Frankly Inc. Reports 2016 First Quarter Results

-Company Achieves Positive Adjusted EBITDA-

SAN FRANCISCO, May 26, 2016 /CNW/ - Frankly Inc. (the "Company" or "Frankly") (TSX-V: TLK) a leading content, engagement and monetization platform for brands and media companies, today announced its financial results for the three months ended March 31, 2016. Financial references are in U.S. dollars unless otherwise indicated. Please refer to the financial statements, associated footnotes and MD&A for further details on our financial results.

First Quarter 2016 Financial Highlights

• Revenue of $5.2 million, up $467,000, or 10%, as compared to normalized Q4 2015 revenue of $4.8 million (excludes one-time, non-recurring revenue of $660,000 related primarily to contract termination fees). On a non-normalized sequential basis, Q1 2016 revenue of $5.2 million is down $193,000, or 4%, compared to Q4 2015 revenue of $5.4 million. Year-over-year revenue increased $5.2 million over Q1 2015 revenue of $59,000.
• Adjusted EBITDA of $9,000, an improvement of $1.1 million as compared to Q4 2015 Adjusted EBITDA loss of $1.0 million. Year-over-year improvement of $2.2 million compared to an Adjusted EBITDA loss of $2.2 million in Q1 2015.
• Net loss of $1.6 million, an improvement of $1.5 million as compared to Q4 2015 net loss of $3.1 million. Year-over-year improvement of $807,000 compared to a net loss of $2.4 million in Q1 2015.
• Cash of $6.3 million as at March 31, 2016.

First Quarter 2016 Operational Highlights

• Frankly completed the integration of Worldnow, aligning both companies under a unified organizational structure, integrated product lines and long-term mission
• Frankly joined other leading technology companies as part of PILOT, a NAB Initiative aimed at fostering broadcast technology innovation. Frankly is a charter member of PILOT
• Renewed contracts with several key broadcast groups, including the Lockwood Broadcast Group
• Strengthened senior leadership team with the addition of:
  • William Ammerman, Head of Advertising
  • Avi T. Aronovitz, Chief Financial Officer (appointed in Q2)

Management Commentary

"This marks the first time in our Company history that we have reported positive Adjusted EBITDA," said Steve Chung, Founder and Chief Executive Officer of Frankly. "Revenue for the quarter came in at the top-end of our guidance, and our Adjusted EBITDA was above breakeven, demonstrating our team's ability to drive sales while ensuring disciplined cost management across our business."

Mr. Chung continued: "As we look out to the remainder of the year, we will continue to work on developing new technology and innovative solutions that our clients can leverage to grow their business. With the addition of a senior executive to the advertising team, we are now well positioned to optimize and drive digital advertising revenues from our customer base. In addition, our sales teams continue to focus on contract renewals and new client wins. With the integration and the reorganization now complete, our focus shifts to top-line growth. Our executive team is committed to continue growing our business during this exciting time of growth in our industry."

First Quarter 2016 Conference Call Details

About Frankly: We build an integrated software platform for brands and media companies to create, distribute, analyze and monetize their content across all of their digital properties on web, mobile and TV. Our customers include NBC, ABC, CBS and FOX affiliates, as well as top fashion brands, professional sports franchises and global organizations. Collectively, we reach nearly 80 million monthly users in the United States. The Company is publicly traded on the TSX Venture Exchange and trading under ticker "TLK." Frankly is headquartered in San Francisco with major offices in New York. To learn more, please visit www.franklyinc.com or email [email protected].

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Non-IFRS Measures

The Company reports earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA, which are not financial measures calculated and presented in accordance with International Financial Reporting Standards ("IFRS") and therefore may not be comparable to similar measures presented by other issuers.  EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute to net income (loss) or any other financial measures of performance or liquidity calculated and presented in accordance with IFRS.  The Company defines Adjusted EBITDA as EDITDA, adjusted to exclude certain non-cash charges and other items that we do not believe are reflective of our ongoing operating results.  The Company utilizes Adjusted EBITDA internally for purposes of forecasting, determining compensation, and assessing the performance of our business, therefore, we believe this measure provides useful supplemental information that may assist investors in assessing an investment in the Company.

The following is a reconciliation of Adjusted EBITDA to net loss for the three month periods ended March 31, 2016 and 2015:

Notice regarding forward-looking statements:
This release includes forward-looking statements regarding Frankly and its business, including statements with respect to its ability to accelerate its technology and its projected user reach, the Company's growth prospects, expected growth and market position, the market size for its product offering, and expansion opportunities. Forward-looking events and circumstances discussed in this release are based on the Company's operations, estimates, forecasts and projections and resulting assumptions, and may not occur by certain specified dates or at all. Actual results and outcomes could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including, but not limited to, those risk factors listed in the Company's MD&A. The outcome of any forward-looking statement cannot be guaranteed. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable securities laws,  Frankly undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

SOURCE Frankly Inc.

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