01 per share on revenues of $7.8 million. For the first half of
2007 the Company reported net income of $0.7 million or $0.01 per share
on revenues of $14.3 million.

Michael Wellesley-Wesley, Chyron President and CEO commented, “We are
pleased to report that we have delivered our fifth consecutive
profitable quarter. Our second quarter results are satisfactory and were
in line with our plan for the quarter.”

He added, “We are currently experiencing strengthening demand for our
broadcast graphics and channel branding products; we expect this demand
to drive sales growth in the second half of 2007.”

Mr. Wellesley-Wesley also noted that the Company’s digital displays
business continues to gain momentum. “Our ChyTV revenues were $0.5
million in the first half of 2007, an increase of 21 percent over the
comparable period in 2006. With the release to production of the ChyTV
HD100 and rollout of ChyTV.net as a service at the end of June, I expect
ChyTV revenue growth rate to accelerate in the second half.”

While second quarter revenues of $7.8 million were $0.8 million or 10
percent lower than the $8.6 million reported for the comparable prior
year’s quarter, first half 2007 revenues of $14.3 million were $0.9
million or 6 percent higher than the $13.4 million reported for the
first half of 2006. Second quarter 2006 revenues were higher due to
slippage of customer orders from first quarter 2006 to second quarter
2006. Enhanced product offerings, which now include mid-range high
definition and channel branding products, contributed to the increased
revenues for the first half of 2007.

International revenues for the second quarter increased to $1.8 million,
representing a 72 percent increase over the same quarter of 2006, and
for the first half of 2007 increased to $3.1 million, a 46 percent
increase over the first half of 2006, reflecting greater market
penetration in Europe and Asia.

Gross margins for the second quarter were 69 percent as compared to 67
percent in last year’s comparable quarter, and for the first six months
were 68 percent compared to 67 percent for the same period in 2006.

Michael Wellesley-Wesley, Chyron President and CEO, commented, “In 2007
Chyron is experiencing a more typical annual revenue and profits
pattern, specifically a pattern that should result in consistent,
sequential quarterly growth in revenues and profits throughout the
second half of the year. Any comparison with 2006’s exceptionally strong
second quarter was always going to prove challenging because last year’s
second quarter was such an anomaly.”

Total operating expenses of $4.7 million for the second quarter were
$0.6 million higher than the $4.1 million incurred in the second quarter
of 2006. Selling, general and administrative expenses of $3.4 million
were $0.3 million higher than the $3.1 million in last year’s second
quarter, primarily due to an increase of $0.1 million higher operating
costs of the Company’s international operations, $0.2 million from
additional staff to enhance product and customer support and $0.3
million from higher employee benefits costs and costs related to new
ventures and the Company’s application for listing on the American Stock
Exchange. These costs were partially offset by a $0.3 million gain on
the satisfaction of a previously written off note receivable from an
operation that had been sold in 1998. Research and development expenses
of $1.3 million were $0.3 million or 30 percent higher than the $1.0
million in last year’s second quarter, reflecting the Company’s
continued investment, in the form of personnel and related costs, in
development of new or enhanced products for high definition broadcast
graphics, including channel branding, and digital displays and mobile
content products.

Operating profit of $0.6 million in the second quarter is after a $0.5
million operating loss attributable to the Company’s digital displays
business. For the first half of the year, operating profit of $0.6
million is after a $1.1 million operating loss incurred by the digital
displays business.

At June 30, 2007 the Company had cash on hand of $1.6 million and
working capital of $5.9 million. For the six months ended June 30, cash
of $0.4 million was used by operating activities and cash of $0.3
million was used by investing activities. The Company met its cumulative
EBITDA financial covenant with its bank by a wide margin.