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
JERSEY CITY, N.J., May 18, 2015 /PRNewswire/ -- Propel Media, Inc. (OTCBB: 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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SOURCE Propel Media, Inc.
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