Velti plc (Nasdaq: VELT), the leading global provider of mobile marketing and advertising technology and solutions, today announced financial results for the second quarter ended June 30, 2013.
“While we understood there would be challenges to improving Velti's financial position and driving long-term growth, the second quarter proved to be more difficult than expected,” said Alex Moukas, chief executive officer. “We continued however to take significant steps to focus the company on predictable business, customers and geographies. We also began a major restructuring effort to align our organization to our business strategy and current revenue level, removing approximately $40 million in annualized costs, in addition to our previously announced $40 million reduction of capital expenditures.
“Over the past few months we have made significant progress extricating ourselves from businesses at the root of many of our difficulties, focusing instead on core opportunities for growth in mobile marketing in key geographies like Western Europe, North America, India and China. For example, in the fourth quarter of 2012 we began to reduce our commercial activities in Greece and Cyprus, and as of the end of Q2 2013 we are generating no meaningful revenue from customers in this region. Notwithstanding this reduction of business, customers with business activities in Greece and Cyprus continued to account for a significant portion of the Company's outstanding receivables. Due to a deterioration in collections from these customers, and indications that future payments were also at risk, we made the decision to write-down more than $100 million in outstanding receivables.
“We remain focused on creating and executing highly effective campaigns for our customers. Our mobile marketing customers have responded with a retention rate of more than 95% and we continue to sign substantial contracts with new customers.“We move into the second half of the year as a more disciplined, focused organization that remains a leader in mobile marketing. We are committed to doing all we can to deliver value to customers and shareholders and our actions position Velti to become profitable and cash flow positive in 2014.”