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2006-08-18
Web.com Releases Second Quarter Financials
Atlanta, Georgia - August 18, 2006 - Website and Internet services company, Web.com, Inc., has reported its results for the second quarter ending June 30, 2006. Total revenues for the quarter were $12.1 million, down from $12.3 million in the first quarter of 2006. The second quarter marked the last quarter of recognizing Verizon revenues (a deal that was initially cancelled in December 2004 and terminated in the second quarter of 2006).
Highlights of the Second Quarter 2006 Results include:
-- Net income for the quarter was negative $5.7 million, or $(0.35) per share, including a $3.5 million charge from the WebSource Media acquisition and $0.2 million in legal costs associated with the acquisition, versus a negative $5.5 million, or $(0.34) per share, in the quarter ended March 2006.
-- Adjusted net income from continuing operations(1) was negative $3.6 million, including an impairment of $3.5 million from WebSource Media and $0.2 million in legal costs associated with the acquisition.
-- Net subscribers totaled approximately 148,000 for the quarter, down from approximately 149,000 in the first quarter of 2006. The reduction in the second quarter as compared to the first quarter includes the loss of approximately 3,200 Verizon subscribers. Excluding the loss of Verizon subscribers, the Company added approximately 1,600 subscribers in the quarter.
Jeff Stibel, President and CEO of Web.com explained, ''Web.com continued to drive subscriber growth across its core website and web services plans by refining our sales and marketing efforts and working closely with strategic distribution partners. While we had unfortunate news about an acquisition we made during the quarter, the company has moved on and is working on further solidifying its position as a leader in the industry.''
Gonzalo Troncoso, Executive Vice President and Chief Financial Officer added, ''The second quarter presented some challenges for Web.com, however if you exclude these events and look at the core business, the company was able to add subscribers within attractive subscriber acquisition rates. The company has stated in the past that it intends to create a model that brings in new subscribers and up-sells them to new web services over time. This model is taking shape and we feel confident that over the long term it will be a cost-effective means to grow revenues and create long-standing relationships with our customer base.''
This earnings release contains non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Web.com, Inc. has provided reconciliations below release of the non-GAAP financial measures to the most directly comparable GAAP financial measures
Adjusted net income (loss) from continuing operations is presented in this earnings release because management believes that this non-GAAP measure of financial performance provides investors with valuable insight into the Company's ongoing business and operating results from period-to-period. We define adjusted net income (loss) from continuing operations as net income (loss) from continuing operations excluding (i) provision for income taxes, (ii) interest income or expense, (iii) depreciation, (iv) amortization of intangibles, and (v) stock based compensation. Management uses this non-GAAP financial measure as a primary measure in monitoring and evaluating our ongoing operating results and trends of our operations. We believe that excluding income (loss) from discontinued operations provides a more relevant measure of our present web services business. Income (loss) from discontinued operations relates to the Company's prior business of manufacturing personal computers, which the Company sold in fiscal 2001, and is wholly unrelated to the Company's present web services business. Management believes the exclusion of stock based compensation provides a more consistent comparison against prior periods, since stock based compensation was not included in net income (loss) for prior fiscal years. Management believes that measuring the performance of the business without regard to interest, taxes and depreciation and amortization can make trends in operating results more readily apparent, and when considered with other information, assist management and investors in evaluating our ability to generate future earnings.
Adjusted net income (loss) from continuing operations should be considered in addition to, and not as a substitute for, net income or loss or other measures of financial performance reported in accordance with GAAP. Adjusted net income (loss) from continuing operations does not take into account costs of doing business that can be substantial, such as income taxes and interest expense. Adjusted net income (loss) from continuing operations may not be comparable to similarly captioned information reported by other companies.
Web.com, Inc., formerly Interland, Inc., provides web solutions, websites and web services, with do-it-yourself and professional website design, website hosting, ecommerce, web marketing and email. Since 1995, Web.com has assisted individuals and small businesses build a web presence, with more than 4 million websites utilizing Web.com's proprietary tools, services and patented technology.
For more information about Web.com, please visit: www.web.com.
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