KIT Digital Inc.'s (KITD) first-quarter loss narrowed as sales
surged and the company booked fewer charges.
The company, a developer of online video-distribution
technologies whose clients include Google Inc. (GOOG) and Best Buy
Co. (BBY), has has seen demand improve in recent quarters as online
video becomes more popular. However, it also has posted a string of
losses amid expansion-related costs.
KIT Digital has been growing through acquisitions, including a
$79.4-million acquisition last week of ioko365 Ltd., a cloud-based
software provider for multi-screen delivery, helping it gain global
scope in the Internet video platform software sector. KIT in March
reached a $34.4-million deal for Polymedia, the Internet-protocol
video platform unit of TXT e-solutions SpA (TXT.MI).
"We expect the pace of our M&A activity to slow
dramatically, as we optimize what we have acquired and focus on
organic growth," Chairman and Chief Executive Kaleil Isaza Tuzman
said.
The company said its has completed the bulk of its restructuring
related to recent acquisitions and expects to stop taking charges
related to the moves in the second half of the year--sooner than
expected. The company earlier this year moved to a more
regionalized management and delivery structure and anticipates
about $35 million in annual savings.
KIT Digital reported a loss of $12.5 million, or 34 cents a
share, from a year-earlier loss of $18.4 million, or $1.33 a share,
a year earlier. The latest period included a combined $17.3 million
in restructuring and acquisition-related charges. The prior year
included $11.4 million in derivative-related expenses and $7.8
million in restructuring and acquisition-related costs.
Analysts polled by Thomson Reuters most recently forecast a loss
of 8 cents.
Revenue surged 98% to $34.5 million. The company last month
expected at least $34 million. Organic sales--which typically
exclude acquisitions, divestitures and currency impacts--were up
38%.
Shares closed Monday at $10.88 and were inactive premarket. The
stock is down by 32% in the past year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com