Propel Media Reports Increased Adjusted EBITDA for the 2nd Quarter of 2016

For the Three Months Ended June 31, 2016:

- Revenue of $15.6 million

- Operating income of $3 million

- Adjusted EBITDA of $5.6 million

For the Six Months Ended June 31, 2016:

- Revenue of $30.9 million

- Operating income of $5.2 million

- Adjusted EBITDA of $8.8 million

News provided by

Propel Media, Inc.

Aug 15, 2016, 08:00 ET

IRVINE, Calif., Aug. 15, 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 2016 second quarter results. The Company achieved revenue of $15.6 million and adjusted EBITDA of $5.6 million in its 2016 second quarter, and revenue of $30.9 million and adjusted EBITDA of $8.8 million in its first half year of 2016.

Second Quarter Business Highlights:

6^th consecutive adjusted EBITDA positive quarter since becoming a publicly-traded company.
Implementation of strategic long-term cost reduction and operational restructuring actions.
Continued progress in shifting our mix of revenues from third party application partners to our owned and operated network.

"In the second quarter of 2016, we continued our strategy to increase the percentage of our total revenues that come from our more profitable owned and operated user base." said Marv Tseu, Chief Executive Officer of Propel Media.

Further details concerning the results of operations for the second quarter ended June 30, 2016 is set forth in the Company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 12, 2016.

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. Headquartered in Irvine, California, our mission is to provide exceptional performance for our partners.

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
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 income (loss) 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
	June 30,	December 31,
	2016	2015
Assets	(unaudited)
Current assets
Cash	$ 607,000	$ 1,629,000
Accounts receivable, net	5,767,000	7,559,000
Prepaid income taxes	598,000	385,000
Prepaid expenses and other current assets	230,000	229,000
Total current assets	7,202,000	9,802,000

Property and equipment, net	1,923,000	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	34,495,000	34,074,000
Other assets	56,000	56,000
Total assets	$ 46,566,000	$ 49,608,000

Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable	$ 2,992,000	$ 4,288,000
Accrued expenses	2,870,000	2,485,000
Advertiser deposits	1,499,000	2,146,000
Current portion of long-term debt	6,043,000	5,997,000
Note payable stockholder	5,000	-
Revolving credit facility	956,000	1,762,000
Total current liabilities	14,365,000	16,678,000

Long-term debt, less current portion, net	67,449,000	68,858,000
Obligations to transferors	14,268,000	13,923,000
Note payable stockholder, non-current, net	-	106,000
Other non-current liabilities	232,000	425,000
Total liabilities	96,314,000	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 June 30, 2016 and December 31, 2015	25,000	25,000
Additional paid-in capital	2,288,000	1,117,000
Accumulated deficit	(52,061,000)	(51,524,000)
Total stockholders' deficit	(49,748,000)	(50,382,000)
Total liabilities and stockholders' deficit	$ 46,566,000	$ 49,608,000

Condensed Consolidated Statements of Operations
(unaudited)

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2016	2015	2016	2015

Revenues	$ 15,578,000	$ 19,455,000	$ 30,902,000	$ 40,946,000
Cost of revenues	5,812,000	10,014,000	12,604,000	20,186,000
Gross profit	9,766,000	9,441,000	18,298,000	20,760,000

Operating expenses:
Salaries, commissions, benefits and related expenses	4,183,000	3,550,000	7,921,000	7,219,000
Technology, development and maintenance	1,098,000	1,031,000	2,203,000	1,920,000
Sales and marketing	31,000	7,000	49,000	32,000
General and administrative	612,000	513,000	1,001,000	1,472,000
Professional services	255,000	590,000	579,000	1,327,000
Depreciation and amortization	577,000	438,000	1,198,000	823,000
Impairment of software and video library	-	-	183,000	-

Operating expenses	6,756,000	6,129,000	13,134,000	12,793,000

Operating income	3,010,000	3,312,000	5,164,000	7,967,000

Other income (expense):
Interest expense, net	(2,952,000)	(3,937,000)	(6,188,000)	(6,344,000)
Gain from extinguishment of debt	106,000	-	106,000	-
Other income	18,000	-	18,000	-
Total other income (expense)	(2,828,000)	(3,937,000)	(6,064,000)	(6,344,000)

Income (loss) before income tax (expense) benefit	182,000	(625,000)	(900,000)	1,623,000
Income tax (expense) benefit	(56,000)	701,000	363,000	32,025,000
Net income (loss)	$ 126,000	$ 76,000	$ (537,000)	$ 33,648,000

Net income (loss) 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	235,706,988

Pro-forma computation related to conversion to a C corporation upon
completion of the reverse merger with Kitara Media Corp.:
Historical pre-tax net (loss) income before income taxes	$ -	$ (625,000)	$ -	$ 1,623,000
Pro-forma income tax benefit (expense)	-	249,000	-	(648,000)
Pro-forma net (loss) income	$ -	$ (376,000)	$ -	$ 975,000

Unaudited pro-forma net (loss) income per common share -
basic and diluted	$ -	$ (0.00)	$ -	$ 0.00

Weighted average number of shares outstanding - basic and diluted	250,010,162	250,010,162	250,010,162	235,706,988

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

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2016	2015	2016	2015

Net income (loss)	$ 126,000	$ 76,000	$ (537,000)	$ 33,648,000
Depreciation and amortization	577,000	438,000	1,198,000	823,000
Impairment charges	-	-	183,000	-
Interest expense	2,952,000	3,937,000	6,188,000	6,344,000
Stock-based compensation expense	857,000	405,000	1,171,000	544,000
Taxes	80,000	(701,000)	(309,000)	(32,025,000)
Bank fees (credits)	28,000	(189,000)	(28,000)	220,000
Merger and other one-time expenses	42,000	241,000	55,000	1,044,000
Severance	900,000	-	900,000	454,000
Adjusted EBITDA (a non-GAAP measure)	$ 5,562,000	$ 4,207,000	$ 8,821,000	$ 11,052,000