SOURCE: KIT digital, Inc.

January 08, 2010 09:33 ET

KIT digital Reports Preliminary Q4 and Fiscal 2009 Results; Sets 2010 Financial Guidance

Company Plans Dual Listing on Prague Stock Exchange

PRAGUE, CZECH REPUBLIC--(Marketwire - January 8, 2010) - KIT digital, Inc. (NASDAQ: KITD), a leading global provider of on-demand software solutions for managing and monetizing Internet Protocol (IP)-based video assets, reported preliminary fourth quarter and fiscal 2009 results, its financial guidance for fiscal 2010, and plans for a dual listing on the Prague Stock Exchange (PSE) in addition to its current NASDAQ Global Market listing.

Preliminary Q4 and Fiscal 2009 Results
Based on preliminary unaudited information, KIT digital management expects revenue for the fourth quarter ended December 31, 2009 to increase 78% over the same year-ago quarter to approximately $16 million. Operating EBITDA margin is expected to exceed 15% for the fourth quarter, versus 0.3% in the same quarter a year ago.

For fiscal 2009, the company expects to report revenue of approximately $47 million, increasing approximately 99% over the previous year. Management expects the year's operating EBITDA to substantially exceed $4 million. The company will provide further results in its complete fourth quarter and full-year earnings press release and conference call which will be announced at a later date.

Management calculates that on an organic basis (prior to any financial contribution by acquisitions), the company exceeded its original 2009 guidance of more than $40 million in revenues, with an operating cash-flow margin of at least 10% for the year.

Fiscal 2010 Financial Guidance
KIT digital management expects fiscal 2010 revenue to increase at least 60% to more than $75 million, with an annual operating EBITDA margin exceeding 17.5%. Management expects the company's operating margin will increase over time, as the company's fixed expenses are leveraged across a larger base of clients, certain client operations and support functions are centralized, and cost synergies from previous acquisitions are fully realized.

"2009 was a milestone year for KIT digital," said the company's president, Gavin Campion. "From an operational perspective, we achieved what we set out to accomplish: strong top-line growth, margin expansion, cash-flow positive inflection point, expansion of our 'VX' platform software capabilities across mobile handsets and IPTV-enabled television sets, and the integration of The FeedRoom and Nunet acquisitions.

"Immediately following The FeedRoom and Nunet acquisitions, we embarked on a substantial realignment of our global operations, in line with our previously stated plan of consolidating core operations in our Prague headquarters and focusing on the next generation of our VX software platform. This realignment encompasses all aspects of the business, and will continue through the current quarter. We believe the resultant efficiencies will establish a strong base for rapid growth in 2010.

"During 2010, we will continue to focus on expanding our existing client base while taking advantage of cross-selling opportunities within The FeedRoom and Nunet client bases, and begin to harness the significant growth potential for IP video in the BRIC countries. We believe the next-generation version of VX -- which we will begin to roll out in Q2 of this year--will underscore that we are the only truly '3-screen' IP video platform provider in the marketplace, supporting the computer browser, mobile handset, and IPTV-enabled television set."

Prague Stock Exchange Listing
The company plans to dual-list its common shares on the Prague Stock Exchange, Czech Republic's main securities market and the second largest Central and Eastern European (CEE) exchange. The listing is expected to take effect in the first quarter of 2010.

Kaleil Isaza Tuzman, KIT digital's chairman and CEO, added: "Given our 2008 acquisition of Prague-based Visual Connection, the consolidation of our R&D and engineering groups and the move of our operational headquarters to Prague last summer, a Prague Stock Exchange listing is a natural fit for us. This listing signals our commercial commitment to the Eurozone and provides a gateway to investment by European-wide and regional CEE investment funds that have expressed interest in our business, but are limited to investing in European-listed securities. We believe the participation of this investment community may improve overall liquidity for KIT digital stock and, ultimately, shareholder value. The listing also enhances the likelihood we will be able to benefit from certain tax and incentive benefits available through the European Union and other bodies."

Based on recent results, management estimates that the company currently generates approximately 65% of its revenue in Europe, Middle East & Africa (EMEA), approximately 20% in Asia-Pacific, and approximately 15% in the Americas.

Petr Koblic, CEO of the Prague Stock Exchange, commented: "We are delighted at the prospect of KIT digital listing on the PSE. The Czech Republic has increasingly become a global center for audiovisual and digital media innovation, and KIT digital represents the best of this trend--a truly global company with strong local roots."

About the Prague Stock Exchange
The Prague Stock Exchange (PSE) is the largest securities market in the Czech Republic and the second largest in Central and Eastern Europe. While Prague's first security and commodity exchange opened in 1861, the present-day PSE was established in 1992. In 2004, the PSE became a full member of the European Securities Exchanges (FESE) in connection with the accession of the Czech Republic into the European Union. That year the U.S. Securities and Exchange Commission officially granted the status of a "designated offshore securities market" to the PSE and included it on the list of reliable offshore exchanges. The PX Index gained 30% in 2009, with an average daily trading volume of 1.8 billion CZK in shares. For additional information, please visit www.pse.cz.

About KIT digital, Inc.
KIT digital (NASDAQ: KITD) is a leading, global provider of on-demand, Internet Protocol (IP)-based video asset management solutions. KIT VX, the company's end-to-end software platform, enables enterprise clients to acquire, manage and distribute video assets across the three screens of today's world: the personal computer, mobile device, and IPTV-enabled television set. The application of VX ranges from commercial video distribution to internal corporate deployments, including corporate communications, human resources, training, security and surveillance. KIT digital's client base includes more than 600 enterprise customers across 30+ countries, including The Associated Press, Best Buy, Bristol-Myers Squibb, Disney-ABC, General Motors, Google, IMG Worldwide, Intel, McDonald's, News Corp, Telefonica, the U.S. Department of Defense, Verizon, and Vodafone. KIT digital maintains principal offices in Prague, Cologne, Dubai, London, Melbourne (Australia), New York, Stockholm and Toronto. For additional information, please visit www.kitd.com.

About Operating EBITDA
Management uses operating EBITDA for forecasting and budgeting, and as a proxy for operating cash flow. Operating EBITDA is not a financial measure calculated in accordance with U.S. generally accepted accounting principles (GAAP) and should not be considered in isolation, or as an alternative to net income, operating income or other financial measures reported under GAAP. The company defines operating EBITDA as earnings before: non-cash derivative income/loss, non-cash stock based compensation; acquisition-related restructuring costs and other non-recurring charges; impairment of property and equipment; merger and acquisition expenses; and depreciation and amortization. Other companies (including the company's competitors) may define operating EBITDA differently. The company presents operating EBITDA because it believes it to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in a similar industry. Management also uses this information internally for forecasting, budgeting and performance-based executive compensation. It may not be indicative of the historical operating results of KIT digital nor is it intended to be predictive of potential future results. Please see the "GAAP to non-GAAP Reconciliation" table in the company's press release, "KIT digital Reports Record Operating Results and New Client Contracts in Third Quarter 2009," issued on November 19, 2009, for further information about this non-GAAP measure and reconciliation of operating EBITDA to net loss for the periods indicated in the release.

KIT digital Forward-Looking Statement
This press release contains certain "forward-looking statements" related to the businesses of KIT digital, Inc. which can be identified by the use of forward-looking terminology such as "anticipates," "believes," "estimates," "expects" or similar expressions. Such forward-looking statements involve known and unknown risks and uncertainties, including uncertainties relating to product development and commercialization, the ability to obtain or maintain patent and other proprietary intellectual property protection, market acceptance, future capital requirements, regulatory actions or delays, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Certain of these risks and uncertainties are or will be described in greater detail in our public filings with the U.S. Securities and Exchange Commission. KIT digital is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any country, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to their registration or qualification under the securities laws of any such country, state or jurisdiction.

Contact Information

  • KIT digital Contact:
    Daniel Goodfellow
    VP, Marketing and Communications
    Tel. +1-646-873-3086
    daniel@kitd.com

    KIT digital Investor Relations Contact:
    Matt Glover
    Liolios Group, Inc.
    Tel. +1-949-574-3860
    info@liolios.com

    Contact for media in the Czech republic:
    Vladimír Bystrov
    Bison & Rose
    Tel.: +420 777 130 788
    vladimir.bystrov@bisonrose.cz