6-K 1 velti6k123110.htm FORM 6-K WebFilings | EDGAR view
 


 
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 
 
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
 
FOR THE MONTH OF MARCH, 2011
 
COMMISSION FILE NUMBER: 001-35035
 
 
Velti plc
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant's name into English)
First Floor, 28-32 Pembroke Street Upper
Dublin 2, Republic of Ireland
Attn: Alex Moukas, Chief Executive Officer
353 (0) 1234 2676
(Address of principal executive offices)
 
  
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F  R Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):___
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):___
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No R
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
 
 
 

 

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INFORMATION CONTAINED IN THIS FORM 6-K REPORT
 
This report contains Velti's fourth quarter 2010 earnings press release.
 
EXHIBITS
 
Exhibit Number
 
Description
 
 
 
 99.1
 
Press release issued by the registrant on March 16, 2011 entitled “Velti Announces Fourth Quarter and Fiscal Year End 2010 results"
 
 
 

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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, thereunto duly authorized.
 
VELTI PLC
(Registrant)
 
 
By:
 /s/ Wilson Cheung
Name:
Wilson Cheung
Title:
Chief Financial Officer
 
 
Date: March 16, 2011
 

 

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FOR IMMEDIATE RELEASE                            
 
VELTI ANNOUNCES Fourth Quarter and Fiscal Year End 2010 RESULTS
 
Dublin, Ireland and San Francisco, CA -Mar. 16, 2011- Velti plc (Nasdaq: VELT; AIM: VEL),
the leading mobile marketing and advertising technology provider for brands, advertising agencies, mobile operators and media, announced its financial results for the fourth quarter and fiscal year ended December 31, 2010.
Financial Highlights
•    
Q4 2010 revenue of $57.5 million; fiscal 2010 revenue of $116.3 million
•    
Q4 adjusted EBITDA of $22.5 million; fiscal 2010 adjusted EBITDA of $27.2 million
•    
Q4 GAAP net income of $2.0 million and EPS of $0.05; fiscal 2010 GAAP net loss of $15.7 million and EPS of $0.41
•    
Q4 adjusted net income of $13.5 million and adjusted EPS of $0.34; fiscal 2010 adjusted net income of $3.0 million and adjusted EPS of $0.07
 
“2010 was a year of very significant growth and opportunity for Velti,” said Alex Moukas, Chief Executive Officer. “We recorded record revenue, while sharpening our focus on becoming the world's most widely distributed SaaS (software-as-a-service) platform for mobile marketing and advertising.”
“We cemented strategic relationships with top brands - either directly or through our rapidly developing indirect channel of advertising agencies - including Coca Cola, Ford, General Motors, HP, IBM, Intel, Lands' End, Levi's, Limited Brands, Mars, Orange, Shell, Telefonica, T-Mobile, Verizon and Vodafone. Our leadership position with these global marketers gives Velti a unique opportunity to grow as spending on mobile climbs toward an estimated $29.9 billion in 2014, according to ABI Research.”
“Furthermore, our 2010 acquisition of Mobclix, the leading exchange for ad inventory with 18,000 mobile applications, is already contributing to current revenues. Along with CASEE, China's largest mobile advertising exchange in which Velti has a strategic investment, Mobclix is now being leveraged across Velti's global platform to form a marketplace for enabling media companies, mobile operators, agencies and brands to efficiently and transparently buy and sell mobile inventory and optimize marketing campaigns. At launch, thousands of mobile applications and hundreds of premium mobile publishers are represented in the mGage Marketplace, which already records transaction volumes in excess of 11 billion monthly ad impressions.”
“Velti mGage SaaS platform has been critical in the rapid expansion of our global footprint in more than 30 countries, providing the worldwide ability to reach more than 2.5 billion mobile consumers. More than 825 brands and advertising agencies that belong to all of the “big four” agency holding groups, and 8 of the 10 largest mobile operators worldwide (based on number of subscribers) used Velti mGage in 2010 executing more than 2,700 campaigns, compared with 450 customers in 2009 and 243 in 2008.”
Revenue and Business Growth
For the fourth quarter of 2010, Velti reported revenue of $57.5 million, compared with $20.6 million in the prior quarter ended September 30, 2010. On a GAAP basis, net income for the fourth fiscal quarter ended December 31, 2010 was $2.0 million or $0.05 per share, compared with a net loss of $6.0 or $0.16 per share, in the prior quarter ended September 30, 2010. On a non-GAAP basis, adjusted net income for the fourth fiscal quarter ended December 31, 2010 was $13.5 million. Adjusted EBITDA for the fourth quarter ended December 31, 2010 was $22.5 million, compared with $3.3 million reported in the third quarter ended September 30, 2010.
 

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Velti's total revenue has grown to $116.3 million for the year ended December 31, 2010, an increase of 29% from $90.0 million for the fiscal year ended December 31, 2009. On a GAAP basis, net loss for fiscal year ended December 31, 2010 was $15.7 million or $0.41 per share, compared with a net income of $6.5 million, or $0.17 per share, in the 2009 fiscal year.
On a non-GAAP basis, adjusted net income for fiscal year ended December 31, 2010 was $3.0 million or $0.07 per share, compared with adjusted net income of $11.1 million, or $0.29 per share, in the fiscal year ended December 31, 2009.
Velti's business strategy is to become the world's most widely adopted SaaS platform for mobile marketing and advertising. Since 2009, the Company has focused intensive technology acquisition and development, deployment and sales efforts on making its platform, called Velti mGage, a standard for planning, delivering, analyzing and optimizing end-to-end mobile marketing campaigns around the world.
Use of Non-GAAP Measures
This press release includes non-GAAP financial measures such as adjusted EBITDA, adjusted net income and adjusted earnings per share. These non-GAAP financial measures are not a measure of financial performance or liquidity calculated in accordance with accounting principles generally accepted in the U.S., referred to herein as GAAP, and should be viewed as a supplement to, not a substitute for, our results of operations presented on the basis of GAAP. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures are detailed in the table below.
Our non-GAAP measures should be read in conjunction with the corresponding GAAP measures. These non-GAAP financial measures have limitations as an analytical tool and you should not consider them in isolation from, or as a substitute for, analysis of our results as reported in accordance with GAAP.
We define adjusted EBITDA as net income (loss) before provision for income taxes, interest expense, gains or losses from our equity method investments, foreign exchange gains and losses, depreciation and amortization, share-based compensation expense, acquisition related and non-recurring expenses. Adjusted EBITDA is not necessarily comparable to similarly-titled measures reported by other companies.
We define adjusted net income by excluding one-time losses from equity method investments and acquisition-related depreciation and amortization, in addition to the items excluded from adjusted EBITDA.
Adjusted earnings per share is adjusted net income divided by diluted shares outstanding.
We believe these non-GAAP financial measures are useful to management, investors and other users of our financial statements in evaluating our operating performance because this financial measure is an additional tool to compare business performance across companies and across periods. We believe that:
•    
these non-GAAP financial measures are often used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, depreciation and amortization and foreign exchange gains and losses, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired; and
•    
investors commonly use these non-GAAP financial measures to eliminate the effect of restructuring and share-based compensation expenses, one-time non-recurring expenses, and acquisition-related expenses, which vary widely from company to company and impair comparability.
We use these non-GAAP financial measures:
•    
as a measure of operating performance to assist in comparing performance from period to period on a consistent basis;
•    
as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations;
•    
as a primary measure to review and assess the operating performance of our company and management team in connection with our executive compensation plan incentive payments; and
•    
in communications with our board of directors, stockholders, analysts and investors concerning our financial performance.
 

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Reconciliation to Adjusted EBITDA
The following is an unaudited reconciliation of adjusted EBITDA to net income (loss) before non-controlling interest, the most directly comparable GAAP measure, for the periods presented:
 
Three months ended
December 31,
 
Year Ended
December 31,
 
2010
 
2009
 
2010
 
2009
Net income (loss) before non-controlling interest
$
1,968
 
 
$
29,512
 
 
$
(15,750
)
 
$
6,264
 
Adjustments:
 
 
 
 
 
 
 
Foreign exchange (gains) losses
674
 
 
(447
)
 
1,726
 
 
(14
)
Non-cash share based compensation
945
 
 
(393
)
 
6,272
 
 
1,292
 
Non-recurring and acquisition-related expenses(1)
6,364
 
 
588
 
 
6,364
 
 
2,788
 
Loss from equity method investments(2)
2,776
 
 
 
 
2,776
 
 
 
Depreciation and amortization - acquisition related
784
 
 
278
 
 
1,635
 
 
723
 
Adjusted net income
$
13,511
 
 
$
29,538
 
 
$
3,023
 
 
$
11,053
 
Loss (gain) from equity method investments - other
(268
)
 
774
 
 
1,839
 
 
2,223
 
Depreciation and amortization - other
3,251
 
 
1,936
 
 
10,496
 
 
8,671
 
Income tax expense
3,101
 
 
1,463
 
 
3,771
 
 
410
 
Interest expense, net
2,876
 
 
1,051
 
 
8,069
 
 
2,370
 
Adjusted EBITDA
$
22,471
 
 
$
34,762
 
 
$
27,198
 
 
$
24,727
 
 
 
 
 
 
 
 
 
Adjusted net income per share - basic
$
0.35
 
 
$
0.79
 
 
$
0.08
 
 
$
0.31
 
 
 
 
 
 
 
 
 
Adjusted net income per share - diluted
$
0.34
 
 
$
0.73
 
 
$
0.07
 
 
$
0.29
 
 
 
 
 
 
 
 
 
Basic shares
38,297
 
 
37,530
 
 
37,918
 
 
35,367
 
 
 
 
 
 
 
 
 
Diluted shares
39,551
 
 
40,677
 
 
40,382
 
 
37,627
 
 
 
 
 
 
 
 
 
(1) Non-recurring and acquisition-related expenses in 2010 included primarily acquisition-related expenses incurred related to our previous acquisitions of Ad Infuse and Mobclix in the amount of $5.4 million and a one-time tax liability accrual related to pre-IPO performance share awards that were released to employees in 2010 in the amount of $1.0 million. Non-recurring expenses in 2009 included general and administrative expenses with respect to our redomiciliation exercise and professional fees associated with our consideration of corporate opportunities.
(2) Loss from equity method investments included a deferral of our equity investments' net profits related to a transaction with Velti.
Conference Call and Webcast Information
The Velti fourth quarter and fiscal year 2010 teleconference and webcast is scheduled to begin at 1:30 p.m., Pacific Time on Wednesday, March 16, 2011. To participate in the live call, analysts and investors should dial (877) 415-4117 or (708) 290-1138 (international), passcode 47248583 at least ten minutes prior to the call. The call will also be simulcast on the Internet at http://investors.velti.com. A replay of the call will be available on the Events section of the investor website at www.velti.com for three months, and for one week at (800) 642-1687 or (706) 645-9291 (international), passcode 47248583.
Note to Financial Statements
The financial information in this announcement does not constitute statutory financial statements as defined in Article 102 of the Companies (Jersey) Law 1991. We will provide a reconciliation of US GAAP to IFRS financial statements when we file our Form 20-F for fiscal 2010 with the U.S. Securities and Exchange Commission. Copies of our annual report and financial statements will be available at our registered office: First Floor, 28-32 Pembroke Street Upper, Dublin 2, Republic of Ireland or can be downloaded at the Company's website at www.velti.com.
 
 
 
 

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VELTI PLC
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
 
 
Three months ended December 31,
 
Year ended December 31,
 
2010
 
2009
 
2010
 
2009
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
Software as a service (SaaS) revenue
$
40,854
 
 
$
19,474
 
 
$
77,202
 
 
$
30,965
 
License and software revenue
12,282
 
 
39,384
 
 
26,586
 
 
45,811
 
Managed services revenue
4,351
 
 
6,941
 
 
12,481
 
 
13,189
 
Total revenue
57,487
 
 
65,799
 
 
116,269
 
 
89,965
 
Cost and expenses:
 
 
 
 
 
 
 
Third-party costs
18,578
 
 
16,640
 
 
36,658
 
 
27,620
 
Datacenter and direct project costs
1,942
 
 
1,791
 
 
6,312
 
 
4,908
 
General and administrative expenses
7,322
 
 
6,974
 
 
22,484
 
 
17,387
 
Sales and marketing expenses
5,918
 
 
4,928
 
 
23,049
 
 
15,919
 
Research and development expenses
3,201
 
 
899
 
 
7,840
 
 
3,484
 
Acquisition-related costs
5,364
 
 
 
 
5,364
 
 
 
Depreciation and amortization
4,035
 
 
2,214
 
 
12,131
 
 
9,394
 
   Total cost and expenses
46,360
 
 
33,446
 
 
113,838
 
 
78,712
 
Income from operations
11,127
 
 
32,353
 
 
2,431
 
 
11,253
 
Interest expense, net
(2,876
)
 
(1,051
)
 
(8,069
)
 
(2,370
)
Gain (loss) from foreign currency transactions
(674
)
 
447
 
 
(1,726
)
 
14
 
Income (loss) before income taxes, investment in associates and non-controlling interests
7,577
 
 
31,749
 
 
(7,364
)
 
8,897
 
Income tax expense
(3,101
)
 
(1,463
)
 
(3,771
)
 
(410
)
Loss from equity investments
(2,508
)
 
(774
)
 
(4,615
)
 
(2,223
)
Net income (loss) before non-controlling interest
1,968
 
 
29,512
 
 
(15,750
)
 
6,264
 
Net loss attributable to non-controlling interest
(21
)
 
(177
)
 
(81
)
 
(191
)
Net income (loss) attributable to Velti
$
1,989
 
 
$
29,689
 
 
$
(15,669
)
 
$
6,455
 
 
 
 
 
 
 
 
 
Net income (loss) per share attributable to Velti:
 
 
 
 
 
 
 
Basic
$
0.05
 
 
$
0.79
 
 
$
(0.41
)
 
$
0.18
 
Diluted
$
0.05
 
 
$
0.73
 
 
$
(0.41
)
 
$
0.17
 
 
 
 
 
 
 
 
 
Weighted average shares outstanding for use in computing per share amounts:
 
 
 
 
 
 
 
Basic
38,297
 
 
37,530
 
 
37,918
 
 
35,367
 
Diluted
39,551
 
 
40,677
 
 
37,918
 
 
37,627
 
 
 
 
 
 
 
 
 

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VELTI PLC
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
 
December 31, 2010
December 31, 2009
 
 
 
ASSETS
 
 
 
 
Current assets:
 
 
Cash and cash equivalents
$
17,354
 
$
19,655
 
Trade receivables, net of allowance for doubtful accounts
39,114
 
32,505
 
Accrued contract receivables
33,588
 
15,342
 
Prepayments
9,533
 
2,775
 
Other receivables and current assets
28,307
 
5,231
 
   Total current assets
127,896
 
75,508
 
Non-current assets:
 
 
 
 
Property and equipment, net
3,253
 
3,342
 
Intangible assets, net
45,650
 
34,412
 
Equity investments
2,328
 
3,254
 
Goodwill
18,451
 
3,874
 
Other assets
4,865
 
1,668
 
   Total non-current assets
74,547
 
46,550
 
Total assets
$
202,443
 
$
122,058
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
Current liabilities:
 
 
 
 
Accounts payable and other accrued liabilities
$
68,558
 
$
29,896
 
Deferred revenue and government grant - current
2,849
 
1,565
 
Current portion of long-term debt
50,430
 
21,200
 
Income tax liabilities
3,130
 
 
  Total current liabilities
124,967
 
52,661
 
Long term debt
19,685
 
17,661
 
Deferred government grant - non current
4,335
 
2,651
 
Retirement benefit obligations
447
 
346
 
Other non-current liabilities
16,740
 
1,803
 
Total liabilities
166,174
 
75,122
 
Commitments and contingencies
 
 
 
 
Shareholders' equity:
 
 
Share capital, nominal value £0.05; 100,000,000 ordinary shares authorized as of December 31, 2010 and 2009; 38,300,792 shares and 37,530,261 shares issued and outstanding as of December 31, 2010 and 2009, respectively
3,397
 
3,339
 
Additional paid-in capital
50,415
 
42,885
 
Accumulated deficit
(19,358
)
(3,689
)
Accumulated other comprehensive income
1,639
 
4,315
 
Total Velti shareholders' equity
36,093
 
46,850
 
Non-controlling interests
176
 
86
 
Total shareholders' equity
36,269
 
46,936
 
Total liabilities and shareholders' equity
$
202,443
 
$
122,058
 
 
 
 
 

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For further information, please contact:
 
Bankside Consultants
Simon Bloomfield simon.bloomfield@bankside.com 
+44 (0) 207 367 8861
 
The Blueshirt Group
Mike Bishop
mike@blueshirtgroup.com
+1 (415) 217 4968
 
RBC Capital Markets
(NOMAD and Broker)
Joshua Critchley
Matthew Coakes
Daniel Conti
+44 (0) 207 653 4000
 
Velti plc
Dakota Sullivan
VP Global Marketing
dsullivan@velti.com
+1 (415) 315 3436
 
About Velti
 
Velti is a leading global provider of mobile marketing and advertising technology and solutions that enable brands, advertising agencies, mobile operators and media to implement highly targeted, interactive and measurable campaigns by communicating with and engaging consumers via their mobile devices.  The Velti platform, called Velti mGage™, allows customers to use mobile and traditional media to reach targeted consumers, engage the consumer through the mobile Internet and applications, convert them into customers and continue to actively manage the relationship through the mobile channel.  Velti has the ability to conduct campaigns in over 30 countries and reach more than 2.5 billion global consumers. Velti is a publicly-held corporation based in Jersey, and trades on the NASDAQ Global Select Market under the symbol VELT and the London Stock Exchange's AIM under the symbol VEL. For more information, visit www.velti.com.
 
"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements including statements regarding financial expectations for the fourth quarter and fiscal year 2010, our outlook for 2011, expectations for the mGage Marketplace, and the adoption of our SaaS platform. The achievement or success of the matters covered by such forward-looking statements involve risks, uncertainties and assumptions, and if any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company's results could differ materially from the results expressed or implied by the forward-looking statements we make. These risks and uncertainties include - but are not limited to - risks associated with our ability to achieve the benefits expected of the mGage Marketplace to expand our customer base, achieve the benefits of our acquisitions, keep pace with technological and market developments and remain competitive against potential new entrants into our markets. Further information on these and other factors that could affect the Company's results is included in our registration statement on Form F-1 filed with the Securities and Exchange Commission and in other filings we may make with the Securities and Exchange Commission from time to time.
 
Velti assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
 

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