KIT digital Reaffirms Guidance, Addresses Eurozone Turbulence and Comments on Recent Events

KIT digital, Inc. KITD reaffirmed guidance for the fourth quarter of 2011 and fiscal year 2012, commented on the general commercial environment, and discussed recent events. Financial Guidance and Eurozone Commentary KIT digital reiterated Q4 2011 guidance of at least $67 million in revenue, EBITDA of approximately $17.5 million and adjusted, or cash, earnings per share (EPS) of $0.33. The company expects to generate at least $2.5 million in free cash flow per month starting in December 2011. The company also reaffirmed its guidance for 2012, including at least $300 million in revenue and at least $1.45 in adjusted, or cash, EPS, with EBITDA margins expected to reach close to 30% by year-end 2012. KIT digital emphasized it retains an overall "positive bias" regarding its 2012 guidance, which it plans to revisit early next year. KIT also confirmed it expects to remain GAAP net income positive going forward. "The market is strong for IP-delivered video and over-the-top premium content, and we have become the leading enabler of these 'TV Everywhere' services for telcos, cable operators and major media companies globally," commented Gavin Campion, president of KIT digital. "While we are obviously aware of the general anxiety around the Eurozone, we benefit from the video technology industry's long-term transition towards OTT content delivery and cloud-based services. Our financial performance has not been affected, and we do not anticipate it will be affected by European macroeconomic and political turbulence. In fact, we have thrived and grown market share through even more turbulent times in 2008-2009, and believe there will be a flight to quality as customers shift their spend to KIT digital versus smaller, underfunded competitors." Recent Insider Sale Commentary On November 21, 2011, a Form 4 was filed related to a 677,000 share disposition of KIT digital common stock by KIT Media Ltd. As filed with the SEC, KIT digital chairman and chief executive officer, Kaleil Isaza Tuzman, was neither a direct nor indirect beneficial seller in the transaction. This transaction was solely for the purpose of a distribution to third party minority holders in KIT Media who are unaffiliated with KIT digital, and the timing of this distribution was pre-determined by KIT Media charter documents and unrelated to market events or share price at the time of the disposition. "I have retained all of my ownership in KIT Media and in KIT digital stock which I had prior to the Form 4 filing last week," said Mr. Isaza Tuzman. "This transaction has zero impact on my ownership in KIT digital and I have not sold a single share of KIT digital stock." As discussed in KIT digital's quarterly and annual filings with the SEC since 2008, KIT Media is an investment vehicle in which Mr. Isaza Tuzman is the lead investor, but which has outside minority shareholders as well. KIT Media's primary activity has been to invest in KIT digital, which it has done alongside other public market investors in multiple public financing rounds since 2008. The pre-planned share disposition by KIT Media was predicted by Mr. Isaza Tuzman on the Q3 2011 earnings broadcast on November 9, 2011, and discussed during previous investor conference calls since early 2010. Mr. Isaza Tuzman has advised the company that KIT Media has complied with its legal obligations to its minority shareholders, and it does not anticipate any additional disposition of KIT digital shares.