Propel Media Reports $34.5 Million of Adjusted EBITDA for 2017, up 57% over 2016

IRVINE, Calif., March 30, 2018 (GLOBE NEWSWIRE) -- Propel Media, Inc. (OTCPink:PROM), a performance focused digital media and advertising company, today announced its financial results for the fourth quarter and full year ended December 31, 2017. In 2017, the Company generated $88.7 million in revenue and $34.5 million of adjusted EBITDA.

Performance Highlights for the Year Ended December 31, 2017:

  • Revenue of $88.7 million, as compared to $61.2 million for 2016
  • Operating income of $29.9 million, as compared to $16.7 million for 2016
  • Adjusted EBITDA of $34.5 million, as compared to $21.9 million for 2016
  • Continued to invest in DeepIntent, an integrated data and programmatic buying platform acquired by the Company in 2017

Performance Highlights for the Fourth Quarter 2017:

  • 12th consecutive positive adjusted EBITDA quarter since becoming a publicly-traded company in January 2015
  • Revenue of $26.3 million, as compared to $16.6 million in the fourth quarter of 2016
  • Operating income of $6.6 million, as compared to $6.3 million in the fourth quarter of 2016
  • Adjusted EBITDA of $8.6 million, as compared to $7.0 million in the fourth quarter of 2016

“We set the bar high with aggressive goals for 2017 and I’m proud to report that the team exceeded expectations. It was terrific to see everyone work together in order to achieve such strong results,” said Marv Tseu, Chief Executive Officer of Propel Media.

“This year, we will continue to dedicate resources to grow our audience and invest in DeepIntent’s cutting edge software development and go-to-market strategy,” continued Tseu. “We believe that DeepIntent’s artificial intelligence-based platform will give it a meaningful competitive advantage by allowing it to deliver contextually relevant audiences in a brand safe environment to its advertisers.”

Further details concerning the results of operations for the year ended December 31, 2017 is set forth in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 29, 2018.

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. 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 statements regarding Propel Media’s capital structure, ability to execute its operating plan, anticipated financial flexibility and future financial performance and any other statements that are not statements of historical fact. 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 Propel Media’s actual results to differ materially are: loss of key advertising customers; inability to acquire new advertising customers; limitations on its ability to acquire new users profitably or at all; 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 (the nearest GAAP measure) and adding interest, taxes, depreciation, amortization, impairment charges, stock based compensation, bank fees, losses from extraordinary, unusual or nonrecurring items, including board of director fees paid during the year ended December 31, 2017, 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
Consolidated Balance Sheets
As of December 31,
Assets 2017 2016
Current assets
Cash$5,081,000 $2,823,000
Accounts receivable, net 9,502,000 6,595,000
Prepaid expenses and other current assets 1,157,000 564,000
Total current assets 15,740,000 9,982,000
Property and equipment, net 3,315,000 1,594,000
Intangible assets 1,201,000 20,000
Goodwill 6,028,000 2,869,000
Deferred tax assets, net 18,932,000 31,691,000
Other assets 137,000 89,000
Total assets$45,353,000 $46,245,000
Liabilities and Stockholders’ Deficit
Current liabilities
Accounts payable$4,419,000 $1,861,000
Accrued expenses 4,252,000 3,914,000
Advertiser deposits 2,137,000 1,832,000
Current portion of long-term debt 6,181,000 6,089,000
Total current liabilities 16,989,000 13,696,000
Long-term debt, less current portion, net 60,725,000 65,999,000
Obligations to transferors, net 15,203,000 14,569,000
Other non-current liabilities - 142,000
Total liabilities 92,917,000 94,406,000
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 December 31, 2017 and 2016 25,000 25,000
Additional paid-in capital 3,717,000 2,757,000
Accumulated deficit (51,306,000) (50,943,000)
Total stockholders’ deficit (47,564,000) (48,161,000)
Total liabilities and stockholders' deficit$45,353,000 $46,245,000

Propel Media, Inc. and Subsidiaries
Consolidated Statements of Income
For the Three Months Ended December 31, For the Years Ended December 31,
2017 2016 2017 2016
Revenues $26,313,000 $16,637,000 $88,667,000 $61,226,000
Cost of revenues 10,226,000 5,280,000 32,800,000 21,710,000
Gross profit 16,087,000 11,357,000 55,867,000 39,516,000
Operating expenses:
Salaries, commissions, benefits and related expenses 4,675,000 3,622,000 14,986,000 14,123,000
Technology, development and maintenance 1,366,000 402,000 4,021,000 3,488,000
Sales and marketing 82,000 49,000 143,000 118,000
General and administrative 2,716,000 408,000 4,103,000 1,641,000
Professional services 163,000 158,000 1,042,000 1,154,000
Depreciation and amortization 450,000 419,000 1,660,000 2,142,000
Impairment of software and intangible assets - - 20,000 183,000
Operating expenses 9,452,000 5,058,000 25,975,000 22,849,000
Operating income 6,635,000 6,299,000 29,892,000 16,667,000
Other income (expense):
Interest expense, net (2,881,000) (3,027,000) (12,216,000) (12,311,000)
Gain from extinguishment of debt - - - 106,000
Other income 106,000 (2,000) 106,000 16,000
Total other expense (2,775,000) (3,029,000) (12,110,000) (12,189,000)
Income before income tax expense 3,860,000 3,270,000 17,782,000 4,478,000
Income tax expense (12,984,000) (2,010,000) (18,145,000) (3,897,000)
Net (loss) income $(9,124,000) $1,260,000 $(363,000) $581,000
Net (loss) income per common share, basic and diluted $(0.04) $0.01 $(0.00) $0.00
Weighted average number of common shares outstanding, basic and diluted 250,010,162 250,010,162 250,010,162 250,010,162

Propel Media, Inc. and Subsidiaries
Reconciliation of Adjusted EBITDA
For the Three Months Ended December 31, For the Years Ended December 31,
2017 2016 2017 2016
Net Income (GAAP)$ (9,124,000) $ 1,260,000 $ (363,000) $ 581,000
Add (subtract) the following items:
Depreciation and amortization 450,000 419,000 1,660,000 2,142,000
Impairment charges - - 20,000 183,000
Interest expense 2,881,000 3,027,000 12,216,000 12,311,000
Stock-based compensation 243,000 229,000 960,000 1,640,000
Tax expense (benefit) 12,985,000 2,010,000 18,151,000 3,906,000
Bank fees 27,000 27,000 108,000 24,000
Amortization of DeepIntent deferred purchase price 287,000 - 551,000 -
Merger and other one-time expenses (54,000) (3,000) 267,000 224,000
Board of Directors fees 900,000 - 900,000 -
Severance 10,000 8,000 10,000 921,000
Adjusted EBITDA (a non-GAAP measure)$ 8,605,000 $ 6,977,000 $ 34,480,000 $ 21,932,000

Press Contact:

David Shapiro
Propel Media

Source:Propel Media