JERSEY CITY, N.J., May 15, 2014 ADOTAS) —Kitara Media (OTCBB: KITM), a leading digital media and technology company providing video solutions to advertisers, digital marketers and publishers, today reported financial results for the first quarter ended March 31, 2014.
“We continued our strong organizational growth following the acquisition of Health Guru Media in December 2013, which helped contribute an increase in revenues of 41% over first quarter 2013,” said Bob Regular (pictured), CEO of Kitara Media. “The advanced development of our proprietary PROPEL+ platform is expanding relationships with digital publishers offering a variety of online video formats that improve monetization. Kitara Media remains poised for continued growth in an ever evolving online video advertising market.”
First Quarter Financial Results and Business Highlights
Consolidated revenue for the three months ended March 31, 2014 increased to $6.9 million as compared to $4.9 million for the three months ended March 31, 2013. The growth in revenue was primarily contributed by our recent acquisition of Health Guru Media offset by a slight decrease in revenue from Kitara Media of approximately $300,000 caused by the transition in the mix of revenue concentration from display to video advertising. For the three months ended March 31, 2014, video was 70% of revenue compared to 42% for the three months ended March 31, 2013.
Consolidated margins for the three months ended March 31, 2014 decreased by $30 to $1.28 million as compared to $1.34 million for the three months ended March 31, 2013. The decrease in margin was due to several factors, including reduced bid-pricing levels combined with the consistent costs of securing and maintaining quality publisher inventory. Margins were further impacted by transition of technology during integration of new systems and methods for cost calculation, delivery and optimization.
Consolidated net loss for the three months ended March 31, 2014 increased to a net loss of $2.6 million as compared to a net loss of $141,000 for the three months ended March 31, 2013.
Kitara Media reported a decrease in earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the three months ended March 31, 2014 to negative $2.3 million as compared to a positive $15,000 for the three months ended March 31, 2013 due to higher operating costs with the acquisition of Health Guru Media.
Further details concerning the results of operations for the three months ended March 31, 2014 will be contained in a Quarterly Report on Form 10-Q which Kitara Media anticipates filing later this day with the Securities and Exchange Commission.
Proprietary Technology Platform
During the three months ended March 31, 2014, Kitara Media advanced development efforts with its own proprietary video content and ad delivery solution PROPEL+. This technology leverages campaign performance data for optimization and delivery, and is directly integrated with many video advertising and digital publishing partners. Evolving an integrated Video+ Portfolio with Health Guru Media video formats and a library of premium video content, PROPEL+ combines efficient delivery and optimization into one video platform to deliver strong engagement for advertisers and high revenues for publishers, as well as improve user experience with engaging digital content.
About Kitara Media
Kitara Media is a leading digital media and technology company providing video solutions to advertisers, digital marketers and publishers. With nearly 500 million monthly video ad views, Kitara Media delivers strong engagement for advertisers, high revenues for publishers, as well as improved user experience with PROPEL+, an internally developed proprietary video ad technology platform. Kitara Media owns and operates several online media sites including Healthguru.com and Adotas.com. The company is headquartered in Jersey City, NJ. For more information visit http://www.kitaramedia.com.
Certain information and statements contained in this press release, including those regarding Kitara Media’s capital structure, ability to execute its operating plan, anticipated financial flexibility and other statements that are not statements of historical fact, are forward-looking statements within the meaning of federal securities laws. These statements may be identified, without limitation, by the use of forward-looking terminology such as “anticipates”, “expects,” “will” or comparable terms or the negative thereof. Such statements are based on management’s current estimates, assumptions that management believes to be reasonable, and currently available competitive, financial, and economic data as of the date hereof and we undertake no obligation to update any such statements to reflect subsequent changes in events or circumstances. Forward-looking statements are inherently uncertain and subject to a variety of events, factors and conditions, many of which are beyond the control of Kitara Media and not all of which are known to Kitara Media, including, without limitation those risk factors described from time to time in Kitara Media’s reports filed with the SEC. Among the factors that could cause actual results to differ materially are Kitara Media’s: loss of key advertising customers; inability to acquire new advertising customers; inability to expand its video content library; inability to protect its intellectual property; inability to comply with the covenants in its credit facility; inability to obtain necessary financing or enter into equity arrangements with existing or new institutional shareholders; inability to execute its acquisition strategy; inability to effectively manage its growth; failure to effectively integrate the operations of acquired businesses; competition; loss of key personnel; increases in costs of operations; continued compliance with government regulations; and general economic conditions.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), Kitara Media reports EBITDA and adjusted EBITDA, which are non-GAAP financial measures. Kitara Media calculates EBITDA by taking net income/(loss) and adding back depreciation, amortization and interest expense less interest income, stock-based compensation and taxes. Kitara Media calculates adjusted EBITDA as EBITDA plus merger expenses. Kitara Media uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Kitara Media believes that these measures provide useful information about operating results, enhances the overall understanding of past financial performance and future prospects, and allows for greater transparency with respect to key metrics used by management in its financial and operational decision making. The non-GAAP financial measures should be considered in addition to results and guidance prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP financial measures included in this press release have been reconciled to the nearest GAAP measure in the table following the financial statement attached to this press release.
|Three Months Ended|
|Cost of revenue||5,664||3,598|
|GP as % of revenue||18%||27%|
|Related party expenses||–||85|
|Other operating expenses||1,456||195|
|Depreciation and amortization||110||156|
|Total operating expenses||3,803||1,451|
|Loss before income taxes||(2,610)||(141)|
|EBITDA (a non-GAAP measure)||(2,342)||15|
|Depreciation and amortization||110||156|
|Interest expense, less other income||87||–|
|Stock compensation expense||71||–|
|EBITDA (a non-GAAP measure)||$(2,342)||$15|