Propel Media Reports Continued Profitability for Full Year 2015

- Revenues of $78.8 million and adjusted EBITDA of $24.0 million

- Accelerating gross margins of 57%

- Operating effectiveness improved as a result of successful merger integration

News provided by

Mar 31, 2016, 08:00 ET

IRVINE, Calif., March 31, 2016 /PRNewswire/ -- Propel Media, Inc. (OTCBB:PROM), a performance focused digital media company bringing together online video, display and mobile advertising technology and solutions to advertisers, app developers and publishers, today announced its financial results for the fourth quarter and full year ended December 31, 2015.

Fourth Quarter and Full Year 2015 Highlights:

Revenue of $18.7 million for the fourth quarter of 2015
$6.8 million in Adjusted EBITDA for the fourth quarter of 2015
Revenue of $78.8 million for the full year 2015
$24.0 million in Adjusted EBITDA for the full year 2015

"As one of the few profitable digital media companies, 2015 was a strong year for Propel Media," said Bob Regular, Chief Executive Officer of Propel Media. "As a result of our successful merger integration, we achieved several important milestones that increased our agility and strategic advantage in today's highly competitive advertising market. These milestones include a dedicated rebranding initiative under Propel Media, the expansion of our publisher development efforts, and effective consolidation across development teams and general and administrative functions. In addition, our investments in key video, native, and mobile advertising initiatives are gaining traction."

Further details concerning the results of operations for the fourth quarter and year ended December 31, 2015 are contained in the Annual Report on Form 10-K that Propel Media filed yesterday with the Securities and Exchange Commission.

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: 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 Information

To supplement its consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles ("GAAP"), Propel Media reports Adjusted EBITDA, which is a non-GAAP financial measure. Adjusted EBITDA is determined by taking net 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 one-time 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
Consolidated Balance Sheets
(Unaudited)

	As of December 31,
Assets	2015	2014

Current assets
Cash	$ 1,629,000	$ 3,675,000
Accounts receivable, net	7,559,000	8,054,000
Prepaid expenses	614,000	343,000
Total current assets	9,802,000	12,072,000

Property and equipment, net	2,525,000	2,034,000
Restricted cash	94,000	-
Intangible assets	188,000	-
Goodwill	2,869,000	-
Deferred tax assets, net	34,074,000	-
Other assets	56,000	56,000
Total assets	$ 49,608,000	$ 14,162,000

Liabilities and Stockholders' (Deficit) Equity
Current liabilities
Accounts payable	$ 4,288,000	$ 3,540,000
Accrued expenses	2,485,000	4,184,000
Advertiser deposits	2,146,000	2,610,000
Obligations to transferors, current portion	-	650,000
Current portion of long-term debt	5,997,000	-
Revolving credit facility	1,762,000	-
Total current liabilities	16,678,000	10,984,000

Long-term debt, net	68,858,000	-
Obligations to transferors, less current portion, net	13,923,000	-
Other non-current liabilities	425,000	464,000
Note payable stockholder, non-current, net	106,000	-
Total liabilities	99,990,000	11,448,000

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,
issued and outstanding 250,010,162 and 154,125,921,
at December 31, 2015 and December 31, 2014, respectively	25,000	15,000
Additional paid-in capital	1,117,000	-
Accumulated (deficit) earnings	(51,524,000)	2,699,000
Total stockholders' (deficit) equity	(50,382,000)	2,714,000
Total liabilities and stockholders' (deficit) equity	$ 49,608,000	$ 14,162,000

Propel Media, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)

	For the Three Months Ended December 31,		For the Years Ended December 31,
	2015	2014	2015	2014

Revenues	$ 18,728,000	$ 23,224,000	$ 78,780,000	$ 89,461,000
Cost of revenues	6,633,000	12,475,000	34,123,000	41,865,000
Gross profit	12,095,000	10,749,000	44,657,000	47,596,000

Operating expenses:
Salaries, commissions, benefits and related expenses	3,725,000	1,711,000	14,883,000	10,867,000
Technology, development and maintenance	1,137,000	480,000	3,992,000	2,198,000
Marketing and promotional	47,000	126,000	102,000	366,000
General and administrative	449,000	1,244,000	3,070,000	2,407,000
Professional services	229,000	591,000	1,760,000	1,538,000
Depreciation and amortization	616,000	338,000	1,937,000	1,314,000
Impairment of trade name	301,000	-	301,000	-

Operating expenses	6,504,000	4,490,000	26,045,000	18,690,000

Operating income	5,591,000	6,259,000	18,612,000	28,906,000

Interest expense	(3,502,000)	-	(13,491,000)	(1,000)

Income before income tax benefit	2,089,000	6,259,000	5,121,000	28,905,000
Income tax benefit (expense)	(463,000)	-	30,590,000	-
Net income	$ 1,626,000	$ 6,259,000	$ 35,711,000	$ 28,905,000

Net income per common share, basic and diluted	$ 0.01	$ 0.04	$ 0.15	$ 0.19

Weighted average number of common shares outstanding, basic and diluted	242,917,355	154,125,921	242,917,355	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	$ 2,089,000	$ 6,259,000	$ 5,121,000	$ 28,905,000
Pro-forma income tax expense	783,000	2,497,000	1,993,000	11,533,000
Pro-forma net income	$ 1,306,000	$ 3,762,000	$ 3,128,000	$ 17,372,000

Unaudited pro-forma net income per common share - basic and diluted	$ 0.01	$ 0.02	$ 0.01	$ 0.11

Weighted average number of shares outstanding - basic and diluted	242,917,355	154,125,921	242,917,355	154,125,921

Propel Media, Inc. and Subsidiaries
Reconciliation of Non-GAAP Information
(Unaudited)

	For the Three Months Ended December 31,		For the Years Ended December 31,
	2015	2014	2015	2014
Net Income (GAAP)	$ 1,626,000	$ 6,259,000	$ 35,711,000	$ 28,905,000
Add (subtract) the following items:
Depreciation and amortization	616,000	338,000	1,937,000	1,314,000
Impairment charges	301,000	-	301,000	-
Interest expense	3,502,000	-	13,491,000	1,000
Stock-based compensation	165,000	-	1,117,000	-
Income tax expense (benefit)	463,000	-	(30,590,000)	-
Bank fees	37,000	-	310,000	-
Merger and other one-time expenses	45,000	458,000	1,114,000	938,000
Severance	48,000	-	559,000	-
Adjusted EBITDA (a non-GAAP measure)	$ 6,803,000	$ 7,055,000	$ 23,950,000	$ 31,158,000