IPTV asset management provider Kit digital released its third quarter 2010 results today. It also provided lengthy commentary about the company’s business activity and M&A plans, following on from the recent disclosure that it intends to spend up to $81.75m on M&A.
The company announced that it revenue in the third quarter of 2010 was $27.7m, an increase of 20% from in the previous quarter, and an increase of 151% versus the same period a year ago. On a geographic basis, EMEA contributed 44% of total revenue, with the Asia-Pacific and Americas regions contributing 36% and 20% respectively.
EBITDA for the quarter was $4.4m, up slightly versus the previous quarter, and up 376% versus the same period a year ago. On a GAAP basis, the company posted a net loss of $8m, which includes $5.1 million in non-cash charges, $4.5 million of integration expenses, and $1.3m in M&A expenses. The company posted a GAAP loss of $342,000 last quarter and a GAAP loss of $11.1m in the in the third quarter of 2009.
For the first nine months of the year, the company posted a GAAP loss of $26.8m on revenue of $68.2m, and EBITDA of $11.6m.
For fiscal 2010, the company expects to report revenue exceeding $100m and operating EBITDA of approximately $18 million, up 109% and 267% respectively over the previous year.
“As we prepare for 2011, we see the BRIC markets continuing to be a strong growth driver for KIT digital,” said company president Gavin Campion. “We are already very strong in areas like India, Southeast Asia, Russia and Eastern Europe. So further expansion into Brazil, Greater China and other parts of East Asia are our primary strategic objectives for 2011, as is expansion into certain areas of Europe where we are relatively weak.”
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Recent M&A Activity and Future M&A Outlook
The company also provided detail about its recent M&A activity, saying it has now integrated the operations of recently acquired MAM provider Brickbox Digital Media, video measurement vendor Accela Communications and systems integrator Megahertz Broadcast Systems, which has enabled it to cross-sell and up-sell their respective client bases.
It also disclosed that it has reached a deal to divest some of its professional services activities for more than $12m, in a deal that is expected to close on November 30, 2010, and includes a spin-off a reseller license for the Kit digital’s VX software platform.
Commenting on plans for future M&A, Kit digital chairman & CEO Kaleil Isaza Tuzman said that the company’s aim is to extend its “current estimated 20%-plus global market share to more than 50% within the next 12 to 24 months… through a vanguard of organic growth complemented by highly selective, accretive acquisitions.
“However, we have also recently been considering more transformative acquisition opportunities, where we might be able to acquire a top competitor and significantly extend our market share in one action. It is for this purpose we announced last week that we priced an equity capital raise of $96 million.
“Having raised funds to support our larger acquisition strategy, we are currently working on a key M&A mandate, and expect to announce a material acquisition by Q1 2011.”
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You can read the full Kit digital Q3 earnings announcement here.
Information about Kit digital’s Q2 2010 results are here.
The prospectus for the company’s new share offering is here.
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