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Web.com Reports Record Fourth Quarter and Full Year 2012 Financial Results
|·||Fourth quarter revenue and profitability exceed high end of Web.com’s guidance|
|·||Successful integration of Network Solutions acquisition with accelerating revenue growth|
|·||Achieved three million subscriber milestone with low churn rates and increasing average revenue per user (ARPU)|
|·||Generated cash from operations of $26.6 million in the fourth quarter|
|·||Reduced debt balance by $9.6 million in the fourth quarter and $70.1 million since closing the Network Solutions acquisition|
JACKSONVILLE, FL – February 7, 2013 – Web.com Group, Inc. (NASDAQ: WWWW), a leading provider of internet services and online marketing solutions for small businesses, today announced results for the fourth quarter and full year ended December 31, 2012.
“2012 was a pivotal year for Web.com as our successful integration of Network Solutions has created a company with an annualized non-GAAP revenue run rate of more than $500 million, an accelerating revenue growth profile, and best-in-class profitability margins and strong cash flow from operations,” said David Brown, chairman and chief executive officer of Web.com.
The Company achieved a significant milestone by exceeding three million subscribers at year end. Web.com’s pro forma revenue growth rate accelerated from the low single digits in 2011 to 7.2% in 2012. Also during the fourth quarter, Web.com refinanced its debt to more attractive rates and further reduced its debt balance ahead of the prescribed schedule.
Mr. Brown added, “Our strategy of using our domain name business as a lead generation source and cross-sell opportunity for our broad suite of online marketing solutions is working. We believe we are well-positioned to continue delivering consistent net subscriber growth, improving ARPU gains with new products and services, and best in class churn rates to meet our longer-term target of low-teens revenue growth, consistently high profitability margins and even faster growth in earnings through continued deleveraging.”
Summary of Fourth Quarter 2012 Financial Results:
|·||Total revenue, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $111.4 million for the fourth quarter of 2012, compared to $73.6 million for the fourth quarter of 2011. Non-GAAP revenue, which adds back the impact of the fair value adjustment to acquired deferred revenue, was $126.2 million for the fourth quarter of 2012, above the company’s guidance range of $124.0 million to $125.5 million.|
|·||Operating loss, calculated in accordance with GAAP, was $605 thousand for the fourth quarter of 2012 and included a $15.2 million negative impact related to the fair value adjustment to acquired deferred revenue and deferred expenses. For the fourth quarter of 2011, the company reported a GAAP operating loss of $32.8 million which included a $23.4 million negative impact from the fair value adjustment to acquired deferred revenue and deferred expenses, and $17.0 million of restructuring charges and corporate development expenses.|
|·||GAAP net loss from continuing operations was $51.9 million, or $1.10 per diluted share, for the fourth quarter of 2012, and included the above-mentioned impact related to the fair value adjustment to acquired deferred revenue and deferred expenses, a $42.0 million charge related to the extinguishment of debt, and an income tax benefit of $4.7 million. GAAP net income from continuing operations was $669 thousand, or $0.02 per diluted share, in the fourth quarter of 2011, and included the above-mentioned impact related to acquired deferred revenue and deferred expenses, restructuring and corporate development expenses, as well as a $50.7 million tax benefit.|
The following information was filed by Web.Com Group, Inc. (WEB) on Thursday, February 7, 2013 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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