Propel Media Inc (PROM)

[db7]

Propel Media Launches with Profitable First Quarter Earnings

-- Revenues of $21.5 million and Adjusted EBITDA of $5.2 million
-- Net Income of $33.6 million, reflecting one-time tax benefit
-- Merger integration savings achieved ahead of schedule

PR Newswire
Propel Media, Inc.
17 minutes ago

JERSEY CITY, N.J., May 18, 2015 /PRNewswire/ -- Propel Media, Inc. (PROM), formed by the January merger of Kitara Media Corp. and Future Ads LLC, announced that it achieved revenue of $21.5 million and adjusted EBITDA of $5.2 million in its first quarter as a combined public company bringing together online video, display and mobile advertising technology solutions for advertisers, app developers and publishers.

"We are pleased that the merger of these leading ad tech companies has gone smoothly and that we were able to initiate cost savings initiatives and new business development strategies that we believe will provide operating benefits later this year," said Bob Regular, CEO of Propel Media. "We are excited that our proprietary Trafficvance and PROPEL+ technology platforms are launching dynamic video ad and content optimization capabilities to position Propel Media to take advantage of growth opportunities in an ever changing market environment," said Mr. Regular.

Our merger was accounted for as a reverse merger, with Future Ads as the accounting acquirer. The historical financial statements are those of Future Ads and Future Ads was deemed to have acquired Kitara on the date of the reverse merger. Upon the closing of the merger, Future Ads became subject to income taxes, and as such, we recorded a deferred income tax benefit of approximately $31 million.

Complete information on the Company's financial performance for the first quarter ended March 31, 2015 is set forth in the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 15, 2015.

About Propel Media

Propel Media is a performance focused digital media company bringing together online video, display and mobile advertising technology and solutions to advertisers, app developers and publishers. Our mission is to provide exceptional performance for our partners.

The Company has offices in Irvine, CA and Jersey City, NJ. For more information visit: http://www.propelmedia.com

Forward-Looking Statements:

Certain information and statements contained in this press release, 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 and we undertake no obligation to update any such statements to reflect subsequent changes in events or circumstances. 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 expand its video content library; 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.

Use of Non-GAAP Financial Information
In addition to the unaudited results presented in accordance with generally accepted accounting principles, or GAAP, in this press release, the Company presents adjusted EBITDA which is a non-GAAP measure. The adjusted EBITDA is determined by taking net income and adding back depreciation and amortization, income tax benefit, interest expense and stock-based compensation. The Company believes that this non-GAAP measure, viewed in addition to and not in lieu of the Company's reported GAAP results, provides useful information to investors by providing a more focused measure of operating results. This metric is an integral part of the Company's internal reporting to evaluate its operations and the performance of senior management. A reconciliation table to the comparable GAAP measure is available in the accompanying financial tables below. The non-GAAP measure presented herein may not be comparable to similarly titled measures presented by other companies.









Propel Media, Inc. and Subsidiaries


Condensed Consolidated Balance Sheets



As of


Assets

March 31, 2015


December 31, 2014



(unaudited)




Current assets





Cash

$ 6,346,000


$ 3,675,000


Accounts receivable, net

11,242,000


8,054,000


Prepaid expenses

602,000


343,000


Deferred tax assets, current

12,000


-


Other current assets

232,000


-


Total current assets

18,434,000


12,072,000







Property and equipment, net

3,050,000


2,034,000


Restricted cash

513,000


-


Intangible assets

586,000


-


Goodwill

2,467,000


-


Deferred tax assets, non-current

34,610,000


-


Other assets

698,000


56,000


Total assets

$ 60,358,000


$ 14,162,000







Liabilities and Stockholders' (Deficit) Equity





Current liabilities





Accounts payable

$ 7,622,000


$ 3,540,000


Accrued expenses

3,311,000


4,184,000


Advertiser deposits

2,627,000


2,610,000


Obligations to transferors

-


650,000


Short-term portion of long-term debt

6,189,000


-


Revolving credit facility

5,751,000


-


Total current liabilities

25,500,000


10,984,000







Long-term debt

71,442,000


-


Obligations to transferors

16,387,000


-


Other non-current liabilities

428,000


464,000


Note payable stockholder, non-current, net

100,000


-


Total liabilities

113,857,000


11,448,000







Commitments and contingencies










Stockholders' (Deficit) Equity





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,

25,000


15,000


issued and outstanding 250,010,162 and 154,125,921,





at March 31, 2015 and December 31, 2014, respectively





Additional paid-in capital

139,000


-


Accumulated (deficit) earnings

(53,663,000)


2,699,000


Total stockholders' (deficit) equity

(53,499,000)


2,714,000


Total liabilities and stockholders' (deficit) equity

$ 60,358,000


$ 14,162,000






Propel Media, Inc. and Subsidiaries


Condensed Consolidated Statements of Income


(unaudited)








For the Three Months Ended March 31,



2015


2014







Revenues

$ 21,491,000


$ 24,669,000


Cost of revenues

10,172,000


11,295,000


Gross profit

11,319,000


13,374,000







Operating expenses:





Salaries, commissions, benefits and related expenses

3,669,000


3,541,000


Technology development and maintenance

889,000


618,000


Marketing and promotional

25,000


102,000


General and administrative

959,000


319,000


Professional services

737,000


173,000


Depreciation and amortization

385,000


320,000







Operating expenses

6,664,000


5,073,000







Operating income

4,655,000


8,301,000







Interest expense

(2,407,000)


-







Income before income tax benefit

2,248,000


8,301,000


Income tax benefit

31,324,000


-


Net income

$ 33,572,000


$ 8,301,000












Net income per common share, basic and diluted

$ 0.15


$ 0.05







Weighted average number of common shares outstanding - basic and diluted

221,244,890


154,125,921







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

$ 2,248,000


8,301,000


Pro-forma income tax expense

897,000


3,312,000


Pro-forma net income

$ 1,351,000


$ 4,989,000







Unaudited pro-forma net income per common share, basic and diluted

$ 0.01


$ 0.03







Weighted average number of shares outstanding - basic and diluted

221,244,890


154,125,921











Propel Media, Inc. and Subsidiaries






Reconciliation of Non-GAAP Information



(Unaudited)












For the Three Months Ended March 31,





2015


2014

















Net loss (GAAP)

$ 33,572,000


$ 8,301,000



Add (subtract) the following items:






Depreciation and amortization

385,000


320,000



Income tax benefit

(31,324,000)


-



Interest expense

2,407,000


-



Stock-based compensation

139,000


-



Adjusted EBITDA (non-GAAP)

$ 5,179,000


$ 8,621,000











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