KIT digital Reports Q1 2012 Results In Line With Preliminary Q1 2012 Announcement
"During my first 45 days as CEO we have conducted a thorough strategic and operational review of our business," said Barak Bar-Cohen, CEO. "Based on this assessment, we have thus far taken definitive steps to support our operating plan and improve financial controls. This includes raising capital to support our updated operational plan and global commercial strategy. Going forward, we intend to sharpen our focus on tier one video management software and services, which we believe will result in significantly higher cash flow levels by the end of 2012."
Q1 2012 Results First quarter 2012 revenues were $59.0 million, compared to $70.0 million in the preceding quarter and $34.5 million for the first quarter of 2011. Non-GAAP operating loss was $8.0 million, compared to non-GAAP operating income of $16.5 million in the preceding quarter and $7.1 million of non-GAAP operating loss for the first quarter of 2011.
First quarter GAAP net loss was $24.9 million or $0.53 per share, compared to GAAP net income of $0.4 million or $0.01 per share in the preceding quarter and GAAP net loss of $12.5 million or $0.34 per share in the first quarter of 2011. Free cash flow from operations was a negative $12.9 million, compared to a positive $1.3 million in the previous quarter, and a negative $10.2 million in the first quarter of 2011.
Cash and cash equivalents at March 31, 2012 totaled $26.1 million, compared to $45.7 million on December 31, 2011. The decrease in Q1 was primarily attributable to one-time residual payments of consideration for acquisitions closed in Q4; higher than usual legal, accounting and audit costs associated with corporate development activity; post-consolidation integration costs; and other cash requirements of the business during the quarter, which were in line with previous quarters.
Operational Update The company has undertaken a number of initiatives that support our focus on providing video management software and services to tier one customers around the world. They include:
- Hiring of additional commercial and deployment resources in the high growth areas of Latin America and South East Asia;
- Prioritization of development resources to the Cosmos platform, the technology product which caters to the needs of tier one customers;
- Planned divestiture of non-core business lines: content solutions, digital marketing, and lower-margin broadcast systems integration; and
- Transition of company's current CFO, Robin Smyth, into a Corporate Development role, and the initiation of a search for a new CFO.
Improving Financial Controls and Reporting The company has taken the following steps in light of the recently identified material weakness in financial controls and reporting:
- The company has hired a new Corporate Controller based in New York;
- The company has hired a new Head of Internal Audit based in New York;
- The company has retained one of the Big Four accounting firms to advise on the implementation of best-practice governance and monthly
close policies, as well as to provide advice on the ongoing
implementation of Netsuite to manage financial controls and processes;
- The company has appointed HSBC as global financial services partner to
implement cash management and pooling functions.
Important New Contracts in Q1 2012
- VRT, the large Belgian broadcaster, extended its contract for the provision of online streaming and video-on-demand services;
- Sky Italia, the Italian digital television provider, selected the Cosmos platform to run all of its online video delivery services, mirroring recent similar moves by Sky Germany and Sky UK;
- BSkyB, the British satellite broadcasting and broadband services company, announced the launch of its Sky Now service in the UK, which will run on the Cosmos platform;
- One of Latin America's leading pay-TV providers will deploy their "TV Everywhere" service over the Cosmos platform;
- Voice of America, the multimedia broadcaster providing news broadcasts to an international audience, extended its contract;
- A major telecommunications company in South East Asia chose the company to provide an over the top, multi-device video service through the Cosmos platform and Connected Device Framework; and
- The company signed software license deals with a number of other well-known brands, including: Alstom, AXA, Total, Air France, and LVMH Hennessy.
Completed Capital Raise The company also announced that it has raised gross proceeds of approximately $29.2 million through the sale of common stock. The Company issued to investors 7.0 million shares of common stock priced at $4.17 per share. Investors also received warrants to acquire 5.25 million shares of common stock at an exercise price of $5.00 per share. Canaccord Genuity Inc. acted as sole placement agent.
FY 2012 Updated Outlook For 2012, the company is setting a baseline revenue expectation at $250 million with non-GAAP operating income margins trending toward previous levels in the second half of the year. The company expects to begin generating positive free cash flow from operations no later than the fourth quarter of this year. This outlook is dependent on the company's ongoing strategic review of its business lines and contractual relationships with its customers, and the company intends to provide a more complete outlook in due course upon completion of its comprehensive analysis.
"Over the last several months, we have observed an increase in RFPs issued by major broadcasters and network operators around the world. In each of these opportunities, it is clear that our unique combination of broadcast-grade video management software, world-class professional services, and years of deployment experience is our major point of differentiation," Bar-Cohen said. "With the capital raise and key initiatives announced today, we can now execute on these opportunities and build a growing and cash-generating business."
Conference Call KIT digital's executive management team will host a conference call to discuss its first quarter 2012 results today (May 15, 2012) at 5:00 p.m. Eastern time. To access the conference call, please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
Date: Tuesday, May 15, 2012 Time: 5:00 p.m. Eastern time Dial-in # (North America): +1-877-941-1430 Dial-in # (outside of North America): +1-480-629-9858 Conference ID: 4539178
A live webcast of the call will be available from the Investor Relations section of the Company's corporate website at ir.kitd.com and via replay beginning approximately two hours after the completion of the call. In addition, a replay of the call will be available after 8:00 p.m. Eastern time today and until June 15, 2012.
RM-SYSTÉM, česká burza cenných papírů a.s.
- KIT digital Restructuring Approved; Prepares To Exit Bankruptcy and Change Name to Piksel (06.08.2013 12:16)
- KIT digital, Inc. Takes Legal Action Against utd. by content (02.08.2013 12:12)
- KIT Digital, Inc. - Regulation FD Disclosure (16.07.2013 12:08)
- KIT Digital Inc. - Reorganizační plán - Sdělení pro přímé účastníky RM-S (02.07.2013 13:24)
- KIT Digital Announces Settlement of Securities Lawsuits (01.07.2013 10:31)