4.5 Times Increase in Annual Revenues to NIS 57.2 Million

WhiteSmoke publishes its financial results for 2016 and Q4/16 and reports rapid growth, improved profitability and a return to profitability in Q4/16:

times increase in annual revenues to NIS 57.2 million 4.5 

times increase in quarterly revenues to NIS 20.1 million 12 

times increase in annual EBITDA to NIS 8.0 million 11 

Quarterly EBITDA of NIS 2.3 million vs. loss in Q4/15 

Tel Aviv, March 28, 2017 - WhiteSmoke (TLV: WSMK), a global Israeli Corporation engaged in video advertising and marketing and distribution using search engines (online and mobile), reports its financial results for the fourth quarter and 2016. During the year, the Company began to implement its business strategy for diversifying income sources and focusing on the video segment. As part of this strategy, WhiteSmoke's internal video division, Omnivid (acquired from GMS Digital in July 2016) led to the Company's entry into the segment of video advertising (which will become a major growth engine in the coming years) and a significant increase in the Corporation’s consolidated revenues. The rapid growth in annual revenues led to a significant improvement in profitability while reducing losses, caused this year mainly due to the amortization of the entire investment (and the Company's share in losses) of NIS 8 million in Kibo and return to net profit in the fourth quarter of 2016. The Company ended up with an annual EBITDA of NIS 8.0 million and EBITDA in the fourth quarter of 2016 of NIS 2.3 million.

WhiteSmoke CEO, Itay Meroz said: “The fourth quarter of 2016 was also the fourth consecutive quarter in which the Company reported growth in revenue and adjusted EBITDA, and the entire year was characterized by strong growth trend compared to 2015". The financial results reflect the realization of our business strategy for diversifying sources of income, and focusing on video advertising as a significant growth engine for the coming years - an activity that we back up with strategic acquisitions and synergistic for our activity. Omnivid revenues, the company's internal video advertising division, led to significant revenue growth, particularly in the fourth quarter of 2016, in which these accounted for approximately 70% of the company's total revenues. In parallel with the increase in video advertising activity, we have amortized the entire amount of our investment in Kibo and in 2017 we do not expect any expenses for this activity.

In addition, in February 2017, after the reporting period, we acquired the video advertising activity of Wise Data Media. We believe that Wise Data Media is expected to make an increasing contribution in the coming quarters.

We intend to continue focusing on our growth areas, including advertising on video and the web, which we believe will help us in maintaining a high pace of revenues as well as improving profitability. We believe that in 2017 we will continue to show significant improvement in the activity while increasing shareholders value.”

Financial Highlights for the Fourth Quarter and 2016:

In the fourth quarter the revenues totaled NIS 20.1 million, an increase of 1,087% compared  to NIS 1.7 million in the same quarter in 2015. The revenues in 2016 totaled approximately .NIS 57.2 million, an increase of 344% compared to NIS 12.9 million in 2015

Net profit in the fourth quarter was NIS 750 thousand, compared to a net loss of NIS 3.4  million in the same quarter of 2015. Net loss for the year 2016 totaled NIS 1.5 million, a significant reduction compared to a loss of NIS 10.9 million in 2015. Net profit in 2016 was adversely affected by a loss of NIS 8.2 million due to the amortization of the entire .investment in Kibo and the Company's share in its losses Adjusted EBITDA in the fourth quarter was NIS 2.3 million, compared to a loss in the same  quarter of 2015. Adjusted EBITDA for the year 2016 was NIS 8.0 million, a 12 times increase .compared to NIS 709 thousand in 2015

The Company's operating cash flow for the year 2016 totaled NIS 1.06 million, compared to a  .negative cash flow last year. The cash reserves of the Corporation are NIS 6.4 million

About WhiteSmoke

WhiteSmoke (WhiteSmoke. TLV: WSMK) is a global Israeli Corporation which provides marketing and advertising services on web and mobile. The company offers digital advertising services using video on digital media channels, which include mobile applications and websites. Operations include acquiring advertising spaces using various digital media methods, while optimizing them to maximize the effectiveness and focus of the advertising. WhitSmoke's marketing and distribution activity using search engines involves directing users to the search results of the world's leading search engines, through strategic agreements with leading partners in this domain. WhiteSmoke also develops, markets and distributes software and applications for correcting and upgrading writing in English, under the WhiteSmoke brand. The company was founded in 2002 and is currently managed by Itay Meroz. WhiteSmoke offices are located in Ramat Ha’Hayal, Tel Aviv.