KIT digital Reports Record Second Quarter 2010 Results
PRAGUE, CZECH REPUBLIC, Aug 16, 2010 (MARKETWIRE via COMTEX) --
KIT digital, Inc. (NASDAQ: KITD), the leading global provider of video asset management solutions (VAMs) for multi-screen IP-based delivery, reported financial results for the second quarter ended June 30, 2010. All figures are reported in U.S. dollars.
Revenue in the second quarter of 2010 increased 33% to a record $23.1 million from $17.4 million in the previous quarter, and increased 120% from $10.5 million in the same quarter a year-ago. The company's revenues are primarily comprised of software license and maintenance fees, software set-up fees, and technical integration and creative service charges.
For the second quarter of 2010, net loss was $342,000 or $(0.02) per basic and diluted share, compared to a net loss in the previous quarter of $18.4 million or $(1.33) per basic and diluted share, and a net loss in the second quarter of 2009 of $1.6 million or $(0.37) per basic and diluted share.
Net loss for the second quarter 2010 included $3.1 million in non-cash charges, including $1.1 million in stock-based compensation and $2.0 million of depreciation and amortization; a non-cash derivative gain of $2.4 million; $3.3 million in integration expenses related to the reorganization and integration of recently acquired companies; and $886,000 in merger and acquisitions expenses, including investment banking advisory and legal fees.
Operating EBITDA, a non-GAAP metric, which management uses as a proxy for operating cash-flow, increased 42% to a record $4.2 million or $0.20 per basic share in the second quarter of 2010 from $3.0 million or $0.21 per basic share in the previous quarter and increased 526% from $671,000 or $0.16 per basic share in the same year-ago quarter. The company defines operating EBITDA as earnings before derivative income/loss; non-cash stock based compensation; acquisition-related restructuring costs and integration expenses; impairment of property and equipment; direct merger and acquisition expenses; and depreciation and amortization (see important discussion of operating EBITDA in "About the Presentation of Operating EBITDA," below).
Cash and cash equivalents at June 30, 2010 totaled $67.1 million, as compared to $37.8 million at March 31, 2010. The increase was primarily due to the issuance of common stock during the second quarter, offset by payments related to the repurchase of warrants and acquisition of Benchmark Broadcast Systems.
Management employs a natural hedge by matching, as much as possible, currencies of client revenues with currencies of associated client delivery costs and as such does not believe there is material currency-related risk in the business. Management estimates that the impact of foreign exchange rate movements in the second quarter resulted in an approximate 4% decline in U.S. dollar-reported revenues and less than a 1% increase in U.S. dollar-reported operating EBITDA.
Management estimates that approximately 75% of revenue during the second quarter was derived from fees for the company's "VX" IP video platform solutions, while approximately 25% was attributable to professional services. Revenues from the company's Europe, Middle East & Africa (EMEA) division constituted approximately 41% of the total during the quarter, with approximately 36% being derived from the Americas and 23% from Asia-Pacific.
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