Matomy- Update on Discussion

November 23, 2018

Matomy Conducts Discussions with Bond Holders and Shareholders of Team Internet

Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) ("Matomy") today announced that it is conducting discussions with the shareholders of Team Internet, in which Matomy currently holds 90% of the share capital, regarding the terms of the purchase by Matomy of the remaining 10% stake in Team Internet. The terms of such purchase were previously concluded between the parties in an agreement and titled, Third Sale Exit. The purpose of such discussions is to align the terms of the purchase with the current and anticipated cash flow and results of Matomy and Team Internet and defer the payment or portions thereof due on November 30, 2018. As previously disclosed, failure by Matomy to pay the consideration for the Third Sale Exit, may trigger a right of Team Internet's shareholders, among other remedies, to repurchase some or all of Matomy's shares in Team Internet at a price of 60% of the original purchase price paid by Matomy on such shares. In connection with these discussions Matomy also approached the trustee of the outstanding bonds of Matomy (the "Trustee") in order to update on recent developments and assess the possibility of adopting agreed revisions to the terms of the bonds. Matomy believes that a prudent approach to its long term financial planning mandates a discussion with the bond holders with the aim of adjusting their terms so as to optimize the utilization of Matomy's resources and ensure that Matomy preserves the value of its assets and meets all its obligations. Matomy approached the Trustee regarding the convening of a meeting of the bond holders and it expects that a meeting of the bond holders in that respect will take place in the coming days and that ongoing discussions will be conducted with the elected representatives of the bond holders. It is important to note that Matomy is not in default under the bonds and there is no cause for immediate repayment of the bonds. Therefore, the foregoing discussions are a pre-emptive measure meant to ensure long term financial planning. Matomy is putting together a plan for a comprehensive agreement for the benefit of all stakeholders, which subject to the outcome of the proposed discussions, is expected to include a capital raising with the participation of key shareholders, in order to improve its equity positioning. There can be no assurance with respect to the outcome of the foregoing discussions or with respect to the capital raising.

A flash report of Matomy's selected reviewed accounts for the nine months period ending 30 September 2018 is attached hereto, to be followed by the publication of Matomy's full reviewed accounts for the said period after 30 November 2018.

The information contained within this announcement may be deemed by Matomy to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

About Matomy

Matomy Media Group Ltd. (LSE: MTMY, TASE: MTMY.TA) is a global media company. Founded in 2007 with headquarters in Tel-Aviv and seven offices around the world, Matomy is dual-listed on the London and Tel Aviv Stock Exchanges.

For more information:

Matomy Media GroupPamela Becker, VP Global Marketing[email protected]+972-74-7161971

Press Contact Information: 

Noam Yellin, [email protected], +972544246720

Website: http://investors.matomy.com LinkedIn: www.linkedin.com/Company/matomy-media-group 

Twitter: @MatomyGroup

Facebook: www.facebook.com/MatomyMediaGroup

Matomy Media Group Consolidated Results for the nine months period ending 30 September 2018 (non-GAAP) (Unaudited):

* Direct Media Costs

Direct Media Costs are the direct costs associated with the purchase of digital media. These costs include: payments for digital media based on the revenues Matomy generates from its customers on a revenue‑sharing basis; payments for digital media on a non‑revenue‑sharing basis (CPC or CPM); and serving fees for third-party platforms.

**Adjusted Gross Profit / Margin

Adjusted gross profit is a non-GAAP financial measure that Matomy defines as revenues less Direct Media Costs.

Matomy believes that adjusted gross profit is a meaningful measure of operating performance because it is frequently used for internal management purposes, indicates the performance of Matomy's solutions in balancing the goals of delivering results to its customers whilst meeting margin objectives, and facilitates a more complete understanding of factors and trends affecting Matomy's underlying revenues performance.

***Direct Adjusted EBIDTA

Direct Adjusted EBITDA is a non‑GAAP financial measure that Matomy defines as Adjusted EBITDA directly attributable to a specific business less the applicable Corporate Allocations assigned to such activity.

***\* Total Corporate Allocations

Total Corporate Allocations is a non‑GAAP financial measure that Matomy defines as indirect costs which are allocated across the various business units. They consist mainly of (i) cost of corporate headquarters, including labor costs and related overheads; and (ii) costs associated with being a publicly traded company, such as directors' compensation and expenses, costs relating to investor relations, shareholder meetings and reports to shareholders, directors' and officers' insurance and other executive costs, legal and other professional fees, and listing fees. 

*****Adjusted EBITDA

Adjusted EBITDA is a non‑GAAP financial measure that Matomy defines as net income before taxes on income, financial expenses (income), net, equity losses of affiliated companies, net, depreciation and amortisation, share‑based compensation expenses (cash and non-cash) and exceptional items (as described below). Adjusted EBITDA is a key measure Matomy uses to understand and evaluate its core operating performance and trends, to prepare and approve its annual budget, to develop short‑ and long-term operating plans and to determine bonus payments to management. In particular, Matomy believes that by excluding share-based compensation expenses, adjusted EBITDA provides a useful measure for period‑to‑period comparisons of Matomy's core business.

Team Internet (Domain Monetisation) (Unaudited)

Liquidity (Unaudited)

The following table sets out selected consolidated information in connection with Matomy's liquidity for the nine-month period ended 30 September 2018.

* Excluding lease guarantees, hedging securities and liability for the Third Sale Exit of the minority shareholder in Team Internet.

** Matomy elected to apply the fair value option in accordance with ASC 825, "Financial Instruments", to the convertible bond. As of 30 September 2018, the fair value of the convertible bond, based on its quoted price at the TASE was $24,951.