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| 8-K - PIKSEL, INC. | v209479_8k.htm |
| EX-2.1 - PIKSEL, INC. | v209479_ex2-1.htm |
KIT
digital Acquires KickApps, Kewego and Kyte, Signaling Era of Video-Driven Social
Media
Alex
Blum, CEO of KickApps, Appointed KIT digital Global COO; Investor Conference
Call Today at 10:30 a.m. Eastern Time
PRAGUE, Czech Republic and NEW
YORK, New York
– January 31, 2011 – KIT digital, Inc. (NASDAQ:
KITD), a leading global provider of cloud-based video asset management solutions
(VAMS) for multi-screen delivery, has separately acquired New York City-based
KickApps, Paris-based Kewego, and San Francisco-based Kyte, for aggregate
consideration of approximately US$77.2 million.
Summary
of acquisition benefits for KIT digital:
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Acceleration
of KIT’s product roadmap by 12-18 months by adding several key technology
and product features, including advanced social media tools (KickApps),
superior mobile publishing and software development kit (SDK) features
(Kyte), and behind-the-firewall and digital signage capabilities for
enterprise clients (Kewego);
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KickApps’
applications and development tools deepen KIT’s ability to integrate new
technology assets and form the foundation for accelerated client
deployments;
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Support
and extension of KIT’s three major client verticals, adding particular
expertise around transportation, automotive, manufacturing and fan-based
media assets (such as sports teams and celebrity
sites);
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Strong
management additions to KIT’s global team, including R&D and business
development hubs in San Francisco and New
York;
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Aggregate
transaction accretive on both a trailing revenue and EBITDA multiple
basis;
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Combined
2010 revenues of acquired companies is estimated to have been
approximately US$25 million, the vast majority of which was derived from
recurring licenses in a software-as-a-service (SaaS) business
model;
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The
acquired companies have been growing between 20-35% per year historically
on a standalone basis;
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Quality
new shareholders, including the appointment to the KIT digital board of
Santo Politi, founder and general partner of Spark Capital, the venture
capital firm behind Twitter, Boxee and
thePlatform.
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“These
strategic acquisitions complement and enhance our existing product offering
while growing our market share across geographies and client verticals,” said
KIT digital's chairman and CEO, Kaleil Isaza Tuzman. “They support the company’s
aim to deliver end-to-end solutions covering each major aspect of Internet
Protocol (IP) video management for our three primary client verticals: network
operators, content distributors and general corporate enterprises. It is
important to note that these acquisition discussions pre-date our public equity
offering completed in December 2010; we have sequenced events purposefully and
the proceeds from that offering continue to be dedicated to support a larger
acquisition which we are currently on track to announce later this
quarter.”
The
aggregate revenues for the three completed acquisitions is estimated to have
been approximately US$25 million in 2010, the vast majority of which were
derived from recurring licenses in a SaaS business model. This compares to KIT
digital’s standalone expectation of more than US$100 million in revenues for
2010 (as provided in its third quarter 2010 press release), of which
approximately 70% is estimated to have been generated from software license and
related fees. Given its strong fourth quarter performance, KIT digital expects
to meet or exceed its 2010 revenue guidance, and generate operating EBITDA of at
least US$18 million in 2010. The company estimates these new acquisitions will
contribute in-line with its previously stated EBITDA target margin of at least
24% in 2011.
“As
important as the extended market reach and financial contribution these
acquisitions provide, they demonstrate our commitment to ensuring that our 'VX-one' video management
platform has market-leading functionality which helps our clients realize value
across the video distribution value chain, from securing and capturing the right
content to delivering it across multiple channels and social communities,” said
Gavin Campion, president of KIT digital. “We are intent on becoming the
one-stop-shop for the video needs of medium and large corporations, delivering
IP video management services from the lenses of the camera shooting the video to
the eye of the person watching it on any device—or, as we like to say, from
'lens to lens.'”
Network
improvements, advances in IP capable mobile devices and changes in media
consumption habits are calling for KIT digital’s customers to respond with even
greater speed and agility when it comes to video production and distribution.
The ability to easily and cost-effectively manage content from one location, yet
reach large and diverse audiences at any time and on any device is increasingly
essential, as are related monetization and social media tools. Integration with
social media-driven communities in particular has become progressively more
important in order to foster engagement around video content and the messages it
carries.
Each of
the acquired operations addresses these challenges, adding award-winning
capabilities to enable custom and rapid deployment of value-added video
management tools in a number of use-cases, including mobile, the digital home,
enterprise, digital signage and social platforms. As importantly, these
acquisitions strengthen and expand KIT digital's client base and operational
presence in the U.S. and Western Europe.
CEO
of KickApps, Alex Blum, Appointed Global COO of KIT digital
In
conjunction with these acquisitions, the CEO of KickApps, Alex Blum, has been
appointed to the new position of global chief operating officer of KIT digital.
Blum was an early pioneer of online video and interactive TV as vice president
of products at AOL—where he led product strategy encompassing 60 different media
and social oriented products across AOL’s Dulles, New York and Mountain View
offices—and is noted for having championed linear broadcast Internet TV as
president and COO of JumpTV. At KickApps, he has led one of the Web’s most
innovative and fastest-growing social software companies, which has been
recognized by numerous industry awards.
In his
new role at KIT digital, Blum will be responsible for the overall business
operations of the company, including product management, research and
development, client operations, network infrastructure, and business operations.
Although he will be based in KIT digital's headquarters in Prague, Czech
Republic, he will spend significant time at the company's newly acquired
research and development centers in New York and San Francisco.
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“As one
of the industry's true pioneers and foremost innovators, we are thrilled to
welcome Alex to the KIT digital team,” said Isaza Tuzman. “I’ve worked
extensively with Alex in the past and I know we share a common vision for the
future—where network operators, content owners and general corporate enterprises
alike can manage video content centrally but deliver content across any platform
or device, while staying close to their customers and internal constituents
through deep links into the online social experience.”
Commented
Blum: “I’m excited to join KIT digital at such a pivotal time for both the
company and the industry. I believe that the combined product offering of these
acquisitions will allow us to leapfrog pure-play OVPs and enterprise social
software companies, and enter a new era of socially-enabled video. We’ve spent
far too long in a broadcast-centric world of one-way communications, and now
with the backing of KIT digital’s VX-one product portfolio, we
have the opportunity to lead the new world of interactive, socially-driven
communications and entertainment.”
“We have
been observing the trend of convergence between social media and IP video
platform provision for some time,” added Santo Politi, founder and general
partner of Spark Capital and board member of KickApps. “We are very bullish on
the prospects of this combination. In fact, we insisted on taking KIT digital
stock in this transaction as opposed to cash and will be important supporters of
the company going forward.”
Aggregate
Acquisition Terms
The
aggregate consideration paid for the acquisitions of KickApps, Kewego and Kyte
was approximately US$77.2 million on a cash-free, debt-free basis. This
consideration is inclusive of time-based and performance payments, but excludes
certain incentive compensation programs for the personnel of acquired companies,
which are estimated not to exceed US$4.0 million over a period of years, in a
mix of cash and equity.
Approximately
US$62.3 million will be paid in KIT digital common stock (based on the closing
market price on Friday, January 28, 2011), with approximately US$14.8 million
paid in cash. In aggregate, the transactions are expected to be accretive on
both a 2010 revenue and EBITDA multiple basis, while meeting or exceeding KIT
digital's EBITDA margin target of at least 24% for 2011.
The total
number of shares expected to be issued over time in association with the three
acquisitions is approximately 4,611,346 of which 96% are subject to staggered
resale restrictions between 12 and 24 months.
Following
the completion of these acquisitions, including payment of deal-related fees and
charges as well as payments of approximately $4.2 million in net positive
working capital adjustments, management estimates KIT digital will have
approximately 37.9 million common shares outstanding and approximately US$115
million in cash.
The
KickApps Acquisition
On
January 28, 2011, KIT digital completed the acquisition of privately-held
KickApps Corporation, based in New York City. Founded in 2005, KickApps is a
leading provider of solutions that enable the creation and management of next
generation video-based Web experiences.
KickApps’
solutions consist of a suite of hosted social and media
applications and services that drives deeper relationships with customers,
and which are used by some of the world’s largest brands to grow and engage
online audiences. Its more than US$12 million in annualized revenues are derived
almost entirely from recurring software license
fees.
PAGE 3 OF
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KIT
digital paid consideration of approximately US$44.7 million for KickApps on a
cash-free, debt-free basis, and all in shares of KIT digital common stock that
are subject to lock-up provisions—which will help ensure KickApps’ shareholders
and management's long-term commitment and upside in the combined
business.
KickApps
offers a suite of self-serve deployable social solutions that are created using
a drag-and-drop Web-based toolset. The applications range from fully realized
social website experiences to simple social widgets for commenting and ratings,
mood polling, and video playback, all of which are tightly integrated with
robust media moderation, member management and reporting. The platform also
includes KickApps’ proprietary WidgeADs ad format, comprised of
socially-enabled, dynamically updated ad units that can be served in any
IAB-standard ad slot and shared by users across the social Web.
KickApps
has received several industry awards and accolades, including the 2010 IBM
Innovation Award for Social Commerce, 2010 SAMMY for Best Social CRM (H&R
Block deployment) and Best Social Platform (AppStudio), 2009 DPAC for Best
Social Media Platform, 2009 SAMMY for Best Social Community (Ovation TV) and
2008 BusinessWeek: Best of the Web. The company was also named to Silicon
Alley Insider’s 2010 list of the 100 Most Valuable Startups, and OnHollywood’s
list of the top 100 Most Valuable Private Companies.
KickApps
adds significant technology and product synergies to KIT digital.
KickApps’ Open Source Media Framework (OSMF) App Studio will serve as a
unification point for all publishing-layer technologies across KIT digital's
family of products. Using the OSMF App Studio, a Web-based Media Player
authoring solution, will enable clients to leverage KIT's infrastructure to
deliver fully customized Flash and HTML5 deployments no matter which module of
the VX-one platform
they have currently deployed.
“KickApps’
innovative and proprietary suite of social media applications are a perfect
strategic fit for us,” commented Campion, “adding powerful social tools and
player authoring capabilities to our software platform solutions. Its
applications will also help us reduce our marginal cost of customized interface
development and dramatically reduce the speed of our custom player deployments
versus the competition. We see extensive and attractive cross-selling
opportunities in our respective client bases, and plan to mine KickApps’
capabilities immediately in the global geographies we cover.”
KickApps
450+ clients include NBC Universal, American Express, ASCAP, GORE-TEX, Hearst,
H&R Block, Live Nation, Liverpool Football, The Phoenix Suns, ProSieben,
Scholastic, Scripps Network, Simon & Schuster, Viacom, The Washington
Redskins and The Weather Channel.
According
to Blum: “The majority of our clients operate significant consumer-facing
portals and we believe this represents a ripe opportunity to add a more dense
feature set and multi-screen functionality with a suite of mobile and connected
TV applications running on one of KIT digital’s VX modules. This, combined with
KIT digital’s global footprint, makes the combination of our forces particularly
exciting and highly beneficial for our client base. To date, we have been a very
product and R&D focused company, and we believe the merger with KIT digital
and its commercially-focused culture will open up global sales opportunities for
our product set.”
Added
Isaza Tuzman: “The Kewego and Kyte acquisitions are each consistent with our
historical approach, in which we expect them to be accretive on both a revenue
and operating cash-flow multiple basis pro forma of ‘day one’ synergies. We
expect KickApps to be financially accretive on a standalone basis within the
first several quarters of ownership, but the transaction rationale was also
based on how its powerful, proprietary social-media platform technology extends
KIT’s product offering and differentiates us from our competition, and
accelerates our medium- and long-term growth.
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“Video
has become a highly customized, interactive, and social experience. Publishers
need to deliver experiences their viewers will want to consume, interact with
and share across multiple platforms. They also want to easily monetize these
experiences through advertising, ecommerce or as part of a broader online
business offering.
“Coming
together with KickApps will create an offering that enables publishers to easily
and cost-effectively create and deliver highly customized and interactive video
experiences, making KIT digital an instant market leader in socially-enabled IP
video solutions. We anticipate that the positive ripple effect of KickApps
across our KIT VX-one
user base will be substantial, and that KickApps’ management will contribute
greatly to our future success.”
KickApps
has approximately 60 staff members and is headquartered in New York City, with
primary sales offices in Los Angeles, San Francisco, London and Austin. KickApps
CFO David Lapter will assume the role of SVP of business administration at KIT
digital and be based in Prague. For more information about KickApps, go
to www.kickapps.com.
Janney
Montgomery Scott LLC acted as financial advisor to KIT digital in this
transaction.
The
Kewego Acquisition
On
January 26, 2011, KIT digital completed the acquisition of privately-held Kewego
SA, based in Paris, France. Founded in 2003, Kewego provides enterprises, media
operators, and communication agencies with professional IP-based, multi-screen
video asset management solutions for managing, broadcasting and monetizing
videos on IP connected devices, including PCs, mobile phones, iPads, connected
TVs, and gaming consoles.
Kewego
reported fiscal 2010 revenues of approximately US$10.2 million, the large
majority of which was derived from recurring software license fees. Kewego is
profitable on a standalone basis.
KIT
digital paid consideration of approximately US$26.7 million on a cash-free,
debt-free basis, comprised of US$11.7 million in cash and the remainder in
shares of KIT digital common stock. Stock consideration is subject to lock-up
provisions, which will help ensure Kewego’s shareholders and management's
long-term commitment and upside in the combined business. The transaction is
expected to be immediately financially accretive on both a revenue and operating
cash-flow multiple basis.
Kewego
has received several industry awards, including the OSEO Excellence Award for
innovation, the 2010 Deloitte Technology Fast 50 for being one of the 50 fast
growing companies in France, and the 2009 Net 20 award given by the Benchmark
Group for the best IP video solution. Kewego dramatically strengthens KIT
digital’s footprint in Western Europe—particularly in France and Spain—where
Kewego is the clear market leader.
Michel
Meyer, co-founder and CEO of Kewego, will assume the role of senior vice
president of product management, and Olivier Heckman, general director and
co-founder of Kewego, will become vice president of sales for Western and
Southern Europe at KIT digital (including coverage of France, Benelux, Spain,
Portugal and Italy). Both bring a wealth of experience in delivering robust,
scalable solutions for a blue-chip client base across several industry vertical
segments, including media, financial services, automotive and transportation.
Meyer and Heckman previously co-founded MultiMania SA in 1995, a French-language
leader in website hosting that they sold to Lycos Europe (Bertelsmann group) in
2001 for €220 million. Meyer was previously CEO of Lycos France and
Heckman was previously managing director of products at Lycos
Europe.
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Kewego’s
platform brings to KIT digital a large set of robust application programming
interfaces (APIs) that enable third party development and an agency ecosystem to
drive sales channel partnerships. Kewego’s software solution is deeply
integrated with ad networks and has extensive social media publishing
capabilities, including notable return-on-investment tools. Kewego provides
integrated “viral boosters” that push customer content to social networks
in order to enhance reach, and has established a partnership with YouTube that
enables Kewego customers to protect their intellectual property more effectively
while maximizing their presence on the site.
“Though
we have our share of media clients, our sweet spot has always been helping large
corporate enterprises to communicate, inform and educate internal and external
stakeholders using video,” said Meyer. “For years, we have seen increasing
demand from these enterprise clients to deliver content in any format across
multiple IP-based platforms and devices. Joining forces with KIT digital allows
us to better answer our clients’ needs at a global level with the most extensive
VAMS product portfolio in the market. KIT digital will benefit from our
dominance in the French and Spanish markets, our presence in Germany, Benelux,
Scandinavia and other European markets, and our deep expertise in general
corporate video workflow.”
Kewego
also enhances KIT’s enterprise offering through onsite, digital signage
deployments. Large corporate customers who want to run their own video
programming across intranets can also use the Kewego platform to deliver IP
video content to internal publishing points through dedicated LCD screens
located on customer premises.
“Kewego
clearly extends our product capabilities in our enterprise vertical, underlines
our leadership in Europe, and provides important synergies in terms of business
development with pan-European and global corporations, behind-the-firewall
deployments and multi-platform deployments,” added Campion. “While KIT digital
has achieved the leading market share position for enterprise-class IP-based
VAMS on a global basis, together with our current strength in Germany, the
acquisition of Kewego makes us the clear number one provider in all of
continental Western Europe.”
Kewego
adds more than 400 clients across 16 countries, including Atos Origin, AXA, BNP,
Chello Media, EADS/Airbus, Lagardère, L'Equipe, Microsoft, Pages Jaunes, la SPQR
and Volkswagen.
Paris,
Grenoble (France) and Madrid will continue to be home to Kewego’s approximately
60 employees, with Paris becoming an integral part of KIT digital's existing
Europe, Middle East & Africa (EMEA) sales and account management operations.
For more information on Kewego, go to www.kewego.com.
The
Kyte Acquisition
On
January 25, 2011, KIT digital acquired privately-held Kyte, a leading
cloud-based publishing platform that enables companies to deliver live and
on-demand video experiences to websites, mobile devices and connected
TVs.
Founded
in 2006 and based in San Francisco, Kyte’s advanced mobile distribution and
social media integration capabilities enable media companies and enterprises to
reach, engage and monetize audiences. It reported fiscal 2010 revenues of US$3.7
million, derived primarily from SaaS platform fees.
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KIT
digital paid consideration of approximately US$5.7 million on a cash-free,
debt-free basis, plus certain future management incentive payments. The
consideration was comprised of US$3.1 million in cash and the remainder in
shares of KIT digital common stock. The transaction is expected to be
financially accretive on both a revenue and operating cash-flow
basis.
Content
creators on the Kyte platform produce live or on-demand video through a variety
of online and mobile production tools. Content is delivered through the Kyte
player, branded social network applications, applications for Internet connected
devices and custom-developed API integrations, while simultaneously reaching a
mobile audience through Kyte-powered branded mobile websites and native
applications.
Kyte’s
multimedia chat, RSS, Twitter and Facebook notification services keep audiences
up-to-date with the latest content and channel activity. Sharing/embedding tools
and social network applications encourage viral distribution across the Web and
promote organic audience growth.
“Kyte is
recognized as having the most advanced mobile publishing technology in the
marketplace, and has an aggressive and talented management team,” said Isaza
Tuzman. “We plan to leverage Kyte’s proprietary platform and application
frameworks to serve and expand KIT’s global client base. The acquisition also
adds a strong West Coast presence in the U.S., which we will use as a
R&D and business development hub.”
Kyte was
named 2010 Streaming Media Editors' Pick for its vision and execution
in the online video industry, describing it as the “the most innovative, most
important, and just plain coolest stuff in online video.”
Kyte
brings key additions to KIT digital’s management team as well, including Erik
Abair, chief technology officer and co-founder of Kyte, and Gannon Hall, Kyte’s
chief operating officer. Abair will join KIT’s product development team as
senior director of software development to help innovate and drive the next
generation of KIT products, while Hall will become KIT’s executive vice
president of global marketing, where he will oversee the company’s outbound
marketing, communications and demand generation efforts. Abair will remain based
in San Francisco, while Hall will relocate to KIT’s Prague
headquarters.
Kyte’s
chief operating officer, Gannon Hall, commented: “KIT digital's global presence,
strong entrepreneurial spirit and commitment to innovation made this merger
clearly superior to other strategic opportunities. KIT’s scale and expertise
make it possible for Kyte to realize the full potential of its pioneering
innovations in online and mobile video, including new opportunities in the
over-the-top (OTT) connected device and enterprise video markets.”
Kyte adds
nearly 100 clients, including CBS, Clear Channel, FOX News, MTV, Walt Disney
Company, Nokia, Publicis, Swatch, Oprah Winfrey, and ESPN Europe.
Kyte has
approximately 50 total staff members and is headquartered in San Francisco with
a sales office in London. For additional information on Kyte, go to
www.kyte.com.
Management
Commentary
“From an
integration standpoint, there are important advantages to acquiring these
companies simultaneously, particularly with regard to platform integration and
client migration,‘’ said Campion. “Much of the corporate, personnel and
technology integration activity can now happen in parallel and with less overall
disruption to the organization than a scenario where the businesses were
acquired sequentially. This simultaneous acquisition model is one we have
executed on previously, so we have become adept at the post-acquisition
‘corporate on-boarding’ process, while also being able to immediately leverage
cross-selling opportunities.
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“We
expect to see an immediate 25-35% reduction in the applicable, combined SG&A
as a result of these acquisitions. We also expect to realize US$9.0+ million in
product development/R&D savings over time, coupled with an acceleration of
our product roadmap by 12-18 months. This supports our fiscal 2011 EBITDA margin
target while maintaining product leadership in our category. Given the
architecture of the platforms we acquired and the way we are combining our
respective offerings, we are highly confident this process will be seamless for
clients.
“In fact,
we believe our customers, both pre-existing and newly acquired, are going to be
very pleased with the significant benefits they will enjoy in terms of new and
enhanced features appearing in VX-one—particularly in terms of
social media, mobile publishing and behind-the-firewall
implementations.”
Isaza
Tuzman commented: “We believe that in five to ten years’ time virtually all
mid-size and large companies will be buyers of IP video management software, and
KIT is uniquely able to bridge the gap between the traditional digital video
systems of today and the Internet-driven solutions of tomorrow. We realize
we must move fast, which is why we are complementing growth among our existing
customers with an acquisition strategy that sees us consolidating the
industry.”
Over the
last two years, KIT digital has signaled its intention to extend its market
leadership through acquisitions, complementing its organic growth. The company
recognizes that the VAMS industry is going through a similar process of
widespread adoption and competitor consolidation as the enterprise resource
planning (ERP) industry went through in the 1990s and early 2000s. KIT’s stated
aim is to achieve 50%+ market share in its segment by the end of 2012 through a
combination of organic growth and accretive acquisitions.
“Today’s
acquisitions are transformative to our business from a product and management
perspective, while anchoring us more strongly in the U.S. and Western European
markets,” added Isaza Tuzman. “In general, we believe we are approaching a
threshold where economies of scale in client delivery and R&D will be
particularly powerful, and optimize the strategic value for the
company.”
The
acquisitions of KickApps, Kewego and Kyte were separately negotiated, and the
companies have no common ownership. A Form 8-K describing each of the
transactions in more detail is being filed with the U.S. Securities and Exchange
Commission.
Changes
in Board of Directors
In
conjunction with the announced acquisitions, the company is appointing two new
independent directors, Paul Ostergaard and Santo Politi. Kamal El-Tayara has
stepped down from his position to focus his time on other matters. Following
these changes, the company will have ten directors.
“We are
grateful to Kamal for his dedicated service and contributions to the KIT digital
board over the past three years, and wish him the best on all his future
endeavors.” said Isaza Tuzman. “At the same time, we are delighted to add two
great new independent directors to the board who have deep operating and
investment expertise in SaaS and digital media.”
Ostergaard
is CEO and founder of ShipServ, the world's leading maritime e-marketplace. For
its revolutionary approach, ShipServ received the Red Herring 100 Europe 2008
Award, which recognizes Europe's most innovative technology companies, and the
First Tuesday Award 2009 for the most promising UK technology business.
Ostergaard was previously the director of strategy for Oracle Online at Oracle,
and holds an MBA from Harvard Business School.
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Politi is
the founder and general partner of Spark Capital, the venture capital firm
behind KickApps as well as emerging market leaders such as Twitter, Boxee, 5Min,
AdMeld, Verivue and Tumblr. Prior to the KickApps acquisition, he served on
KickApps’ board of directors, and was previously the president of new media for
Blockbuster Entertainment. Politi has been named multiple times to the Forbes
Midas List, which ranks top venture capitalists who have created the most wealth
for their investors. He earned his MBA in finance from The Wharton School
of Business at the University of Pennsylvania.
Investor
Conference Call
Further
details of these transactions and the company’s 2011 business plan will be
presented in an investor conference call hosted by KIT digital management at
10:30 a.m. Eastern time today:
Date:
Monday, January 31, 2011
Time:
10:30 a.m. Eastern time (4:30 p.m. Central European time)
Dial-in #
(North America): +1-800-862-9098
Dial-in #
(outside of North America): +1-785-424-1051
Conference
ID: 7KITDIGITAL
Please
call the conference telephone number 5-10 minutes prior to the start time. An
operator will register your name and organization and instruct you to wait until
the call begins.
If you
have any difficulty connecting with the conference call, please contact Liolios
Group at +1-949-574-3860.
An online
replay of the entire broadcast and Q&A will be available via the Investor Relations
section of the company’s website later that
day. A telephone replay of the call also will be available after 1:30 p.m.
Eastern time and until February 28, 2011:
Toll-free
replay # (North America): +1-877-870-5176
International
replay # (outside of North America): +1-858-384-5517
Replay
pin number: 11023
About
KIT digital, Inc.
KIT digital (NASDAQ: KITD) is a leading
global provider of video management solutions for multi-screen delivery. KIT
digital's global client base includes approximately 1,300 customers across 40+
countries, including The Associated Press, BBC, Best Buy, Bristol-Myers Squibb, Disney-ABC, FedEx,
General Motors, Google, Hewlett-Packard, Home Depot, IMG Worldwide, ESPN Star,
MediaCorp, News Corp, Telefonica, Universal Studios, Verizon and Vodafone. KIT
digital is operationally headquartered in Prague, and maintains principal offices in Atlanta, Beijing,
Boston, Buenos Aires, Cairo, Cambridge (UK), Chennai, Cologne, Delhi, Dubai,
Kolkata, London, Los Angeles, Melbourne (Australia), Mumbai, New York (executive
office), Singapore, Sofia, Stockholm, Taipei and Toronto. For additional information, visit
www.kitd.com or follow the company on Twitter at www.twitter.com/KITdigital.
PAGE 9 OF
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About
the Presentation of 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
integration expenses; 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. See "GAAP to non-GAAP
Reconciliation" table in the company's third quarter 2010 results press release
available in the new section of the company’s website for further information
about this non-GAAP measure and reconciliation of operating EBITDA to net loss
for the periods indicated.
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 "believes," "expects," "plans" or similar
expressions. Such forward-looking statements involve known and unknown risks and
uncertainties, including but not limited to uncertainties relating to
integration of acquired businesses, operations in multiple locations, product
development and commercialization, 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. Other than as required by Federal securities law, KIT digital is not
under 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.
KIT
digital Company Contact:
Adam
Davis
Global
Communications Manager
Tel.
+1-609-468-9500
adam.davis@kitd.com
KIT
digital Investor Relations Contact:
Matt
Glover or Geoffrey Plank
Liolios
Group, Inc.
Tel.
+1-949-574-3860
info@liolios.com
KIT
digital Media Contact:
Alexis
Wilson
Edelman |
Corporate & Public Affairs
Tel.
+1-212-704-8291
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