KIT Digital 1Q Loss Narrows On Fewer Charges, Surging Sales

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; [e-mail]