JACKSONVILLE, Fla., May 4, 2009 (GLOBE NEWSWIRE) -- Web.com Group, Inc. (Nasdaq:WWWW), a leading provider of online marketing for small businesses, today announced results for the first quarter ended March 31, 2009.
"We were pleased with the company's execution in the first quarter, which was highlighted by revenue and profitability that were above the high-end of our guidance. In addition, our customer churn remained at a record low level and we exited the quarter with approximately 265,000 customers, which was consistent with the end of the previous quarter," said David Brown, Chairman and CEO of Web.com. "Our continued focus on optimizing the company's efficiency is reflected by our strong adjusted EBITDA and cash flow generation. We are optimistic about Web.com's long-term growth opportunity and our emerging leadership position in the online marketing sector, which we believe is increasingly making Web.com the partner of choice for other influential companies focused on the small and medium-sized business market."
Summary of First Quarter 2009 Results:
* Total revenue, calculated in accordance with U.S. generally
accepted accounting principles (GAAP), was $27.8 million for the
first quarter of 2009, above the high-end of the company's guidance
and compared to $30.9 million for the first quarter of 2008.
* For the first quarter, GAAP operating income was $877,000,
representing an operating margin of 3.2% and compared to $938,000
for the first quarter of 2008.
* GAAP net income was $0.9 million for the first quarter of 2009,
compared to $0.6 million in the first quarter of 2008. GAAP net
income per diluted share was $0.03 per share for the first quarter
of 2009, an increase from $0.02 per share for the first quarter of
2008.
* Non-GAAP operating income was $4.8 million for the first quarter of
2009, representing a non-GAAP operating margin of 17% and an
increase from $4.6 million for the first quarter of 2008.
* Non-GAAP net income was $4.8 million for the first quarter of 2009,
consistent with the first quarter of 2008. Non-GAAP net income per
diluted share was $0.18 for the first quarter of 2009, above the
high-end of the company's guidance and representing an increase
from $0.16 per diluted share for the first quarter of 2008.
* Adjusted EBITDA, which excludes the impact of stock-based
compensation, restructuring charges and goodwill and asset
impairment, was $5.6 million for the first quarter of 2009, an
increase compared to $5.2 million for the first quarter of 2008.
* Cash flows from operations were $5.7 million for the first quarter
of 2009. This represents an increase compared to ($1.0) million,
and $2.9 million excluding the pay down of accrued restructuring
expenses, for the first quarter of 2008.
Other Highlights:
* Web.com's total net subscribers were approximately 265,000 at the
end of the first quarter, consistent with the end of the prior
quarter.
* Customer churn remained at an all-time low of 3.9% in the first
quarter.
* The company repurchased 827,000 shares during the first quarter of
2009, bringing the total number of shares repurchased to
approximately 2,885,000 since the $20 million share repurchase
program was authorized in the third quarter of 2008. At the end of
the first quarter, the company had reduced its common shares
outstanding by 10% compared to the end of the third quarter 2008,
and it continued to have approximately $10.5 million of available
capacity in its share repurchase program.
Conference Call Information
Management will host a conference call to discuss Web.com's results and other matters related to the Company's business, including guidance related to future results, today May 4, 2009, at 5:00 p.m. (Eastern Time). To access this call, dial 888-686-9703 (domestic) or 913-312-6674 (international). A replay of this conference call will be available for a limited time at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 9077410. A webcast of this conference call will also be available for a limited time on the "Investor Relations" page of the Company's Web site, www.web.com.
All per share numbers for non-GAAP net income per share are expressed on a weighted-average diluted per share basis. Non-GAAP net income excludes stock-based compensation expense, amortization expense related to acquisitions, restructuring charges, the deferred revenue adjustment due to purchase accounting, income tax expense, and includes an estimated cash tax rate to be paid during 2009. Non-GAAP operating income excludes stock-based compensation expense, amortization expense related to acquisitions, restructuring charges, and the deferred revenue adjustment related to purchase accounting. A reconciliation of GAAP financial measures to non-GAAP financial measures results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."
About Web.com
Web.com Group, Inc. (Nasdaq:WWWW) is a leading provider of online marketing for small businesses. Web.com offers a full range of online services, including Internet marketing and advertising, local search, search engine marketing, search engine optimization, lead generation, home contractor specific leads, website design and publishing, logo and brand development and eCommerce solutions, meeting the needs of small businesses anywhere along their lifecycle. For more information on the company, please visit http://www.web.com or call 1-800-GETSITE.
Note to Editors: Web.com is a registered trademark of Web.com Group, Inc.
Use of Non-GAAP Financial Measures
Some of the measures in this press release are non-GAAP financial measures within the meaning of the SEC Regulation G. Web.com believes presenting non-GAAP net income attributable to common stockholders, non-GAAP net income per share attributable to common stockholders and non-GAAP operating income is useful to investors, because it describes the operating performance of the company and helps investors gauge the company's ability to generate cash flow, excluding some recurring charges that are included in the most directly comparable measures calculated and presented in accordance with GAAP. Company management uses these non-GAAP measures as important indicators of the company's past performance and in planning and forecasting performance in future periods. The non-GAAP financial information Web.com presents may not be comparable to similarly-titled financial measures used by other companies, and investors should not consider non-GAAP financial measures in isolation from, or in substitution for, financial information presented in compliance with GAAP. You are encouraged to review the reconciliation of non-GAAP financial measures to GAAP financial measures included elsewhere in this press release.
Relative to each of the non-GAAP measures the company presents above, management further sets forth its rationale as follows:
* Non-GAAP Operating Income. The Company excludes from non-GAAP
operating income amortization of intangibles, fair value adjustment
to deferred revenue, restructuring charges and stock-based
compensation charges. Management believes that excluding these
non-cash charges assists investors in evaluating period-over-period
changes in the Company's operating income without the impact of
items that are not a result of the Company's day-to-day business
and operations.
* Non-GAAP Net Income and Non-GAAP Net Income Per Share. The Company
excludes from non-GAAP net income and non-GAAP net income per share
amortization of intangibles, income tax expense, fair value
adjustment to deferred revenue, restructuring charges and
stock-based compensation, and includes cash income tax expense,
because management believes that excluding such measures helps
investors better understand the Company's operating activities.
* Adjusted EBITDA. The Company excludes from Adjusted EBITDA
depreciation expense, amortization of intangibles, income tax,
interest expense, interest income, and stock-based compensation,
because management believes that excluding such items helps
investors better understand the Company's operating activities.
In respect of the foregoing, Web.com provides the following supplemental information to provide additional context for the use and consideration of the non-GAAP financial measures used elsewhere in this press release:
* Stock-based compensation. These expenses consist of expenses for
employee stock options and employee stock purchases under SFAS
123(R). The Company excludes stock-based compensation expenses from
our non-GAAP measures primarily because they are non-cash expenses.
Prior to the adoption of SFAS 123(R) in fiscal 2006, the Company
did not include expenses related to employee stock options and
employee stock purchases directly in its financial statements, but
elected, as permitted by SFAS 123, to disclose such expenses in the
footnotes to its financial statements. As the Company applies SFAS
123(R), it believes that it is useful to its investors to
understand the impact of the application of SFAS 123(R) to its
operational performance, liquidity and its ability to invest in
research and development and fund acquisitions and capital
expenditures. While stock-based compensation expense calculated in
accordance with SFAS 123(R) constitutes an ongoing and recurring
expense, such expense is excluded from non-GAAP results because it
is not an expense that typically requires or will require cash
settlement by the Company and because such expense is not used by
management to assess the core profitability of the Company's
business operations. The Company further believes these measures
are useful to investors in that they allow for greater transparency
to certain line items in our financial statements. In addition,
excluding this item from various non-GAAP measures facilitates
comparisons to the Company's competitors' operating results.
* Amortization of intangibles. The Company incurs amortization of
acquired intangibles under SFAS 141. Acquired intangibles primarily
consist of customer relationships, non-compete agreements, trade
names, and developed technology.
