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ChyronHego Corporation Message Board

  • caminocasa07 caminocasa07 Jul 15, 2013 6:54 PM Flag

    Three Year Plan

    Hypothetical but possible IMO:

    ChyronHego generates revenues of $54,000,000 in 2014 --- 13% operating margins
    creates $7,840,000 operating earnings divided by 35,000,000 shares
    2014 operating EPS $.20 stock trades between $2.40 - 2.80

    Assuming 18% increase in revenues 2015 14% operating margin---
    $63,800,000 revenues $8,900,000 operating earnings $.25 operating
    earnings per share 2015 assuming 36,000,000 shares outstanding
    Stock trades between $3.00 and $3.60.

    14% increase in revenues 2016 Revenues $72,700,000 15% operating margin
    Operating earnings come in at $10,900,000 ---Assume company buys
    back shares in 2015 and 2016 so shares outstanding in 2016 end at 34,000,000.
    Operating earnings per share in 2016 $.32. -----14X PE
    $4.48 price target 2016---

    The share buyback would be an important part of the plan Also
    a new program initiated now and going forward whereby only phantom stock
    options issued----recipient would still realize benefit of stock appreciating
    but paid in cash rather than new stock issued.

    No further stock dilution if this approach taken.

    Perhaps PE multiple I am using would be considered too low--
    and hopefully this will be the case --however best IMO to be conservative--
    There has been a shrinkage of multiples in recent years
    in this industry---we are still talking untaxed earnings,
    and "new ChyronHego" Board of Directors and Management
    has to prove that the necessary discipline and focus on generating strong
    growth in revenues and importantly, operating cost controls on a
    sustained basis will be maintained.

    Many risks inherent herein---and of course this is a
    guessing exercise at this point---should know
    more in August


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    • Fine tuning---am currently thinking in terms of 14% operating margins in 2015 and 2016
      Could be a stretch---company will need close controls on operating expenses---

      Stock repurchase program and phantom stock option program would be helpful
      in enhancing operating earnings per share----Hopefully Board of Directors
      will consider this initiative.

      My current guess (subject to change) on operating E.P.S in 2015 ---$.24
      A 15X PE--would get us to $3.60--Perhaps around March 2015?-
      Still many risks, but if attained, a 40% annualized rate of return from
      Friday's $2.25 close.

    • If the cash flow develops as outlined above (a super big IF), then there
      would be ample funds to support a major buyback of shares and to
      more than absorb any dilution from recent amendment to
      incentive option plan.
      Very little cash on hand now to announce a stock buyback plan
      Best to wait until Fall when hopefully the first of many profitable
      quarters will be announced (early November)

      If at that time the long term outlook appears to be very favorable I would
      recommend a $16 million stock buyback program to
      be carried out over four years subject to the usual caveats
      and qualifications.

      This of course should only be done if the Board of Directors
      has the necessary confidence and conviction to feel that the goals implicit
      in the Plan outlined above are reasonable and attainable.

    • Could be much simpler:
      1) Fire MWW
      2) Investigate "strategic alternatives"
      3) Sell the company for $4-5 by the end of this year.

      • 1 Reply to outpissed
      • Could be much worse...
        1.) Fire MWW
        2.) Find that the "stategic alternative" scenario involves a clean execution of the merger..
        3.)... The restructuring gets pushed to the back burner as MWW resists your rebellion. Some want him to stay thus no matter if you succeed or fail in your 'rule or ruin' scheme the corprate political structure becomes toxic.
        4.) The stock that seemed to be in a death spiral , that has now broken it's terminal trajectory ..returns to its nose dive.... By the end of 2014...the wreckage is salvaged at $ .70 per share .

        We have to get past the restructuring and integration before we can think of MWW retired across the Atlantic (Or not, if Caminocasa is right).
        Do you really hate the man enough to put your money at risk?

        Sentiment: Strong Buy

2.810.00(0.00%)Feb 27 3:56 PMEST