Propel Media Reports $6.1 Million Of Adjusted EBITDA For The 3rd Quarter Of 2016

  • Third quarter revenue of $13.7 million
  • Third quarter operating income of $5.2 million
  • Third quarter adjusted EBITDA of $6.1 million
  • Nine month revenue of $44.6 million
  • Nine month operating income of $10.4 million
  • Nine month adjusted EBITDA of $15.0 million

IRVINE, Calif., Nov. 14, 2016 (GLOBE NEWSWIRE) -- Propel Media, Inc. (OTCBB:PROM), an ad marketplace connecting digital marketers with unique audiences through real-time intent-based technology, today announced its 2016 third quarter results. The Company achieved revenue of $13.7 million, operating income of $5.2 million and adjusted EBITDA of $6.1 million in its 2016 third quarter, and revenue of $44.6 million, operating income of $10.4 million and adjusted EBITDA of $15.0 million in its first nine months of 2016.
Propel Media | Do Digital Differently
Propel Media | Do Digital Differently

A photo accompanying this announcement is available at http://www.globenewswire.com/NewsRoom/AttachmentNg/16e74ec7-13f0-4f80-95d9-c47eed6cfe2d

Third Quarter Business Highlights:
  • 7 th consecutive adjusted EBITDA positive quarter since becoming a publicly-traded company
  • Generated stable and strong financial performance in the 3 rd quarter
  • Achieved high levels of efficiency across all teams in the organization

"In the third quarter of 2016, the Company's stable financial performance exceeded the strong results we achieved in the second quarter of this year," said Marv Tseu, Chief Executive Officer of Propel Media. Tseu continued, "This performance was achieved as a result of excellent execution throughout the entire organization, including our sales, account management, technology development and media buying groups."

Further details concerning the results of operations for the third quarter ended September 30, 2016 are set forth in the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 14, 2016.

About Propel MediaPropel Media connects digital marketers with unique audiences through intent-based technology that delivers superior performance with measurable results. We 'Do Digital Differently' with a distinctive approach to digital powered by proprietary contextualization technology and a unique supply of ad inventory. Founded in 2006 and headquartered in Irvine, California, Propel Media is distinguished by its ability to deliver consistent results and its commitment to providing the highest level of client services to its partners.

For more information visit:  www.propelmedia.com

Forward-Looking Statements:This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those regarding Propel 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. Forward-looking statements are inherently uncertain and subject to a variety of events, factors and conditions, many of which are beyond the control of Propel Media and not all of which are known to Propel Media, including, without limitation those risk factors described from time to time in Propel Media's reports filed with the SEC. Among the factors that could cause actual results to differ materially are Propel Media's: loss of key advertising customers; inability to acquire new advertising customers; 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.  Further, investors should keep in mind that Propel Media's financial results in any particular period may not be indicative of future results.  Propel Media is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise, except as required by law.

Use of Non-GAAP Financial InformationIn addition to the results presented in accordance with generally accepted accounting principles, or GAAP, we present Adjusted EBITDA, which is a non-GAAP measure. Adjusted EBITDA, which is based upon the adjusted EBITDA which we report to our lenders, is a key measurement monitored by management, and is determined by taking net (loss) income and adding interest, taxes, depreciation, amortization, impairment charges, stock based compensation, bank fees, losses from extraordinary, unusual or nonrecurring items, noncash items, merger and other onetime expenses and severance. We believe that this non-GAAP measure, viewed in addition to and not in lieu of our reported GAAP results, provides useful information to investors by providing a more focused measure of 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 measure presented herein may not be comparable to similarly titled measures presented by other companies. Adjusted EBITDA has been reconciled to the nearest GAAP measure in the table following the financial statements attached to this press release.
         
Propel Media, Inc. and Subsidiaries  
Condensed Consolidated Balance Sheets  
    As of    
    September 30,       December 31,    
    2016       2015    
Assets   (unaudited)      
Current assets        
Cash $ 1,263,000     $ 1,629,000    
Accounts receivable, net   5,851,000       7,559,000    
Prepaid income taxes   493,000       385,000    
Prepaid expenses and other current assets   154,000       229,000    
Total current assets   7,761,000       9,802,000    
         
Property and equipment, net   1,711,000       2,525,000    
Restricted cash   1,000       94,000    
Intangible assets   20,000       188,000    
Goodwill   2,869,000       2,869,000    
Deferred tax assets, net   32,416,000       34,074,000    
Other assets   56,000       56,000    
Total assets $ 44,834,000     $ 49,608,000    
         
Liabilities and Stockholders' Deficit        
Current liabilities        
Accounts payable $ 2,915,000     $ 4,288,000    
Accrued expenses   2,614,000       2,485,000    
Advertiser deposits   1,549,000       2,146,000    
Current portion of long-term debt   6,066,000       5,997,000    
Revolving credit facility   -       1,762,000    
Total current liabilities   13,144,000       16,678,000    
         
Long-term debt, less current portion, net   66,732,000       68,858,000    
Obligations to transferors   14,416,000       13,923,000    
Note payable stockholder, non-current, net   -       106,000    
Other non-current liabilities   191,000       425,000    
Total liabilities   94,483,000       99,990,000    
         
Stockholders' Deficit        
Preferred Stock, $0.0001 par value, authorized 1,000,000 shares,   -       -    
no shares issued or outstanding        
Common Stock, $0.0001 par value, authorized 500,000,000 shares,        
issued and outstanding 250,010,162        
at September 30, 2016 and December 31, 2015   25,000       25,000    
Additional paid-in capital   2,529,000       1,117,000    
Accumulated deficit   (52,203,000 )     (51,524,000 )  
Total stockholders' deficit   (49,649,000 )     (50,382,000 )  
Total liabilities and stockholders' deficit $ 44,834,000     $ 49,608,000    
         

 
Propel Media, Inc. and Subsidiaries  
Condensed Consolidated Statements of Operations  
(unaudited)  
                 
  For the Three Months Ended September 30,   For the Nine Months Ended September 30,  
    2016       2015       2016       2015    
                 
Revenues $ 13,687,000     $ 19,106,000     $ 44,589,000     $ 60,052,000    
Cost of revenues   3,826,000       7,304,000       16,430,000       27,490,000    
Gross profit   9,861,000       11,802,000       28,159,000       32,562,000    
                 
Operating expenses:                
Salaries, commissions, benefits and related expenses   2,581,000       3,939,000       10,501,000       11,158,000    
Technology, development and maintenance   883,000       935,000       3,086,000       2,855,000    
Sales and marketing   20,000       23,000       69,000       55,000    
General and administrative   233,000       1,149,000       1,233,000       2,621,000    
Professional services   416,000       204,000       996,000       1,531,000    
Depreciation and amortization   525,000       498,000       1,723,000       1,321,000    
Impairment of software and video library   -       -       183,000       -    
                 
Operating expenses   4,658,000       6,748,000       17,791,000       19,541,000    
                 
Operating income   5,203,000       5,054,000       10,368,000       13,021,000    
                 
Other income (expense):                
Interest expense, net   (3,095,000 )     (3,645,000 )     (9,284,000 )     (9,989,000 )  
Gain from extinguishment of debt   -       -       106,000       -    
Other income   -       -       18,000       -    
Total other expense   (3,095,000 )     (3,645,000 )     (9,160,000 )     (9,989,000 )  
                 
Income before income tax (expense) benefit   2,108,000       1,409,000       1,208,000       3,032,000    
Income tax (expense) benefit   (2,250,000 )     (972,000 )     (1,887,000 )     31,053,000    
Net (loss) income $ (142,000 )   $ 437,000     $ (679,000 )   $ 34,085,000    
                 
Net (loss) income per common share $ (0.00 )   $ 0.00     $ (0.00 )   $ 0.14    
                 
Weighted average number of common shares outstanding   250,010,162       250,010,162       250,010,162       240,527,105    
                 
Pro-forma computation related to conversion to a C corporation upon                
completion of the reverse merger with Kitara Media Corp.:                
Historical pre-tax net income before income taxes $ -     $ 1,409,000     $ -     $ 3,032,000    
Pro-forma income tax expense   -       (562,000 )     -       (1,210,000 )  
Pro-forma net income $ -     $ 847,000     $ -     $ 1,822,000    
                 
Unaudited pro-forma net income per common share -                
basic and diluted $ -     $ 0.00     $ -     $ 0.01    
                 
Weighted average number of shares outstanding - basic and diluted   250,010,162       250,010,162       250,010,162       240,527,105    
                 

 
Propel Media, Inc. and Subsidiaries  
Reconciliation of Non-GAAP Information  
(Unaudited)  
                 
  For the Three Months Ended September 30,   For the Nine Months Ended September 30,  
    2016       2015       2016       2015    
                 
Net income (loss) $ (142,000 )   $ 437,000     $ (679,000 )   $ 34,085,000    
Depreciation and amortization   525,000       498,000       1,723,000       1,321,000    
Impairment charges   -       -       183,000       -    
Interest expense, net   3,095,000       3,645,000       9,284,000       9,989,000    
Stock-based compensation expense   240,000       408,000       1,412,000       952,000    
Taxes   2,206,000       972,000       1,897,000       (31,053,000 )  
Bank fees (credits)   26,000       45,000       (3,000 )     271,000    
Merger and other one-time expenses   172,000       10,000       225,000       1,099,000    
Severance   13,000       56,000       913,000       494,000    
Adjusted EBITDA (a non-GAAP measure) $     6,135,000     $     6,071,000     $     14,955,000     $     17,158,000    
                 
Press Contact: David ShapiroPropel Media press@propelmedia.com 

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