Millennial Media Reports 2014 Second Quarter Financial Results

  Millennial Media Reports 2014 Second Quarter Financial Results

                     Second Quarter Revenue $67.3 million

Business Wire

BALTIMORE -- August 11, 2014

Millennial Media, Inc. (NYSE: MM), the leading independent mobile advertising
platform company, today reported financial results for the second quarter
ended June 30, 2014.

Financial Results and Business Highlights for the Second Quarterof 2014

Revenue: For the second quarter of 2014, revenue increased to $67.3 million
from $57.0 million on a GAAP basis, a year over year increase of 18.1%.
Revenue decreased from $81.3 million on a pro forma combined basis, a year
over year decrease of 17.2%. Pro forma combined revenue is calculated as the
sum of Millennial Media and Jumptap revenue for the entire second quarter of
last year.

Gross Margin: Gross margin was 40.2% for the second quarter of 2014 on a GAAP
basis and 40.6% for the second quarter of 2013 on a pro forma combined basis.
For the second quarter of 2013, gross margin was 42.4% on a GAAP basis.

Net Income (Loss):For the second quarter of 2014, net loss
was$(15.1)million, compared to net loss of$(3.1) millionfor the second
quarter of 2013.

Adjusted EBITDA:For the second quarter of 2014, Adjusted EBITDA, a non-GAAP
financial measure (see definition below), was$(6.1) million,compared to pro
forma combined Adjusted EBITDA of$(0.4)million for the second quarter of
2013.

Net Income (Loss) per Share: For the second quarter of 2014, basic and diluted
net loss per common share was$(0.14), compared to basic and diluted net loss
per common share of$(0.04)for the second quarter of 2013.

Non-GAAP Net Income (Loss) Per Common Share:For the second quarter of 2014,
non-GAAP net loss per common share was$(0.06), compared to non-GAAP net
income per common share of$0.02 for the second quarter of 2013.

Other Business Metrics:As ofJune 30, 2014,Millennial Mediareached over 650
million monthly unique users globally, including approximately 170 million
monthly unique users inthe United Statesalone. As ofJune 30, 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 third quarter of 2014 to be in the range of$65 million to $70
millionand Adjusted EBITDA to be a loss between $(7) millionand$(8)
million.

“As the mobile ad industry continues to shift and evolve, we too must grow and
expand our unique assets,” said Michael Barrett, President and CEO, Millennial
Media. “We will continue to strengthen our mobile network foundation, while
accelerating our programmatic exchange and open platform to further define our
place in the market and reinvigorate revenue growth.”

Second Quarter 2014 Financial Results Conference Call:Millennial Mediawill
host a conference call today at5:00 p.m. ETto discuss its second quarter
financial results, developments in its business, and the Company’s
expectations for the third 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
at866-825-3209(U.S.) or617-213-8061(international) using passcode
99207445. If you are unable to listen to the live conference call, a replay
will be available through August 18, 2014, and can be accessed by dialing
888-286-8010 (U.S.) or 617-801-6888 (international) using passcode 53176147.
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 third 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
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
Quarterly Report on Form 10-Q that will be filed for the quarter ended June
30, 2014 and other filings we make with the Securities and Exchange Commission
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)
                                                                  
                                                  June 30,        December 31,
                                                  2014            2013
Assets                                            (unaudited)
Current assets:
Cash and cash equivalents                         $ 92,359        $  99,237
Restricted cash                                     250              320
Accounts receivable, net of allowances of
$3,979 and $4,773 as of June 30, 2014 and           71,630           109,056
December 31, 2013, respectively
Prepaid expenses and other current assets          5,877          4,243   
Total current assets                                170,116          212,856
                                                                  
Long-term assets:
Property and equipment, net                         22,227           12,663
Restricted cash                                     350              515
Goodwill                                            135,522          135,489
Intangible assets, net                              53,172           57,706
Other assets                                       1,786          375     
Total long-term assets                             213,057        206,748 
Total assets                                      $ 383,173      $  419,604 
                                                                  
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses             $ 13,361        $  7,617
Accrued cost of revenue                             39,955           65,053
Accrued payroll and payroll related expenses        8,296            8,767
Deferred revenue                                   891            868     
Total current liabilities                           62,503           82,305
                                                                  
Other long-term liabilities                        4,618          1,829   
Total liabilities                                   67,121           84,134
                                                                  
                                                                  
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000
shares authorized, no shares issued and             -                -
outstanding as of June 30, 2014 and December
31, 2013
Common stock, $0.001 par value, 250,000,000
shares authorized, 107,444,145 and
106,314,909 shares issued and outstanding as        108              106
of June 30, 2014 and December 31, 2013,
respectively
Additional paid-in capital                          409,384          400,716
Accumulated other comprehensive loss                (247    )        (196    )
Accumulated deficit                                (93,193 )       (65,156 )
Total stockholders’ equity                         316,052        335,470 
Total liabilities and stockholders’ equity        $ 383,173      $  419,604 
                                                                  

                                                          
Millennial Media, Inc.
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)
                                                                   
                    Three Months Ended June        Six Months Ended June 30,
                    30,
                    2014            2013           2014            2013
                                                                   
Revenue             $ 67,308        $ 57,009       $ 139,928       $ 106,447
Cost of revenue      40,277        32,824       83,002        61,698  
Gross profit          27,031          24,185         56,926          44,749
Operating
expenses:
Sales and             13,433          8,351          26,970          16,493
marketing
Technology and        7,458           4,071          14,967          8,264
development
General and          21,184        14,785       42,936        26,742  
administrative
Total operating      42,075        27,207       84,873        51,499  
expenses
Loss from             (15,044 )       (3,022 )       (27,947 )       (6,750  )
operations
Other income
(expense)
Interest             (35     )      (10    )      (63     )      (21     )
expense, net
Total other
income               (35     )      (10    )      (63     )      (21     )
(expense)
Loss before           (15,079 )       (3,032 )       (28,010 )       (6,771  )
income taxes
Income tax           (11     )      (21    )      (27     )      (36     )
expense
Net loss            $ (15,090 )     $ (3,053 )     $ (28,037 )     $ (6,807  )
                                                                   
Net loss per
share:
Basic and           $ (0.14   )     $ (0.04  )     $ (0.26   )     $ (0.09   )
diluted
                                                                   
Weighted
average common
shares
outstanding:
Basic and             107,038         79,553         106,795         79,237
diluted
                                                                   
Stock-based
compensation
expense
included above:
Sales and           $ 176           $ 227          $ 637           $ 446
marketing
Technology and        168             472            338             1,327
development
General and           3,349           2,806          6,490           3,389
administrative
                                                                   

                                                                                                                         
Millennial Media, Inc.
Unaudited Pro Forma Combined Statement of Operations
(in thousands)
                                                                                                                                            
                   Three Months Ended March 31, 2013            Three Months Ended June 30, 2013             Six Months Ended June 30, 2013
                   Millennial                                   Millennial                                   Millennial
                   Media          Jumptap        Combined       Media          Jumptap        Combined       Media           Jumptap        Combined
                                                                                                                                            
Revenue            $ 49,438       $ 15,184       $ 64,622       $ 57,009       $ 24,309       $ 81,318       $ 106,447       $ 39,493       $ 145,940
Cost of             28,874       9,115        37,989       32,824       15,452       48,276       61,698        24,567       86,265  
revenue
Gross profit         20,564         6,069          26,633         24,185         8,857          33,042         44,749          14,926         59,675
Operating
expenses:
Sales and            8,141          4,842          12,983         8,351          5,631          13,982         16,492          10,473         26,965
marketing
Technology and       4,193          3,922          8,115          4,071          4,271          8,342          8,264           8,193          16,457
development
General and         11,956       1,764        13,720       14,785       1,776        16,561       26,741        3,541        30,281  
administrative
Total
operating           24,290       10,528       34,818       27,207       11,678       38,885       51,497        22,207       73,703  
expenses
Loss from            (3,726 )       (4,459 )       (8,185 )       (3,022 )       (2,821 )       (5,843 )       (6,748  )       (7,281 )       (14,028 )
operations
Other income
(expense)
Interest            (11    )      (61    )      (72    )      (10    )      (237   )      (247   )      (21     )      (298   )      (319    )
expense, net
Total other
income              (11    )      (61    )      (72    )      (10    )      (237   )      (247   )      (21     )      (298   )      (319    )
(expense)
Loss before          (3,737 )       (4,520 )       (8,257 )       (3,032 )       (3,058 )       (6,090 )       (6,769  )       (7,579 )       (14,347 )
income taxes
Income tax          (16    )      -            (16    )      (21    )      -            (21    )      (37     )      -            (37     )
expense
Net loss           $ (3,753 )     $ (4,520 )     $ (8,273 )     $ (3,053 )     $ (3,058 )     $ (6,111 )     $ (6,806  )     $ (7,579 )     $ (14,384 )
                                                                                                                                            

                                                                                        
Millennial Media, Inc.
Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA
and Non-GAAP Pro Forma Combined Net Loss to Non-GAAP Adjusted EBITDA
(in thousands, except per share data)
                                                                                                     
                                                                                      Pro Forma Combined
                                                                                      Three          Six Months
                                                                                      Months         Ended
                                                                                      Ended
                        Three Months Ended June        Six Months Ended June 30,      June 30,       June 30,
                        30,
                        2014            2013           2014            2013           2013           2013
Net loss                $ (15,090 )     $ (3,053 )     $ (28,037 )     $ (6,807 )     $ (6,111 )     $ (14,384 )
Adjustments:
Interest expense,         35              10             63              21             217            426
net
Income tax expense        11              21             27              36             21             36
Depreciation and
amortization              4,264           1,061          8,211           2,002          1,453          2,699
expense
Acquisition-related       976             120            1,251           481            120            481
costs
Deferred                  -               250            250             250            250            250
compensation
Stock-based
compensation              3,693           3,505          7,465           5,162          3,624          5,394
expense
Jumptap warrant and
derivative (income)      -             -            -             -            30           (108    )
loss
Total net                8,979         4,967        17,267        7,952        5,715        9,178   
adjustments
Adjusted EBITDA         $ (6,111  )     $ 1,914       $ (10,770 )     $ 1,145       $ (396   )     $ (5,206  )
                                                                                                     
                                                                                                     
Reconciliation of Net Loss per share to Non-GAAP Net Income (loss) per share
                                                                                                     
                                                                                                     
                        Three Months Ended June        Six Months Ended June 30,
                        30,
                        2014            2013           2014            2013
Net loss per share      $ (0.14   )     $ (0.04  )       (0.26   )       (0.09  )
Adjustments:
Interest expense,         -               -              -               -
net
Income tax expense        -               -              -               -
Depreciation and
amortization              0.04            0.01           0.08            0.02
expense
Acquisition-related       0.01            0.00           0.01            0.01
costs
Deferred                  -               -              -               -
compensation
Stock-based
compensation             0.03          0.05         0.07          0.07   
expense
Total net                0.08          0.06         0.16          0.10   
adjustments
Diluted non-GAAP
net income (loss)       $ (0.06   )     $ 0.02        $ (0.10   )     $ 0.01   
per share
Weighted average
common shares             107,038         83,192         106,795         83,247
outstanding -
dilutive
                                                                                                     

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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