KIT digital Reports First Quarter 2011 Results
Summary Q1 2011 Financial Results
Revenue in the first quarter of 2011 increased 5% sequentially to $34.5 million from the adjusted level of $32.8 million in the previous quarter (after subtracting $5.6 million of reported professional services revenues which were sold at the end of 2010 from the reported revenue figure of $38.4 million for the fourth quarter of 2010). As compared to the same year-ago quarter, first quarter 2011 revenue increased 98%. Management estimates that organic growth year-over-year was approximately 38%.
Operating EBITDA, a non-GAAP metric which management uses as a proxy for operating cash-flow, totaled a record $7.1 million in first quarter of 2011, increasing 5% sequentially and 139% over the same year-ago quarter.
Operating EBITDA margin increased from 17.4% in the fourth quarter of 2010 to 20.5% in the first quarter of 2011, largely due to the reduced portion of professional services-related revenues and the increase in software fee-related revenues.
"We were very pleased with our first quarter 2011 results," commented Kaleil Isaza Tuzman, chairman and chief executive officer of KIT digital, "particularly when you consider the lower digital media usage levels and consequent negative seasonality of Q1 over Q4 throughout the industry. With the acquisitions of Kewego, KickApps, Kyte, Polymedia and ioko, we are also excited to have successfully completed the three-plus year aggressive consolidation phase of our corporate development plan. Going forward, we expect the pace of our M&A activity to slow dramatically, as we optimize what we have acquired and focus on organic growth.
"We are also glad to report we have completed the bulk of the restructuring work related to our acquisitions to date, and expect below-the-line restructuring and integration charges to approach zero by the beginning of the third quarter -- two to three months earlier than we originally anticipated. This should allow us to report a 'clean' back-half of 2011, without adjustments to cash EBITDA, allowing for a harmonization of EBITDA and more traditional GAAP and cash-flow metrics."
Given the closing dates of the previously announced ioko and Polymedia acquisitions, management estimates that the company will report approximately $48 million of revenues in the current second quarter, and reiterates its estimates of approximately $210 million of revenues and 23% EBITDA margin for fiscal 2011.
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