Millennial Media Reports 2014 First Quarter Financial Results

  Millennial Media Reports 2014 First Quarter Financial Results

 First Quarter Revenue $72.6 million; EVP and CFO Michael Avon Stepping Down

Business Wire

BALTIMORE -- May 7, 2014

Millennial Media, Inc. (NYSE: MM), the leading independent mobile advertising
platform company, today reported financial results for the first quarter ended
March 31, 2014.

Financial Results and Business Highlights for theFirst Quarterof 2014

Revenue: For the first quarter of 2014, revenue increased to $72.6 million
from $49.4 million on a GAAP basis, a year over year increase of 46.9%.
Revenue increased from $64.6 million on a pro forma combined basis, a year
over year increase of 12.4%. Pro forma combined revenue is calculated as the
sum of Millennial Media and Jumptap revenue for the entire first quarter of
last year.

Gross Margin: Gross margin was 41.2% for the first quarter of 2014 on a GAAP
basis and 41.2% for the first quarter of 2013 on a pro forma combined basis.
For the first quarter of 2013, gross margin was 41.6% on a GAAP basis.

Net Income (Loss):For the first quarter of 2014, net loss
was$(12.9)million, compared to net loss of$(3.8) millionfor the first
quarter of 2013.

Adjusted EBITDA:For the first quarter of 2014, Adjusted EBITDA, a non-GAAP
financial measure (see definition below), was$(4.7) million,compared to pro
forma combined Adjusted EBITDA of$(4.8)million for the first quarter of
2013.

Net Income (Loss) per Share: For the first quarter of 2014, basic and diluted
net loss per common share was$(0.12), compared to basic and diluted net loss
per common share of$(0.05)for the first quarter of 2013.

Non-GAAP Net Income (Loss) Per Common Share:For the first quarter of 2014,
non-GAAP net loss per common share was$(0.04), compared to non-GAAP net loss
per common share of$(0.01) for the first quarter of 2013.

Other Business Metrics:As ofMarch 31, 2014,Millennial Mediareached over
650 million monthly unique users globally, including approximately 170 million
monthly unique users inthe United Statesalone. As ofMarch 31, 2014,
approximately 60,000 apps and mobile sites were enabled by mobile app
developers to operate on Millennial Media’s platform, and Millennial Media had
more than 650 million proprietary, anonymous active user profiles used for
delivering the most relevant ads to consumers.

Outlook

Based on information available as of today,Millennial Mediaexpects total
revenue for the second quarter of 2014 to be in the range of$70 million to
$75 millionand Adjusted EBITDA to be a loss between $(5) millionand$(6)
million.

“Now into my first full quarter, I am pleased with my decision to join
Millennial Media and drive this Company to the next level,” said Michael
Barrett, President and CEO, Millennial Media. “While I would have liked to
have seen stronger performance in the quarter, we have developed an aggressive
strategy and I have high confidence that we can execute and capitalize on the
growth and promise of mobile.”

EVP and CFO Michael Avon Steps Down

In addition, the Company today announced that Michael Avon, Executive Vice
President and Chief Financial Officer, will step down from his position at the
end of the second quarter of 2014 to pursue other career interests. Mr. Avon
began his relationship with Millennial Media as a venture investor at Columbia
Capital, where he led the Company’s first round of financing in 2006. As the
Company began to grow, he joined as EVP & CFO in the fall of 2009 and remained
in that role for the last four and a half years. He will continue to serve
Millennial Media in an advisory role for a transitional period after he steps
down as CFO.

The Company has begun a search for a permanent replacement to fill this role.

"I want to thank Michael for his many contributions to Millennial Media over
the nearly eight years he has been involved with the Company," said Barrett.
"Michael has been a key contributor to Millennial Media’s success. He was
instrumental in the Company's initial public offering in 2012, and led
numerous important strategic projects and acquisitions during his tenure. On
behalf of Millennial Media, I wish him all the best for the future."

"I’ve very much appreciated the opportunity to serve in my roles at Millennial
Media during such an exciting time in our Company’s history, in addition to
the mobile industry as a whole, and I am very proud of what we’ve
accomplished," said Mr. Avon. "After nearly eight successful years with the
Company, first as an investor, and then as CFO, I’ve decided now is the time
to move back to my entrepreneurial roots. I look forward to watching
Millennial Media continue to grow, and have confidence the Company will thrive
under the leadership of our new President & CEO and the strong and capable
management team in place."

First Quarter 2014 Financial Results Conference Call:Millennial Mediawill
host a conference call today at5:00 p.m. ETto discuss its first quarter
financial results, developments in its business, and the Company’s
expectations for the second quarter of 2014. A live webcast of the event will
be available on the Investor Relations page of theMillennial Mediawebsite at
http://investors.millennialmedia.com. A live domestic dial-in is available
at800-706-7745(U.S.) or617-614-3472(international) using passcode
57784757. If you are unable to listen to the live conference call, a replay
will be available throughMay 14, 2014, and can be accessed by dialing
888-286-8010 (U.S.) or 617-801-6888 (international) using passcode 96286770.
An archived version of the webcast will also be available
athttp://investors.millennialmedia.com.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and
presented in accordance with U.S. generally accepted accounting principles
(“GAAP”), Millennial Media reports Adjusted EBITDA, which is a non-GAAP
financial measure defined as net income or net loss before interest, taxes,
depreciation, amortization, non-cash stock-based compensation and expenses
related to acquisitions, such as costs for services of lawyers, investment
bankers, accountants and other third parties and acquisition related severance
costs, bonuses and retention bonuses and accrual of retention payments that
represent contingent compensation to be recognized over a requisite period. We
define non-GAAP net income (loss) per common share as Adjusted EBITDA divided
by diluted weighted average common shares outstanding. The Company uses these
non-GAAP financial measures for financial and operational decision making and
as a means to evaluate period-to-period comparisons. The Company believes that
these measures provide useful information about operating results, enhance the
overall understanding of past financial performance and future prospects, and
allow for greater transparency with respect to key metrics used by management
in its financial and operational decision making. Non-GAAP financial measures
should be considered in addition to results and guidance prepared in
accordance with GAAP, but should not be considered a substitute for, or
superior to, GAAP results.

The Company also presents Adjusted EBITDA on a pro forma combined basis. Pro
forma combined Adjusted EBITDA includes results of the Company’s Jumptap, Inc.
subsidiary for the entire period. A reconciliation of historical Adjusted
EBITDA to net loss, the most directly comparable GAAP financial measure, for
each of Millennial Media and Jumptap and on a pro forma combined basis, is set
forth in the tables following this release.

About Millennial Media

Millennial Media is the leading independent mobile advertising platform
company, supporting the world’s top brands and mobile content providers. The
Company's unique data and technology assets enable its clients to connect with
their target audiences as they move across screens, media, and moments.
Millennial Media drives meaningful results at scale through a diverse suite of
products fueled by innovation and the industry's smartest minds. For more
information, visit www.millennialmedia.com.

Forward-Looking Statements

The statements in this press release that are not historical facts constitute
“forward-looking statements” that involve risks and uncertainties and are made
pursuant to the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include expectations regarding financial results
for the second quarter of 2014. The achievement or success of the matters
covered by such forward-looking statements involve risks, uncertainties and
assumptions, and if any such risks or uncertainties materialize or if any of
the assumptions prove incorrect, our results could differ materially from the
results expressed or implied by the forward-looking statements we make. These
risks and uncertainties include, but are not limited to, risks associated with
our ability to continue to accelerate growth and provide enhanced gross margin
performance; our ability to expand our developer and advertiser base and
increase demand for our services; our ability to keep pace with technological
and market developments and remain competitive against larger companies in our
industry as well as potential new entrants into our markets; and our recent
acquisition of Jumptap, including our ability to integrate the two businesses
and realize the expected benefits from the acquisition. Further information on
these and other factors that could affect our results is included in our
Annual Report on Form 10-K for the year ended December 31, 2013, filed with
the Securities and Exchange Commission (the “SEC”) on March 3, 2014 and other
filings we make with the SEC from time to time. These documents are available
on the ‘SEC Filings’ section of the Investor Relations page of our website at
http://investors.millennialmedia.com.

The statements made in this release are based on information available to us
as of the date of this release, and we assume no obligation and do not intend
to update these forward-looking statements, except as required by law.

                                                               
Millennial Media, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
                                                                  
                                                    March 31,     December 31,
                                                    2014          2013
Assets                                              (unaudited)
Current assets:
Cash and cash equivalents                           $ 98,039      $  99,237
Restricted cash                                       464            320
Accounts receivable, net of allowances of $4,642
and $4,773 as of March 31, 2014
and December 31, 2013, respectively                   79,918         109,056
Prepaid expenses and other current assets            3,793        4,243   
Total current assets                                  182,214        212,856
                                                                  
Long-term assets:
Property and equipment, net                           15,032         12,663
Restricted cash                                       350            515
Goodwill                                              135,518        135,489
Intangible assets, net                                55,433         57,706
Other assets                                         233          375     
Total long-term assets                               206,566      206,748 
Total assets                                        $ 388,780    $  419,604 
                                                                  
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses               $ 10,272      $  7,617
Accrued cost of revenue                               42,189         65,053
Accrued payroll and payroll related expenses          6,673          8,767
Deferred revenue                                     890          868     
Total current liabilities                             60,024         82,305
                                                                  
Other long-term liabilities                          1,911        1,829   
Total liabilities                                     61,935         84,134
                                                                  
                                                                  
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, no shares issued and               –              –
outstanding as of March 31, 2014 and December 31,
2013
Common stock, $0.001 par value, 250,000,000
shares authorized, 106,837,523 and 106,314,909        107            106
shares issued and outstanding as of March 31,
2014 and December 31, 2013, respectively
Additional paid-in capital                            405,066        400,716
Accumulated other comprehensive loss                  (225    )      (196    )
Accumulated deficit                                  (78,103 )     (65,156 )
Total stockholders’ equity                           326,845      335,470 
Total liabilities and stockholders’ equity          $ 388,780    $  419,604 
                                                                  

                                                                
Millennial Media, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
                                                                    
                                                  Three Months Ended March 31,
                                                  2014              2013
                                                                    
Revenue                                           $  72,620         $ 49,438
Cost of revenue                                     42,725         28,874 
Gross profit                                         29,895           20,564
Operating expenses:
Sales and marketing                                  13,537           8,141
Technology and development                           7,509            4,193
General and administrative                          21,751         11,956 
Total operating expenses                            42,797         24,290 
Loss from operations                                 (12,902  )       (3,726 )
Other income (expense)
Interest expense, net                               (28      )      (11    )
Total other income (expense)                        (28      )      (11    )
Loss before income taxes                             (12,930  )       (3,737 )
Income tax expense                                  (17      )      (16    )
Net loss                                          $  (12,947  )     $ (3,753 )
                                                                    
Net loss per share:
Basic and diluted                                 $  (0.12    )     $ (0.05  )
                                                                    
Weighted average common shares outstanding:
Basic and diluted                                    106,543          78,917
                                                                    
Stock-based compensation expense included
above:
Sales and marketing                               $  461            $ 219
Technology and development                           170              855
General and administrative                           3,141            583
                                                                    

                                                           
Millennial Media, Inc.
Unaudited Pro Forma Combined Statement of Operations
(in thousands)
                                                               
                               Three Months Ended March 31, 2013
                               Millennial Media   Jumptap      Combined
                                                               
Revenue                        $   49,438         $ 15,184     $ 64,622
Cost of revenue                   28,874         9,115      37,989 
Gross profit                       20,564           6,069        26,633
Operating expenses:
Sales and marketing                8,141            4,842        12,983
Technology and development         4,193            3,922        8,115
General and administrative        11,956         1,764      13,720 
Total operating expenses          24,290         10,528     34,818 
Loss from operations               (3,726   )       (4,459 )     (8,185 )
Other income (expense)
Interest expense, net             (11      )      (61    )    (72    )
Total other income (expense)      (11      )      (61    )    (72    )
Loss before income taxes           (3,737   )       (4,520 )     (8,257 )
Income tax expense                (16      )      -          (16    )
Net loss                       $   (3,753   )     $ (4,520 )   $ (8,273 )
                                                                        


Millennial Media, Inc.
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA
(in thousands, except per share data)
                                                           
                                  GAAP                           Pro Forma
                                                                 Combined
                                                                 Three Months
                                  Three Months Ended March 31,   Ended March
                                                                 31,
                                  2014              2013         2013
Net loss                          $  (12,947  )     $ (3,753 )   $  (8,273  )
Adjustments:
     Interest expense, net           28               11            210
     Income tax expense              17               16            16
     Depreciation and                3,946            941           1,246
     amortization expense
     Acquisition-related             274              361           361
     costs
     Deferred compensation           250              -             -
     Stock-based compensation        3,772            1,657         1,770
     expense
     Jumptap warrant and            -              -           (138    )
     derivative income
             Total net              8,287          2,986       3,465   
             adjustments
Adjusted EBITDA                   $  (4,660   )     $ (767   )   $  (4,808  )
                                                                 
                                                                 
Reconciliation of GAAP Net Loss per share to Non-GAAP Net Loss per share
                                                                 
                                                                 
                                  Three Months Ended March 31,
                                  2014              2013
Net loss per share                $  (0.12    )     $ (0.05  )
Adjustments:
     Interest expense, net           -                -
     Income tax benefit              -                -
     Depreciation and                0.04             0.01
     amortization expense
     Acquisition-related             -                0.01
     costs
     Deferred compensation           -                -
     Stock-based compensation       0.04           0.02   
     expense
             Total net              0.08           0.04   
             adjustments
Non-GAAP net loss per share       $  (0.04    )     $ (0.01  )
Weighted average common shares       106,543          78,917
outstanding
                                                                 

Contact:

Millennial Media, Inc.
Investor Relations Contact
Joe Wilkinson, 443-681-6238
IR@millennialmedia.com
or
Press Contact
Todd Cadley, 917-521-6039
tcadley@millennialmedia.com
 
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