Endurance International Group Holdings, Inc. (NASDAQ: EIGI), a
leading provider of cloud-based platform solutions designed to help
small and medium-sized businesses succeed online, today reported
financial results for its first quarter ended March 31, 2019.
“We are pleased with our operational execution in the first
quarter and our results reflect continued progress positioning our
multi-brand platform for a return to growth,” commented Jeffrey H.
Fox, president and chief executive officer of Endurance
International Group. “Our 2019 plan to continue simplifying
operations and investing to deliver increased value to customers of
our key strategic brands is progressing. We continue to anticipate
a transition back to revenue growth in the second half of 2019 with
adjustments to our guidance that better reflect the timing of our
progress.”
First Quarter 2019 Financial Highlights
- Revenue for the first quarter of 2019 was $280.7 million, a
decrease of 3.7 percent compared to $291.4 million for the first
quarter of 2018.
- Net loss for the first quarter of 2019 was $3.5 million, or
$(0.02) per diluted share, compared to net loss of $2.5 million, or
$(0.02) per diluted share, for the first quarter of 2018.
- Adjusted EBITDA for the first quarter of 2019 was $78.5
million, a decrease of 8.9 percent compared to $86.2 million for
the first quarter of 2018.
- Cash flow from operations for the first quarter of 2019 was
$15.0 million, a decrease of 71.3 percent compared to $52.4 million
for the first quarter of 2018.
- Free cash flow, defined as cash flow from operations less
capital expenditures and financed equipment obligations, for the
first quarter of 2019 was $7.1 million, a decrease of 84.3 percent
compared to $44.9 million for the first quarter of 2018.
First Quarter Operating Highlights
- Total subscribers on platform at March 31, 2019 were
approximately 4.783 million, compared to approximately 5.011
million subscribers at March 31, 2018 and approximately 4.802
million subscribers at December 31, 2018. See “Total
Subscribers” below.
- Average revenue per subscriber, or ARPS, for the first quarter
of 2019 was $19.52, compared to $19.30 for the first quarter of
2018 and $19.50 for the fourth quarter of 2018. See “Average
Revenue Per Subscriber” below.
Fiscal 2019 Guidance
The Company is updating its guidance for the full year ending
December 31, 2019. As of the date of this release,
April 30, 2019, the Company expects:
|
2018
Actualas Reported |
Prior
Guidance |
Revised
Guidance(as of April 30,
2019) |
GAAP revenue |
$1.145
billion |
$1.140
to $1.160 billion |
$1.120
to $1.140 billion |
Adjusted EBITDA |
$338
million |
$310 to
$330 million |
$300 to
$320 million |
Free cash flow |
$129
million |
$115 to
$125 million |
$110 to
$120 million |
Adjusted EBITDA and free cash flow are non-GAAP financial
measures. A reconciliation of these non-GAAP financial measures to
their most comparable measure calculated in accordance with GAAP is
provided in the financial statement tables included at the end of
this press release.
First and Second Quarter 2018 Income Tax Expense
RevisionAs originally disclosed in third quarter of 2018,
the Company revised its deferred income tax provision for the first
and second quarter of 2018 to reflect a revision that favorably
impacted net income (loss) for these periods. This revision
did not impact the previously reported figures for Adjusted EBITDA,
Cash Flow from Operations or Free Cash Flow.
Conference Call and Webcast Information
Endurance International Group’s first quarter 2019 financial
results teleconference and webcast is scheduled to begin at 8:00
a.m. EDT on Tuesday, April 30, 2019. To participate on the
live call, analysts and investors should dial (888) 734-0328 at
least ten minutes prior to the call. Endurance International Group
will also offer a live and archived webcast of the conference call,
accessible from the Investor Relations section of the company’s
website at http://ir.endurance.com.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance
with GAAP, we use adjusted EBITDA and free cash flow, which are
non-GAAP financial measures, to evaluate the operating and
financial performance of our business, identify trends affecting
our business, develop projections and make strategic business
decisions. A non-GAAP financial measure is a numerical
measure of a company’s operating performance, financial position or
cash flow that excludes amounts that are included in the most
directly comparable measure calculated and presented in accordance
with GAAP or includes amounts that are excluded from the most
directly comparable measure calculated and presented in accordance
with GAAP.
Our non-GAAP financial measures may not provide information that
is directly comparable to that provided by other companies in our
industry, as other companies in our industry may calculate non-GAAP
financial results differently. In addition, there are limitations
in using non-GAAP financial measures because they are not prepared
in accordance with GAAP and exclude expenses that may have a
material impact on our reported financial results. For example,
adjusted EBITDA excludes interest expense, which has been and will
continue to be for the foreseeable future a significant recurring
expense in our business. The presentation of non-GAAP financial
information is not meant to be considered in isolation from, or as
a substitute for, the most directly comparable financial measures
prepared in accordance with GAAP. We urge you to review the
additional information about adjusted EBITDA and free cash flow
shown below, including the reconciliations of these non-GAAP
financial measures to their comparable GAAP financial measures, and
not to rely on any single financial measure to evaluate our
business.
Adjusted EBITDA is a non-GAAP financial measure that we
calculate as net (loss) income, excluding the impact of interest
expense (net), income tax expense (benefit), depreciation,
amortization of other intangible assets, stock-based compensation,
restructuring expenses, transaction expenses and charges, (gain)
loss of unconsolidated entities, impairment of other long-lived
assets, SEC investigations reserve, and shareholder litigation
reserve. We view adjusted EBITDA as a performance measure and
believe it helps investors evaluate and compare our core operating
performance from period to period.
Free Cash Flow, or FCF, is a non-GAAP financial measure that we
calculate as cash flow from operations less capital expenditures
and financed equipment obligations. We believe that FCF provides
investors with an indicator of our ability to generate positive
cash flows after meeting our obligations with regard to capital
expenditures (including financed equipment obligations).
Key Operating Metrics
Total Subscribers - We define total subscribers
as the approximate number of subscribers that, as of the end of a
period, are identified as subscribing directly to our products on a
paid basis, excluding accounts that access our solutions via
resellers or that purchase only domain names from us. Subscribers
of more than one brand, and subscribers with more than one distinct
billing relationship or subscription with us, are counted as
separate subscribers. Total subscribers for a period reflects
adjustments to add or subtract subscribers as we integrate
acquisitions and/or are otherwise able to identify subscribers that
meet, or do not meet, this definition of total subscribers. In the
first quarter of 2019, these adjustments had a net negative impact
of approximately 2,000 subscribers on our total subscriber
count.
Average Revenue Per Subscriber (ARPS) - We
calculate ARPS as the amount of revenue we recognize in a period,
including marketing development funds and other revenue not
received from subscribers, divided by the average of the number of
total subscribers at the beginning of the period and at the end of
the period, which we refer to as average subscribers for the
period, divided by the number of months in the period. See
definition of “Total Subscribers” above. ARPS does not represent an
exact measure of the average amount a subscriber spends with us
each month, since our calculation of ARPS is impacted by revenues
generated by non-subscribers.
Forward-Looking StatementsThis press release
includes certain “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, including statements
concerning our updated financial guidance and plan for fiscal year
2019, our expectation that we will transition back to revenue
growth in the second half of 2019, the expected outcome of our
investment and operational plans, including our focus on
simplifying our business and delivering increased customer value,
and our expectations of future growth and financial and operational
performance in general. These forward-looking statements include,
but are not limited to, plans, objectives, expectations and
intentions and other statements contained in this press release
that are not historical facts, and statements identified by words
such as “expects,” "anticipates," “believes,” “estimates,” “may,”
“continue,” “positions,” “confident,” and variations of such words
or words of similar meaning and the use of future dates. These
forward-looking statements reflect our current views about our
plans, intentions, expectations, strategies and prospects, which
are based on the information currently available to us and on
assumptions we have made. Although we believe that our plans,
intentions, expectations, strategies and prospects as reflected in
or suggested by those forward-looking statements are reasonable, we
can give no assurance that these plans, intentions, expectations,
strategies or prospects will be attained or achieved. Furthermore,
actual results may differ materially from those described in the
forward-looking statements and will be affected by a variety of
risks and factors that are beyond our control including, without
limitation: the possibility that our financial guidance or our
actual financial results may differ from expectations; the
possibility that we may not be able to execute our updated 2019
plan or our investment or operational plans or that these plans
will not result in the anticipated benefits to our business; the
possibility that we will continue to experience decreases in our
subscriber base; an adverse impact on our business from litigation
or regulatory proceedings; an adverse impact on our business from
our substantial indebtedness and the cost of servicing our debt;
the rate of growth of the Small and Medium Business (“SMB”) market
for our solutions; our inability to increase sales to our existing
subscribers, or retain our existing subscribers; data breaches;
system or Internet failures; our inability to maintain or improve
our competitive position or market share; and other risks and
uncertainties discussed in our filings with the SEC, including
those set forth under the caption “Risk Factors” in our Annual
Report on Form 10-K for the period ended December 31, 2018 filed
with the SEC on February 21, 2019 and other reports we file with
the SEC.
We assume no obligation to update any forward-looking statements
contained in this document as a result of new information, future
events or otherwise.
About Endurance International GroupEndurance
International Group Holdings, Inc. (NASDAQ:EIGI) helps millions of
small businesses worldwide with products and technology to enhance
their online web presence, email marketing, business solutions, and
more. The Endurance family of brands includes: Constant Contact,
Bluehost, HostGator, Domain.com and SiteBuilder, among others.
Headquartered in Burlington, Massachusetts, Endurance employs over
3,700 people across the United States, Brazil, India and the
Netherlands. For more information, visit: www.endurance.com.
Endurance International Group and the compass logo are
trademarks of The Endurance International Group, Inc.
Constant Contact, the Constant Contact logo and other brand names
of Endurance International Group are trademarks of The Endurance
International Group, Inc. or its subsidiaries.
Investor Contact:Angela WhiteEndurance
International Group(781) 852-3450ir@endurance.com
Press Contact:Kristen AndrewsEndurance
International Group(781) 418-6716press@endurance.com
Endurance International Group Holdings,
Inc.Consolidated Balance
Sheets(in thousands, except share and per share
amounts)
|
December 31, 2018 |
|
March 31, 2019 |
Assets |
|
|
(unaudited) |
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
88,644 |
|
|
$ |
70,084 |
|
Restricted
cash |
1,932 |
|
|
1,931 |
|
Accounts
receivable |
12,205 |
|
|
13,556 |
|
Prepaid
domain name registry fees |
56,779 |
|
|
59,193 |
|
Prepaid
commissions |
41,458 |
|
|
41,686 |
|
Prepaid and
refundable taxes |
7,235 |
|
|
7,826 |
|
Prepaid
expenses and other current assets |
27,855 |
|
|
29,557 |
|
Total current assets |
236,108 |
|
|
223,833 |
|
Property and
equipment—net |
92,275 |
|
|
87,119 |
|
Operating
lease right-of-use assets |
— |
|
|
109,302 |
|
Goodwill |
1,849,065 |
|
|
1,848,602 |
|
Other
intangible assets—net |
352,516 |
|
|
331,409 |
|
Deferred
financing costs—net |
2,656 |
|
|
2,441 |
|
Investments |
15,000 |
|
|
15,000 |
|
Prepaid
domain name registry fees, net of current portion |
11,207 |
|
|
11,412 |
|
Prepaid
commissions, net of current portion |
42,472 |
|
|
44,780 |
|
Other
assets |
5,208 |
|
|
2,872 |
|
Total assets |
$ |
2,606,507 |
|
|
$ |
2,676,770 |
|
Liabilities and
stockholders’ equity |
|
|
|
Current liabilities: |
|
|
|
Accounts
payable |
$ |
12,449 |
|
|
$ |
9,783 |
|
Accrued
expenses |
79,279 |
|
|
61,151 |
|
Accrued
taxes |
2,498 |
|
|
3,982 |
|
Accrued
interest |
25,259 |
|
|
15,018 |
|
Deferred
revenue |
371,758 |
|
|
379,181 |
|
Operating
lease liabilities—short term |
— |
|
|
22,250 |
|
Current
portion of notes payable |
31,606 |
|
|
31,606 |
|
Current
portion of financed equipment |
8,379 |
|
|
6,502 |
|
Deferred
consideration—short term |
2,425 |
|
|
2,464 |
|
Other
current liabilities |
3,147 |
|
|
2,408 |
|
Total current
liabilities |
536,800 |
|
|
534,345 |
|
Long-term deferred
revenue |
96,140 |
|
|
99,037 |
|
Operating lease
liabilities—long term |
— |
|
|
96,469 |
|
Notes payable—long term,
net of original issue discounts of $21,349 and $20,263 and deferred
financing costs of $31,992 and $30,474, respectively |
1,770,055 |
|
|
1,747,659 |
|
Deferred tax
liability |
16,457 |
|
|
15,228 |
|
Deferred
consideration—long term |
1,364 |
|
|
1,386 |
|
Other liabilities |
11,237 |
|
|
4,021 |
|
Total liabilities |
2,432,053 |
|
|
2,498,145 |
|
Stockholders’ equity: |
|
|
|
Preferred
Stock—par value $0.0001; 5,000,000 shares authorized; no shares
issued or outstanding |
— |
|
|
— |
|
Common
Stock—par value $0.0001; 500,000,000 shares authorized; 143,444,515
and 143,561,595 shares issued at December 31, 2018 and March 31,
2019, respectively; 143,444,178 and 143,561,595 outstanding at
December 31, 2018 and March 31, 2019, respectively |
14 |
|
|
14 |
|
Additional
paid-in capital |
961,235 |
|
|
970,256 |
|
Accumulated
other comprehensive loss |
(3,211 |
) |
|
(4,573 |
) |
Accumulated
deficit |
(783,584 |
) |
|
(787,072 |
) |
Total stockholders’
equity |
174,454 |
|
|
178,625 |
|
Total liabilities and
stockholders’ equity |
$ |
2,606,507 |
|
|
$ |
2,676,770 |
|
|
|
Endurance International Group Holdings,
Inc.Consolidated Statements of Operations and
Comprehensive Income
(Loss)(unaudited)(in thousands,
except share and per share amounts)
|
Three Months Ended March 31, |
|
2018 |
|
2019 |
Revenue |
$ |
291,356 |
|
|
$ |
280,683 |
|
Cost of revenue |
133,906 |
|
|
123,854 |
|
Gross profit |
157,450 |
|
|
156,829 |
|
Operating expense: |
|
|
|
Sales and marketing |
67,356 |
|
|
66,588 |
|
Engineering and development |
19,917 |
|
|
23,694 |
|
General and administrative |
38,775 |
|
|
31,393 |
|
Total operating
expense |
126,048 |
|
|
121,675 |
|
Income from
operations |
31,402 |
|
|
35,154 |
|
Other income
(expense): |
|
|
|
Interest income |
204 |
|
|
291 |
|
Interest expense |
(36,050 |
) |
|
(37,214 |
) |
Total other
expense—net |
(35,846 |
) |
|
(36,923 |
) |
Loss before income taxes
and equity earnings of unconsolidated entities |
(4,444 |
) |
|
(1,769 |
) |
Income tax (benefit)
expense |
(1,943 |
) |
|
1,719 |
|
Loss before equity
earnings of unconsolidated entities |
(2,501 |
) |
|
(3,488 |
) |
Equity loss of
unconsolidated entities, net of tax |
27 |
|
|
— |
|
Net loss |
$ |
(2,528 |
) |
|
$ |
(3,488 |
) |
Comprehensive income
(loss): |
|
|
|
Foreign
currency translation adjustments |
580 |
|
|
(401 |
) |
Unrealized
gain (loss) on cash flow hedge, net of taxes of ($325) and $304 for
the three months ended March 31, 2018 and 2019, respectively |
1,041 |
|
|
(961 |
) |
Total comprehensive
loss |
$ |
(907 |
) |
|
$ |
(4,850 |
) |
Basic and diluted net loss
per share |
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
Weighted-average common
shares used in computing net loss per share: |
|
|
|
Basic and diluted |
140,361,982 |
|
|
143,512,293 |
|
|
|
Endurance International Group Holdings,
Inc.Consolidated Statements of Cash
Flows(unaudited)(in
thousands)
|
Three Months Ended March 31, |
|
2018 |
|
2019 |
Cash flows from operating
activities: |
|
|
|
Net loss |
$ |
(2,528 |
) |
|
$ |
(3,488 |
) |
Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
Depreciation of property and
equipment |
12,068 |
|
|
11,206 |
|
Amortization of other intangible
assets |
25,735 |
|
|
21,120 |
|
Amortization of deferred financing
costs |
1,894 |
|
|
1,733 |
|
Amortization of net present value
of deferred consideration |
128 |
|
|
61 |
|
Amortization of original issue
discounts |
1,058 |
|
|
1,087 |
|
Stock-based compensation |
6,992 |
|
|
9,016 |
|
Deferred tax expense (benefit) |
(4,068 |
) |
|
(906 |
) |
Loss on sale of assets |
48 |
|
|
26 |
|
Loss from unconsolidated
entities |
27 |
|
|
— |
|
Changes in operating assets and
liabilities, net of acquisitions: |
|
|
|
Accounts
receivable |
2,448 |
|
|
(1,383 |
) |
Prepaid
expenses and other current assets |
(2,811 |
) |
|
(2,292 |
) |
Prepaid and
refundable taxes |
359 |
|
|
(591 |
) |
Leases
right-of-use asset, net |
— |
|
|
573 |
|
Accounts
payable and accrued expenses |
350 |
|
|
(31,512 |
) |
Deferred
revenue |
10,660 |
|
|
10,399 |
|
Net cash provided by
operating activities |
52,360 |
|
|
15,049 |
|
Cash flows from investing
activities: |
|
|
|
Purchases of property and
equipment |
(5,254 |
) |
|
(5,423 |
) |
Net cash used in investing
activities |
(5,254 |
) |
|
(5,423 |
) |
Cash flows from financing
activities: |
|
|
|
Repayments of term loans |
(25,486 |
) |
|
(25,000 |
) |
Principal payments on financed
equipment |
(2,230 |
) |
|
(2,570 |
) |
Proceeds from exercise of stock
options |
25 |
|
|
5 |
|
Net cash used in financing
activities |
(27,691 |
) |
|
(27,565 |
) |
Net effect of exchange
rate on cash and cash equivalents and restricted cash |
(83 |
) |
|
(622 |
) |
Net increase (decrease) in
cash and cash equivalents and restricted cash |
19,332 |
|
|
(18,561 |
) |
Cash and cash equivalents
and restricted cash: |
|
|
|
Beginning of period |
69,118 |
|
|
90,576 |
|
End of period |
$ |
88,450 |
|
|
$ |
72,015 |
|
Supplemental cash flow
information: |
|
|
|
Interest paid |
$ |
42,091 |
|
|
$ |
44,259 |
|
Income taxes paid |
$ |
603 |
|
|
$ |
1,866 |
|
|
|
|
|
|
|
|
|
GAAP to Non-GAAP Reconciliation - Adjusted
EBITDA
The following table presents a reconciliation of net loss
calculated in accordance with GAAP to adjusted EBITDA (all data in
thousands):
|
Three Months Ended March 31, |
|
2018 |
|
2019 |
Net loss |
$ |
(2,528 |
) |
|
$ |
(3,488 |
) |
Interest expense,
net(1) |
35,846 |
|
|
36,923 |
|
Income tax (benefit)
expense |
(1,943 |
) |
|
1,719 |
|
Depreciation |
12,068 |
|
|
11,206 |
|
Amortization of other
intangible assets |
25,735 |
|
|
21,120 |
|
Stock-based
compensation |
6,992 |
|
|
9,016 |
|
Restructuring
expenses |
1,529 |
|
|
2,015 |
|
Loss from unconsolidated
entities |
27 |
|
|
— |
|
Shareholder litigation
reserve |
8,500 |
|
|
— |
|
Adjusted EBITDA |
$ |
86,226 |
|
|
$ |
78,511 |
|
(1) Interest expense includes impact of amortization of
deferred financing costs, original issuance discounts and interest
income.
GAAP to Non-GAAP Reconciliation – Free Cash
Flow
The following table reflects the reconciliation of cash flow
from operations to free cash flow (“FCF”) (all data in
thousands):
|
Three Months Ended March 31, |
|
2018 |
|
2019 |
Cash flow from
operations |
$ |
52,360 |
|
|
$ |
15,049 |
|
Less: |
|
|
|
Capital expenditures and
financed equipment(1) |
(7,484 |
) |
|
(7,993 |
) |
Free cash flow |
$ |
44,876 |
|
|
$ |
7,056 |
|
(1) Capital expenditures during the three months ended
March 31, 2018 and 2019 includes $2.2 million and $2.6 million,
respectively, of principal payments under a three year agreement
for equipment financing. The remaining balance on the equipment
financing is $6.5 million as of March 31, 2019.
Average Revenue Per Subscriber - Calculation and Segment
Detail
We present our financial results in the following three
segments.
- Web presence. The web presence segment consists primarily of
our web hosting brands, including Bluehost and HostGator. This
segment also includes related products such as domain names,
website security, website design tools and services, and e-commerce
products.
- Email marketing. The email marketing segment consists of
Constant Contact email marketing tools and related products and the
SinglePlatform digital storefront solution.
- Domain. The domain segment consists of domain-focused brands
such as Domain.com, ResellerClub and LogicBoxes as well as certain
web hosting brands that are under common management with our
domain-focused brands. This segment sells domain names and domain
management services to resellers and end users, as well as premium
domain names, and also generates advertising revenue from domain
name parking. It also resells domain names and domain management
services to our web presence segment.
The following table presents the calculation of ARPS, on a
consolidated basis and by segment (all data in thousands, except
ARPS data):
|
Three Months Ended March 31, |
|
2018 |
|
2019 |
Consolidated
revenue |
$ |
291,356 |
|
|
$ |
280,683 |
|
Consolidated total
subscribers |
5,011 |
|
|
4,783 |
|
Consolidated average
subscribers for the period |
5,031 |
|
|
4,793 |
|
Consolidated
ARPS |
$ |
19.30 |
|
|
$ |
19.52 |
|
|
|
|
|
Web presence
revenue |
$ |
155,017 |
|
|
$ |
145,960 |
|
Web presence
subscribers |
3,811 |
|
|
3,612 |
|
Web presence average
subscribers for the period |
3,829 |
|
|
3,626 |
|
Web presence
ARPS |
$ |
13.49 |
|
|
$ |
13.42 |
|
|
|
|
|
Email marketing
revenue |
$ |
102,447 |
|
|
$ |
102,740 |
|
Email marketing
subscribers |
518 |
|
|
495 |
|
Email marketing average
subscribers for the period |
519 |
|
|
496 |
|
Email marketing
ARPS |
$ |
65.83 |
|
|
$ |
69.11 |
|
|
|
|
|
Domain revenue |
$ |
33,892 |
|
|
$ |
31,983 |
|
Domain subscribers |
682 |
|
|
676 |
|
Domain average
subscribers for the period |
683 |
|
|
671 |
|
Domain
ARPS |
$ |
16.54 |
|
|
$ |
15.88 |
|
The following table presents revenue, gross profit, and a
reconciliation by segment of net income (loss) calculated in
accordance with GAAP to adjusted EBITDA (all data in
thousands):
|
Three Months Ended March 31,
2018 |
|
Web presence |
|
Email marketing |
|
Domain |
|
Total |
Revenue |
$ |
155,017 |
|
|
$ |
102,447 |
|
|
$ |
33,892 |
|
|
$ |
291,356 |
|
Gross profit |
$ |
74,373 |
|
|
$ |
72,177 |
|
|
$ |
10,900 |
|
|
$ |
157,450 |
|
|
|
|
|
|
|
|
|
Net (loss) income |
$ |
(6,108 |
) |
|
$ |
5,359 |
|
|
$ |
(1,779 |
) |
|
$ |
(2,528 |
) |
Interest expense,
net(1) |
16,986 |
|
|
16,409 |
|
|
2,451 |
|
|
35,846 |
|
Income tax (benefit)
expense |
(4,679 |
) |
|
4,163 |
|
|
(1,427 |
) |
|
(1,943 |
) |
Depreciation |
7,977 |
|
|
3,146 |
|
|
945 |
|
|
12,068 |
|
Amortization of other
intangible assets |
12,008 |
|
|
13,093 |
|
|
634 |
|
|
25,735 |
|
Stock-based
compensation |
5,073 |
|
|
1,408 |
|
|
511 |
|
|
6,992 |
|
Restructuring
expenses |
812 |
|
|
162 |
|
|
555 |
|
|
1,529 |
|
Gain of unconsolidated
entities |
27 |
|
|
— |
|
|
— |
|
|
27 |
|
Shareholder litigation
reserve |
5,745 |
|
|
1,500 |
|
|
1,255 |
|
|
8,500 |
|
Adjusted
EBITDA |
$ |
37,841 |
|
|
$ |
45,240 |
|
|
$ |
3,145 |
|
|
$ |
86,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
2019 |
|
Web presence |
|
Email marketing |
|
Domain |
|
Total |
Revenue |
$ |
145,960 |
|
|
$ |
102,740 |
|
|
$ |
31,983 |
|
|
$ |
280,683 |
|
Gross profit |
$ |
72,241 |
|
|
$ |
74,047 |
|
|
$ |
10,541 |
|
|
$ |
156,829 |
|
|
|
|
|
|
|
|
— |
|
Net (loss) income |
$ |
(6,542 |
) |
|
$ |
5,938 |
|
|
$ |
(2,884 |
) |
|
$ |
(3,488 |
) |
Interest expense,
net(1) |
17,095 |
|
|
17,394 |
|
|
2,434 |
|
|
36,923 |
|
Income tax (benefit)
expense |
895 |
|
|
628 |
|
|
196 |
|
|
1,719 |
|
Depreciation |
7,949 |
|
|
2,324 |
|
|
933 |
|
|
11,206 |
|
Amortization of other
intangible assets |
9,079 |
|
|
11,283 |
|
|
758 |
|
|
21,120 |
|
Stock-based
compensation |
4,893 |
|
|
3,083 |
|
|
1,040 |
|
|
9,016 |
|
Restructuring
expenses |
634 |
|
|
1,354 |
|
|
27 |
|
|
2,015 |
|
Gain of unconsolidated
entities |
— |
|
|
— |
|
|
— |
|
|
— |
|
Shareholder litigation
reserve |
— |
|
|
— |
|
|
— |
|
|
— |
|
Adjusted
EBITDA |
$ |
34,003 |
|
|
$ |
42,004 |
|
|
$ |
2,504 |
|
|
$ |
78,511 |
|
(1) Interest expense includes impact of amortization of
deferred financing costs, original issuance discounts and interest
income.
The following table represents the impact of the income
statement revision to the first quarter of 2018 due to the revised
deferred income tax provision (in thousands, except per share
data):
|
Three Months Ended March 31, 2018 |
|
Originally Filed |
Adjustment |
Revised |
Loss before income taxes
and equity earnings of unconsolidated subsidiaries |
$ |
(4,444 |
) |
$ |
— |
|
$ |
(4,444 |
) |
Income tax expense
(benefit) |
2,617 |
|
(4,560 |
) |
(1,943 |
) |
Loss before equity
earnings of unconsolidated subsidiaries |
(7,061 |
) |
4,560 |
|
(2,501 |
) |
Equity (income) loss of
unconsolidated subsidiaries |
27 |
|
— |
|
27 |
|
Net income (loss) |
$ |
(7,088 |
) |
$ |
4,560 |
|
$ |
(2,528 |
) |
Comprehensive income
(loss) |
|
|
|
Foreign currency translation |
580 |
|
— |
|
580 |
|
Unrealized (gain) loss on cash flow
hedge, net of tax |
1,041 |
|
— |
|
1,041 |
|
Total comprehensive
loss |
$ |
(5,467 |
) |
$ |
4,560 |
|
$ |
(907 |
) |
Basic net income (loss)
per share |
$ |
(0.05 |
) |
$ |
0.03 |
|
$ |
(0.02 |
) |
Diluted net income
(loss) per share |
$ |
(0.05 |
) |
$ |
0.03 |
|
$ |
(0.02 |
) |
Weighted-average common
shares used in computing net income (loss) per share |
|
|
|
Basic |
140,361,982 |
|
— |
|
140,361,982 |
|
Diluted |
140,361,982 |
|
— |
|
140,361,982 |
|
The following table represents the impact of the revised
deferred income tax provision on the impacted balance sheet
accounts as of the dates shown (in thousands):
|
March 31, 2018 |
|
Originally Filed |
Adjustment |
Revised |
Deferred tax
liability |
$ |
27,679 |
|
$ |
(4,560 |
) |
$ |
23,119 |
|
Total liabilities |
2,533,619 |
|
(4,560 |
) |
2,529,059 |
|
Accumulated
deficit |
(795,206 |
) |
4,560 |
|
(790,646 |
) |
Total stockholders'
equity |
144,189 |
|
4,560 |
|
148,749 |
|
Total liabilities and
stockholders' equity |
2,677,808 |
|
— |
|
2,677,808 |
|
The following table represents the impact of the revised
deferred income tax provision on the impacted lines of the
statement of cash flows for the periods shown (in thousands):
|
Three Months Ended March 31, 2018 |
|
Originally Filed |
Adjustment |
Revised |
Net income (loss) |
$ |
(7,088 |
) |
$ |
4,560 |
|
$ |
(2,528 |
) |
Deferred tax
expense |
492 |
|
(4,560 |
) |
(4,068 |
) |
Net cash provided by
operating activities |
52,360 |
|
— |
|
52,360 |
|
GAAP to Non-GAAP Reconciliation of Fiscal Year 2019
Guidance (as of April 30, 2019) - Adjusted EBITDA
The following table reflects the reconciliation of fiscal year
2019 estimated net loss calculated in accordance with GAAP to
fiscal year 2019 guidance for adjusted EBITDA. All figures shown
are approximate.
($ in millions) |
Twelve Months Ending December 31,
2019 |
Estimated net
loss |
$ |
(17 |
) |
$ |
(10 |
) |
Estimated interest
expense (net) |
|
146 |
|
|
148 |
|
Estimated income tax
expense (benefit) |
|
4 |
|
|
6 |
|
Estimated
depreciation |
|
44 |
|
|
48 |
|
Estimated amortization
of acquired intangible assets |
|
83 |
|
|
85 |
|
Estimated stock-based
compensation |
|
36 |
|
|
38 |
|
Estimated restructuring
expenses |
|
4 |
|
|
5 |
|
Estimated transaction
expenses and charges |
|
— |
|
|
— |
|
Estimated (gain) loss
of unconsolidated entities |
|
— |
|
|
— |
|
Estimated impairment of
other long-lived assets |
|
— |
|
|
— |
|
Estimated shareholder
litigation reserve |
|
— |
|
|
— |
|
Adjusted EBITDA
guidance |
$ |
300 |
|
$ |
320 |
|
GAAP to Non-GAAP Reconciliation of Fiscal Year 2019
Guidance (as of April 30, 2019) - Free Cash Flow
The following table reflects the reconciliation of fiscal year
2019 estimated cash flow from operations calculated in accordance
with GAAP to fiscal year 2019 guidance for free cash flow. All
figures shown are approximate.
($ in millions) |
Twelve Months Ending December 31,
2019 |
Estimated cash
flow from operations |
$ |
160 |
|
$ |
175 |
|
Estimated capital
expenditures and financed equipment |
|
(50 |
) |
|
(55 |
) |
Free cash flow
guidance |
$ |
110 |
|
$ |
120 |
|
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