Propel Media Reports $6.1 million of Adjusted EBITDA for the 3rd Quarter of 2016

Irvine, California, UNITED STATES

  • 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.

A photo accompanying this announcement is available at

Third Quarter Business Highlights:

  • 7th consecutive adjusted EBITDA positive quarter since becoming a publicly-traded company
  • Generated stable and strong financial performance in the 3rd 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 Media
Propel 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.

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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
In 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 
 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 
 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   

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