Archive for March, 2012

More Broadcast Vendor M&A: Buyout Speculation Drives Kit Digital Higher

Broadcast Vendor M&A | Posted by Joe Zaller
Mar 29 2012

The stock price of IPTV video delivery specialist KIT Digital continues to be a roller coaster.  Last week the  company’s stock dropped more than 22% in one day following the disclosure that four directors had resigned from the company’s board, and that Kaleil Isaza Tuzman will step down as CEO and become chairman on March 31st.

Today the company’s shares soared after Roth Capital said in a note to investors that KIT Digital is preparing to be sold, with the likely buyers being a private equity firm.

KIT Digital is no stranger to M&A, having bought and rolled up more than a dozen companies over the past few years.  KIT hinted that it might be acquired earlier this month when it announced that it had formed a strategic transaction committee to vet potential offers.

It will be interesting to watch this play out.

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Related Content:

Management and Board Shake Up at KIT Digital Sends Stock Down 22.3 Percent

Kit digital Says its Revenue Doubled in 2011, Forms Strategic Transaction Committee

KIT digital Revenues Jump 98% in Q1 2011, Says M&A Phase is Over and Company Will Now Focus on Organic Growth Strategy

More Broadcast Vendor M&A: Kit Digital Buys ioko for $79.4m, Completes Buying Spree

More Broadcast Vendor M&A: Kit Digital Buys Three Companies for $77m, Says Larger Acquisition is Coming

More Broadcast vendor M&A: Kit digital Acquires Polymedia for $34.4 Million

KIT digital Reports Q4 and Fiscal 2010 Results, Raises Guidance, Says Big M&A Deal Still on Track

Kit digital buys KickApps, Kewego, and Kyte

Kit digital sells $100m of stock, says proceeds will be used to fund broadcast industry M&A activities.

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SeaChange Revenue Falls 11 Percent in Transitional FY 2012

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 29 2012

It has been a transitional year at video on demand solution provider SeaChange International.  The company announced a $5m cost cutting program earlier this year, parted ways with its president, and spun off its broadcast hardware business to newly formed XOR Media.

Today the company announced that its revenue in the fourth quarter of FY 2012 was $51.7m, a decline of 11% versus the same period a year ago.  These results exclude $2.4m in revenues related to discontinued operations, including its decision to sell off its broadcast servers and storage business.  .

Q4 GAAP net loss from continuing operations was $3.5m compared with GAAP net income $11.2m last year. The company said that its net income was impacted by a $3.1m charge related to headcount reduction, and $1.8m of earn-out expenses related to prior acquisitions

Full year FY 2012 revenue was $197.7m, 2% lower than last year.

The full year GAAP net loss from continuing operations was $1.3m, versus GAAP income $31.6m last year when the company realized a $27.1m pre-tax gain on an asset sale.

On a non-GAAP basis the company posted 16.4m of income from continuing operations non-GAAP income of $15.7m last year.

The Company ended fiscal year 2012 with cash, cash equivalents and marketable securities of $93.8m compared to $88.9m at the end of the third quarter of fiscal 2012. The increase in cash was primarily attributable to cash generated from operations.

Despite the challenges SeaChange company has faced over the past year, new CEO Raghu Rau was upbeat about the company’s prospects, saying that in FY 2013 SeaChange will become a leaner and more agile company and drive increased value for its shareholders.

Rau also said the the company will continue to transform itself into a pure-play software company, while lowering its cost structure.   “In addition to the $ 5.0 million in annualized cost reductions announced earlier this year and the significant reductions in operating expenses as a result of the divestiture of the broadcast servers and storage business, we expect further operating expense reductions in the first half of this year through product and market rationalization and reductions in general and administrative costs.”

 

Guidance for Fiscal 2013:

Rau said that the company expects its fiscal 2012 revenue to be in the range of $188m to $200m,  with software revenues to be in the range of $150m to $160m.   The company anticipates that its full year non-GAAP total operating income to be in the range of $19.5m to $23.5m, with software accounting for $17m to $20 m.

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Related Content:

Press Release: SeaChange International Reports Fourth Quarter and Full Year Fiscal 2012 Results

Previous Year: SeaChange Announces Q4 and Full Year 2011 Results

More Broadcast Vendor M&A: SeaChange Sells Broadcast and Storage Business to Financial Buyers

SeaChange Executes Separation Agreement with Former President

SeaChange President Departs, Position Will Not be Replaced

Press Release: SeaChange Announces More Than $5 Million in Annualized Cost Reductions

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Pilat Media Posts Loss in 2011 as a Result of Lawsuit with Fox Television Stations

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 28 2012

Broadcast business management solutions provider Pilat Media announced that its revenue for the full year 2011 was £22.5m, up 3% versus 2010. However, Pilat’s profitability was impacted by the legal fight with Fox Television Stations (FTS) during the year.

Pilat and FTS settled their legal dispute in November of 2011, with Pilat receiving £544,000 from Fox. However, because FTS discontinued the use of Pilat’s software, the company had to write down £2.3m of receivables that would have otherwise been paid by Fox. As a result, Pilat had a loss from operations £900,000 versus a profit of £2.2m in 2010.

Pilat’s 2011 revenue was boosted by higher margin revenue stream such as license and maintenance fees which grew by 7% and 5.6% respectively.  Revenues from professional services, were £13.7m, of 61% of total revenue in 2011 versus 62% in 2010. Significantly, recurring revenue from software maintenance fees represented 26% of the total revenue in 2011, an increase of 5.5% versus 2010.

Gross margins for the year were 51.1%, a decrease of 5.7% versus 2010.  The company attributed the margin compression to staff and training costs associated with bringing new customers online.  The company also said its G&A costs increased during the year (20% of revenue) because of a number of one-off expenses including additional legal fees related to the FTS litigation.

The company said it is strongly positioned for the future and that it expects support and maintenance revenues to continue to grow over in the future as more customer projects are completed. However this growth will be moderated by 5% due the loss of maintenance revenue from FTS.

Commenting on the results, Michael Rosenberg, Chairman of Pilat Media Global plc, said: ”We are pleased that revenues increased to their highest ever level despite the uncertainty in the market that causes some projects to be delayed. The revenue backlog and sales pipeline remain healthy.  The Company is involved in a number of sales opportunities that we are hopeful will be concluded successfully in the Company’s favor in the next few months.”

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Related Content

Press Release: Pilat Media Global PLC 2011 Results

Pilat Media Announce Q3 2011 Results, Says Dispute With Fox Has Been Settled http://dcft.co/H17Alx

Pilat Media and Fox Television Stations Settle Legal Dispute

Pilat Media Posts 1H 2011 Loss Due to Fox TV Stations Lawsuit

Pilat Media Sued by Fox Television Stations, Files Counter Claim for Breach of Contract

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Vislink Reports Full Year 2011 Results, Reaffirms Goal of Growing Revenue by 60% Within Three Years

Broadcast technology vendor financials, Quarterly Results | Posted by Joe Zaller
Mar 27 2012

Vislink plc, which owns the Advent, Gigawave, Link and MRC brands, reported that its revenue for the full year 2011 was £50.3m and increase of 17% versus 2010.

On an organic basis (excluding the £4.5m contribution from Gigawave, which was acquired in June 2011) revenue was £44.7m, up 4% versus 2010.

Broadcast revenue was £42.3m (84% of total revenue), an increase of 16% versus the previous year. Excluding the contribution from Gigawave, 2011 broadcast sales were up 3% versus 2010.

On a geographic basis, broadcast revenue dropped 14% in both Western Europe and North America, the company’s two largest markets.  These declines were offset by strong growth in the Latin America and MEA regions, where sales in 2011 were up 63% and 61% respectively compared to the same period a year ago. APAC revenue was down 1%.

 

Guidance:

Vislink reaffirmed its strategic goal of achieving profitable growth to revenue of £80m within 3 years with an adjusted operating profit margin of 10%.  The company said it expects to meet this goal through a combination of organic growth at 10 -15% per year and “bolt on” acquisitions that strengthen its software and services capabilities, and exploit the growth of cloud based IP transport technologies and content tagging.

 

“2011 was a year of transition for the Group.” said company chairman John Hawkins.  “We achieved the objective of returning the business to profit in the second half of the year; we have growth in underlying revenue and orders received and we have increased our order book. We have improved our margins, substantially reduced the underlying cost base and simplified the management structure.  We have a good strategy based primarily on organic growth coupled with seeking out acquisitions in cellular and IP-driven technology. The successful execution of the strategy will provide long term growth and generate an increase in shareholder value. ”

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Related Content:

Press release: Vislink plc, Results for the year ended 31 December 2011

Previous Quarter: Vislink Reports Q3 2011 Results, Outlines Plans to Double Revenue Over Next Three Years

Vislink plc – Interim results for the six months ended 30 June 2011

More Broadcast Vendor M&A: Vislink Completes Acquisition of Gigawave for £3.75 Million

Vislink Interim Management Statement for 1H 2011

Vislink Says Orders Up in Q1, Expects to Post Smaller Loss for First Half of 2011

Previous Year: Vislink News & Entertainment Revenue Declined 28 Percent in 2010

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Envivio Reports Revenue Was Up 69 Percent in FY 2012, Updates IPO Documents

Broadcast technology vendor financials, Broadcast Vendor M&A, Quarterly Results, SEC Filings | Posted by Joe Zaller
Mar 27 2012

Video encoding and transcoding specialist Envivio, who recently closed a $16.5m fundraising round, said in an updated S-1 (IPO) filing that its revenue for the full year ended January 31, 2012 was $50.6m, an increase of 69% over the previous year.  The company attributed the increase in sales to increased consumer demand for multi-screen video services, and continued growth into the North American market.

Net profit for the full year was $138,000, versus a net loss of $2.5m during the previous year. Operating income for the year was $659,000, versus a loss of $1.99m last year.  Gross margins for the year were 63%, up from 62% during the previous year.

The company ended the year with $27.4m in cash, up from $10m at the end of last year.

Research and development expenses for the year were $6.7m, up 31% versus the previous year due to an increase in personnel-related expenses and professional services.

Sales and marketing costs for the year were $16.2m, up 82% versus the previous year due to increases in personnel-related expenses, commissions and bonuses associated with increased sales, travel expenses, and higher marketing costs.

General and administrative expenses for the year were $8.6m, up 33% versus last year due to an increase in personnel-related expenses and professional services in finance and administration.

The disclosures were made via an updated S-1 (IPO) filing with securities regulators.  Envivio first filed an S-1 in April of 2011, but has not yet become a public company.  However it appears the company is still on the IPO track, as it has updated its S-1 filing several times over the past year.

In January of this year Envivio disclosed that it had raised $16.5m in financing through the sale preferred stock. According to Envivio’s updated S-1 filing the latest round of financing was led by Sageview Capital Master, L.P., which purchased $15m of preferred shares in the company.  Crédit Agricole Private Equity also participated in this round.

Envivio has raised a total of $95.1m since being founded in 2000.

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Related Content:

Envivio S-1/A Filing: Ammended S-1 (IPO) filing with the SEC

Envivio Closes $16.5 Million Fundraising Round

Envivio D/A Filing: Disclosed newly raised funds

TechCrunch Article: On-Demand Video Services Company Envivio Files To Go Public

Previous year: Envivio Says it Doubled Revenue in Fiscal 2011

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Management and Board Shake Up at KIT Digital Sends Stock Down 22.3 Percent

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 23 2012

There were some major changes to the management and board of directors at IPTV video delivery specialist KIT Digital, including the replacement of the company’s CEO and four resignations from its board of directors.

The company said that CEO Kaleil Isaza Tuzman will step down from his position on March 31, 2012 and assume the role of chairman.  He will be replaced as CEO on an interim basis by Barak Bar-Cohen, KIT’s current chief administrative officer.

KIT says it will conduct a search for a permanent CEO.

The company also disclosed in a filing with securities regulators that board member Santo Politi, who chaired the KIT Digital’s compensation committee and served as a member of its M&A committee, resigned from the KIT Digital board “because of differences of opinion with other members of the Board over issues related to the Company’s operations, policies and management.”

KIT also announced the resignation from the company’s board of directors by three members of its management team: Gavin Campion (KIT’s President), Robin Smyth (KIT’s CFO), and Chris Williams (KIT’s CTO).  The company said that Campion, Smyth and Williams “submitted their resignations in order to support the company’s efforts to rebalance its board towards non-management members.  All three will remain in their positions as officers of the company.

For his part, Tuzman said that the move had been planned and will enable him to focus on strategic transactions. “The shift to full-time chairman is a step I have been contemplating for some time. The strategic transaction process, which is underway at the direction of the board’s Special Transaction Committee, is at a pace that requires my dedicated focus and energy, separate to the day-to-day running of the company and investor relations responsibilities. By moving forward today with Barak as our interim CEO, we have built in some structural flexibility over the coming months as we assess strategic options.”

Investors were unimpressed with the news.  KIT’s stock traded down as much as 26% during the day trading and closed down 22.3%, prompting a series of articles about KIT’s performance, including this overview from Yahoo Finance, which highlights some previous drama at the company.

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Related Content:

Press Release: KIT digital Implements Management and Board Changes, Aligns Company for Strategic Opportunities and Operational Success

Kit Digital 8-K filing

Yahoo Finance Article: KIT digital Sinks More Than 20% After Management Shakeup

Kit digital Says its Revenue Doubled in 2011, Forms Strategic Transaction Committee

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More Broadcast Vendor M&A: SeaChange Sells Broadcast and Storage Business to Financial Buyers

Broadcast Vendor M&A | Posted by Joe Zaller
Mar 21 2012

VOD specialist SeaChange International announced that it has signed a definitive agreement to sell its broadcast server and storage business to a group of financial investors, led by a leading US-based venture firm a venture capital group.  Terms of the transaction were not disclosed.

The deal enables SeaChange, which has had a recent management shuffle and has embarked on a cost cutting exercise, to become a pure-play software and services company focusing on back office, video streamers, gateway software and advertising solutions.

The assets of the SeacChange broadcast and storage business are now part of a newly formed company called XOR Media, which will be headed by Zheng Gao who was previously the president of the SeaChange storage and servers business.

SeaChange will become a reseller of XOR Media, but will also work with other server and storage vendors.  SeaChange says it will continue to provide customer service and support to all of its VOD streaming service provider customers, and will also provide customer service and support to any customers who purchase storage products as part of its reseller agreement with XOR Media.

“This divestiture is an important part of our strategy to transform SeaChange into a pure play software company, significantly reduce our overall cost structure, and strengthen our ability to compete in delivering next generation multiscreen video solutions, while generating cash, said SeaChange CEO Raghu Rau. “It’s important to note that this sale is not a parting of ways between SeaChange and the new company XOR Media. We will continue to work together to offer our customers a complete solution. We see this divestiture as a step toward a future relationship – not the ending of one,” Rau added.

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Related Content:

Press Release: SeaChange to Divest its Broadcast and Storage Business

SeaChange Executes Separation Agreement with Former President

SeaChange President Departs, Position Will Not be Replaced

Press Release: SeaChange Announces Departure of Company President Yvette Kanouf

Press Release: SeaChange Announces More Than $5 Million in Annualized Cost Reductions

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More Broadcast Vendor M&A: Miranda Exploring Strategic Options Through Structured Process

Broadcast Vendor M&A | Posted by Joe Zaller
Mar 21 2012

Miranda Technologies said that it has decided to “hold discussions with potential strategic partners as part of the company’s review of ways in which to continue to enhance value and to build on the positive momentum that it has generated over the past two years.”

Separately, Miranda has also announced that it has nominated industry veteran and former Harris Broadcast CEO Tim Thorsteinson as a candidate for the company’s board of directors.

The move comes after several months of activist shareholder drama at the company which began in December 2011 when two investment firms – JEC Capital Partners and JMB Capital Partners – who respectively own approximately 7.1% and 3.1% of Miranda’s outstanding shares — requisitioned a meeting of the shareholders of Miranda to replace four of the seven existing directors of Miranda with four new independent directors.

Against this backdrop, it turns out that Miranda has been exploring its “strategic options” for the better part of a year, and has now decided to move ahead in a more structured way.

Miranda disclosed that it has “received a number of unsolicited expressions of interest regarding potential transactions and partnerships,” over the past year, and had, in May 2011, put in place a committee of its independent directors to review each expression of interest that was received. When this committee believed that an approach might lead to a (M&A) transaction, a non-disclosure agreement was entered into and discussions with the interested party ensued.

To date these discussions have not resulted in deal, because the committee “concluded that the transactions proposed would not reflect full and fair value for the Corporation’s business.”

Now however, the company says there is “growing interest” in Miranda, so the company has decided “that a more structured process should be put in place in order to enable the Corporation to review further expressions of interest and to hold discussions with potential strategic partners.”

The timing of this initiative – a month before the NAB show, and Miranda’s AGM – will certainly make things interesting to watch over the next month as it plays out.

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Related Content:

Activist Shareholder Drama Continues at Miranda Technologies http://bit.ly/yfoMWE

JEC Press Release: Miranda Technologies: Business As Usual – Share Price Declines, Immediate Board Change Needed

Miranda Reports 27% Revenue Increase in 2011

JEC Press Release: JEC Capital Names Proposed Directors of Miranda Technologies Inc.

Miranda Rejects Activist Shareholder Request as Invalid

JEC Press Release: Miranda Technologies Calls Early Shareholders Meeting After Pressure From JEC and Other Concerned Shareholders

Activist Shareholder Remains Convinced That Miranda Technologies is Undervalued

Miranda Responds to Activist Shareholders

Activist Shareholders Seek To Replace Four Board Seats at Miranda Technologies

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Miranda Nominates Tim Thorsteinson as Director

Broadcast technology vendor financials, Broadcast Vendor M&A | Posted by Joe Zaller
Mar 21 2012

Miranda announced that it has nominated industry veteran and former Harris Broadcast CEO Tim Thorsteinson as a candidate for the company’s board of directors.

The company has put Thorsteinson forward for the seat currently held by Thomas Cantwell, who  will retire from the Miranda’s Board at the upcoming Annual General Meeting, scheduled for April 17, 2012.  Thorsteinson is well known by many in the broadcast business, having served in leadership roles at Harris, Leitch, Grass Valley and Tektronix.

Interestingly, Thorsteinson’s name was also put forward by a group of activist shareholders who have been trying to gain control of Miranda’s Board for the past several months.

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Related Content:

Activist Shareholder Drama Continues at Miranda Technologies http://bit.ly/yfoMWE

JEC Press Release: Miranda Technologies: Business As Usual – Share Price Declines, Immediate Board Change Needed

Miranda Reports 27% Revenue Increase in 2011

JEC Press Release: JEC Capital Names Proposed Directors of Miranda Technologies Inc.

Miranda Rejects Activist Shareholder Request as Invalid

JEC Press Release: Miranda Technologies Calls Early Shareholders Meeting After Pressure From JEC and Other Concerned Shareholders

Activist Shareholder Remains Convinced That Miranda Technologies is Undervalued

Miranda Responds to Activist Shareholders

Activist Shareholders Seek To Replace Four Board Seats at Miranda Technologies

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More Broadcast Vendor M&A: Semtech Completes C$500 Million Acquisition of Gennum

Broadcast Vendor M&A | Posted by Joe Zaller
Mar 20 2012

Semtech announced that it has completed the acquisition of Gennum for C$13.55 per share, or approximately C$500 million. The acquisition was financed with a combination of cash from Semtech’s international cash reserves and C$350 million of five-year secured term loans.

Semtech estimates that the acquisition will result in at least C$15m in annual cost synergies by 2014, and will be accretive to non-GAAP earnings.

“Combining Gennum’s 1 Gbps to 25 Gbps signal integrity solutions with Semtech’s 40 Gbps to 100 Gbps SerDes solutions creates one of the industry’s most complete and robust analog and mixed signal portfolios targeted at the communications and enterprise computing segments,” said Mohan Maheswaran, President and Chief Executive Officer of Semtech Corporation. “This will enable us to help customers reduce bottlenecks in the access, metro and core networks, as demand for bandwidth continues to escalate. Moreover, Gennum’s strong position in video broadcast and the emerging HD video surveillance market further diversifies Semtech’s portfolio of high-performance analog semiconductors.”

Following the completion of the acquisition, Gennum Corporation has become Semtech Canada Inc. The shares of Gennum are expected to be delisted from the Toronto Stock Exchange by March 26, 2012, and Gennum will cease to be a reporting issuer under applicable Canadian securities laws as soon as practicable.

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Related Content:

Press Release: Semtech Completes Acquisition of Gennum Corporation

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