UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 17, 2012
KIT DIGITAL, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 001-34437 | 11-3447894 | ||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
| of incorporation) | Identification No.) |
| 26 West 17th Street, 2nd Floor | |
| New York, New York | 10011 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: +1 (646) 553-4845
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)) |
CURRENT REPORT ON FORM 8-K
KIT digital, Inc. (the “Company”)
September 17, 2012
Item 2.05 Costs Associated with Exit or Disposal Activities.
The Company announced today the next phase of the restructuring plan that was first announced in May 2012. This phase will align its operations and streamline general corporate functions. Upon completion of the reductions announced today, the Company’s restructuring program will have achieved a net reduction in workforce of approximately 300 employees, or approximately 22% of its total headcount. The majority of the expense reductions will arise from non-core areas and general and administrative redundancies. The associated savings from employee related expenses is anticipated to be approximately $40 million on an annualized basis.
The Company's actions pursuant to this restructuring plan will take place primarily during the third quarter of 2012 and will be completed by the end of calendar year 2012. The Company currently estimates that it will record a restructuring expense in the third quarter of 2012 of approximately $4.0 million consisting primarily of one-time termination benefits of which the majority will be paid prior to the end of calendar year 2012.
The forward-looking statements contained herein, including those relating to our expectations regarding charges, involve risks and uncertainties. Factors that could cause actual results to differ materially from those forward-looking statements include current economic and other conditions in the global marketplace, competition, the Company's ability to successfully implement its strategic plan and those described in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following are furnished as Exhibits to this Current Report on Form 8-K.
| Exhibit No. | Description of Exhibit | |
| 99.1 | News release issued September 17, 2012 (furnished pursuant to Item 2.05). Any internet address provided in this release is for information purposes only and is not intended to be a hyperlink. Accordingly, no information at any internet address is included herein. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KIT DIGITAL, INC. | ||
| Date: September 17, 2012 | By: | /s/ K. Peter Heiland |
| K. Peter Heiland | ||
| Chief Executive Officer | ||
Exhibit 99.1
KIT digital Restructuring Aligns Expenses with Operations
Restructuring expected to generate net cash savings of $40 million annually
NEW YORK, NY, September 17, 2012 – KIT digital, Inc. (NASDAQ: KITD), a leading video management software and services company, today announced the implementation of significant workforce reductions pursuant to the restructuring program announced earlier this year. This phase will right size its operation and streamline general corporate functions, while maintaining the company’s high standards of customer service and technical delivery.
The restructuring will further enhance efficiencies and focus expertise in the company’s principal areas of operation. The majority of the expense reductions will arise from non-core areas and general and administrative redundancies. The award winning company will continue to invest in its core competencies: KIT Cosmos video content management system (VCMS) software, supported by Managed Services and Professional Services; and the KIT Cloud web-based video-asset management system.
“By accelerating the integration of the company, we will be able to enhance our product offerings, improve time-to-market efficiency, and bring the business to a place of financial strength“ said Peter Heiland, KIT digital’s interim Chief Executive Officer. “While we have completed some non-core divestures and reduced the non essential support infrastructure, we are preserving all of the strategic initiatives surrounding our core competencies as we believe they will drive significant growth”
Upon completion of the reductions being announced today, one substantial component of the entire program, the Company’s restructuring program, which was first announced in May 2012, will have achieved a net reduction in workforce of approximately 300 employees, or 22% of its total headcount. The associated savings from employee related expenses will be approximately $40 million on an annualized basis. This total excludes additional savings from divestitures, which occurred during the second quarter of 2012. Fabrice Hamaide, KIT digital’s Chief Financial Officer, stated, “As we move forward we remain confident in our strategy, competitiveness, and our ability to create value for shareholders”
The Company's actions pursuant to this restructuring plan will take place primarily during the third quarter of 2012 and will be completed by the end of calendar year 2012. The Company currently estimates that it will record a restructuring expense in the third quarter of 2012 of approximately $4.0 million consisting primarily of one-time termination benefits of which the majority will be paid prior to the end of calendar year 2012.
About KIT digital, Inc.
KIT digital (NASDAQ: KITD) is a leading video management software and services company. Cosmos and Cloud, the company's video asset management systems, enable leading broadband media companies to produce, manage and deliver multiscreen socially-enabled video experiences to audiences wherever they are. KIT digital services nearly 2,500 clients in 50+ countries including some of the world's biggest brands, such as Airbus, The Associated Press, AT&T, BBC, BSkyB, Disney-ABC, Google, HP, Mediaset, MTV, News Corp, RCS Media Group, Sky Deutschland, Sky Italia, Telecom Argentina, Telecom Italia, Telefonica O2, Universal Studios, Verizon, Vodafone and Volkswagen. KIT digital maintains headquarters in New York City and offices in more than a dozen countries around the world. Visit the company at www.kitd.com or follow on Twitter at www.twitter.com/KITdigital.
KIT digital Media Contact:
Werbayne McIntyre
Director, Marketing
werbayne.mcintyre@kit-digital.com
Tel. +1-917-513-6081
KIT digital Investor Contact:
Murray Arenson
Managing Director, Financial Strategy
murray.arenson@kit-digital.com
Tel. +1-646-553-4900