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First quarter revenue and profitability exceed high end of guidance
Added 21,000 net new subscribers, ending the quarter at 3.03 million subscribers
Average Revenue Per User of $13.89 grew $0.12 sequentially
Completed second debt re-financing increasing total annualized interest savings to $18 million
JACKSONVILLE, Fla., May 2, 2013 (GLOBE NEWSWIRE) -- Web.com Group, Inc. (Nasdaq:WWWW), a leading provider of internet services and online marketing solutions for small businesses, today announced results for the first quarter ended March 31, 2013.
"Web.com delivered a strong performance to start 2013, with first quarter revenue and profitability exceeding the high end of our guidance," said David Brown, Chairman and CEO of Web.com. "The successful expansion of our average revenue per user and 3 million plus subscriber base is improving the long-term growth profile of Web.com. We also remain focused on maintaining our strong margins and looking for opportunities to further enhance profitability, such as our recent debt re-financings that are expected to drive annualized interest savings of more than $18 million."
Brown added, "We continue to invest in initiatives that will expand adoption of our higher value-added products and services. During 2013, we have already added eight new geographic markets with our Feet on the Street program and kicked off our series of Small Business Forums in conjunction with our PGA sponsorship of the Web.com Tour. In addition, the roll out of new services such as FaceBook Boost and Full-Service Search Engine Optimization further enhances our broad suite of solutions."
Summary of First Quarter 2013 Financial Results:
Total revenue, calculated in accordance with U.S. generally accepted accounting principles (GAAP), was $115.5 million for the first quarter of 2013, compared to $91.5 million for the first quarter of 2012. Non-GAAP revenue was $128.1 million for the first quarter of 2013, up 7% on a year-over-year basis and above the high end of the company's guidance range of $126.5 million to $128.0 million.
GAAP operating loss was $2.5 million for the first quarter of 2013. For the first quarter of 2012, the company reported a GAAP operating loss of $18.5 million. Non-GAAP operating income was $34.2 million for the first quarter of 2013, an increase from $32.0 million for the first quarter of 2012, and representing a non-GAAP operating margin of 27%.
GAAP net loss from continuing operations was $46.5 million, or ($0.97) per diluted share, for the first quarter of 2013, including a $19.5 million charge for a loss related to debt extinguishment. GAAP net loss from continuing operations was $29.8 million, or ($0.65) per diluted share, in the first quarter of 2012. Non-GAAP net income from continuing operations was $24.5 million for the first quarter of 2013, or $0.48 per diluted share, up 37% on a year-over-year basis and above the company's guidance of $0.44 to $0.46 per diluted share. The Company had non-GAAP net income of $17.2 million, or $0.35 per diluted share, for the first quarter of 2012.
Adjusted EBITDA was $36.9 million for the first quarter of 2013, an increase from $34.0 million for the first quarter of 2012, and representing a 29% adjusted EBITDA margin.
The Company generated cash from operations of $11.0 million for the first quarter of 2013, or $18.2 million excluding a $7.2 million one-time prepayment penalty paid as part of its recent debt refinancing. This compared to $14.8 million of cash flow from operations for the first quarter of 2012.
First Quarter and Recent Business Highlights:
Web.com's total net subscribers were approximately 3,030,000, at the end of the first quarter of 2013, up more than 21,000 from the end of the fourth quarter.
Web.com's average revenue per user (ARPU) was $13.89 for the first quarter of 2013, representing a sequential increase of $0.12 from $13.77 for the fourth quarter of 2012.
Customer churn was approximately 1% for the first quarter of 2013, consistent with the previous record low levels of recent quarters.
Conference Call Information
Management will host a conference call today May 2, 2013, at 5:00 p.m. (Eastern Time), to discuss Web.com's first quarter financial results and other matters related to the Company's business and forward looking guidance on selected financial metrics. A live webcast of the call will be available at the "Investor Relations" page of Web.com's website,
http://ir.web.com. To access the call, dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of this conference call will be available for a limited time at 877-870-5176 (domestic) or 858-384-5517 (international). The replay conference ID is 411129. A replay of the webcast will also be available for a limited time at
Web.com Group, Inc. (Nasdaq:WWWW) is a leading provider of online marketing for small businesses. Web.com meets the needs of small businesses anywhere along their lifecycle by offering a full range of online services and support, including domain name registration services, website design, logo design, search engine optimization, search engine marketing and local sales leads, email marketing, general contractor leads, franchise and homeowner association websites, shopping cart software, eCommerce website design and call center services. For more information on the company, please visit
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 measures is useful to investors, because it describes the operating performance of the company, excluding some recurring charges that are included in the most directly comparable measures calculated and presented in accordance with GAAP. Web.com's 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.