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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