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Interland Reports Financial Results for Transition Period

February 9, 2006

ATLANTA, Feb. 9, 2006 (PRIMEZONE) -- Interland (Nasdaq:INLD), soon to be Web.com, Inc., a leading provider of websites and online services for small and medium-sized businesses (SMBs), today reported results for its transition period ended December 31, 2005. As previously reported, Interland moved from its past practice of reporting on a fiscal year ending August 31, to a conventional calendar reporting year ending December 31 beginning on January 1, 2006. As a result, the company is required to report financial results for the transition period including the months of September, October, November (which was previously reported) and December. This transition report is pursuant to Section 13 of the Securities Exchange Act of 1934 for the transition period from September 1, 2005 to December 31, 2005.

Summary of Four Month Transition Period Results:

  • Total revenues for the four-month period were $16.3 million.
  • Net loss for the four-month period was $3.0 million, or negative $0.19 per share.
  • Earnings before interest, taxes, depreciation, and amortization ("EBITDA") (1) for the four-month period was negative $1.5 million. This included restructuring charges, net of one time gains, of roughly $0.8 million and stock-based compensation of approximately $0.5 million.
  • Cash and investment position, which includes cash and cash equivalents of $17.4 million and restricted investments of $9.3 million, was $26.7 million.

"This transition period gives investors an added window into our financials which showed the overall health of the business getting stronger," stated Jeff Stibel, President and CEO, Interland.

For further information on the quarter, please refer to the company's Form 10-Q for the transition report.

About Interland / Web.com

Interland, Inc. (Nasdaq:INLD) is a leading provider of websites and online services focused on helping small and medium-sized businesses achieve success by providing the knowledge, services and tools to build, manage and promote businesses online. Interland offers a wide selection of online services, including do it yourself and custom website development, website hosting, ecommerce, web marketing and web mail tools. The company plans to change its corporate name to Web.com, Inc. in the first half of 2006. For more information on the company, please visit www.interland.com or www.web.com or call at 1-800-WEB-HOST.

Interland will host a conference call today to discuss its quarterly results at 9:30 a.m. ET (6:30 a.m. PT). A live webcast of the call can be accessed on the investors section of the company's website at www.interland.com. A replay of the call will be available on the site for seven days.

(1) EBITDA from continuing operations is a non-GAAP financial measure that is most directly comparable to the GAAP financial measure of Net Loss from continuing operations. Reconciliations of the non-GAAP measure to both Net Loss from continuing operations, as well as to Net Cash Used in Operating Activities, follow.


 INTERLAND, INC.
 UNAUDITED CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share amounts)


                                                        For the 
                                                   Four Months Ended
                                                  --------------------
                                                  12/31/05    12/31/04
                                                  --------------------
 Revenues                                         $ 16,292    $ 30,573

 Operating costs and expenses:
  Network operating costs, exclusive of 
   depreciation shown below                          2,963       7,474
  Sales and marketing, exclusive of 
   depreciation shown below                          3,411       5,264
  Technical support, exclusive of 
   depreciation shown below                          2,348       5,050
  General and administrative, exclusive 
   of depreciation shown below                       7,204       9,847
  Bad debt expense                                     373         632
  Depreciation and amortization                      1,750       7,705
  Restructuring costs                                1,626         --
  Other expense (income), net                         (165)        (14)
                                                  --------------------
  Total operating costs and expenses                19,510      35,958
                                                  --------------------
 Operating loss                                     (3,218)     (5,385)
 Interest income (expense), net                        324          95
                                                  --------------------
 Loss from continuing operations 
  before income taxes                               (2,894)     (5,290)
 Income tax benefit (expense)                          --          --
                                                  --------------------
 Net loss from continuing operations                (2,894)     (5,290)
 Income/(loss) from discontinued 
  operations, net of tax                              (146)        608
                                                  --------------------
 Net loss                                         $ (3,040)   $ (4,682)
                                                  ====================

 Net Income/(loss) per share, basic 
  and diluted:
   Continuing operations                           $ (0.18)    $ (0.33)
   Discontinued operations                           (0.01)       0.04
                                                  ---------    --------
                                                   $ (0.19)    $ (0.29)
                                                  =========    ========

 Number of shares used in per share 
  calculation:
   Basic and diluted                                16,272      16,016


 INTERLAND, INC.
 UNAUDITED CONSOLIDATED BALANCE SHEETS
 (In thousands)

                                                          As of
                                                  --------------------
                                                   Dec. 31,  Aug. 31, 
                                                    2005      2005
                                                  --------------------
 Assets
    Current assets
     Cash and cash equivalents                    $ 17,370    $ 16,891
     Trade receivables, net of  
      allowance for doubtful accounts                1,812       1,365
  
 Other receivables                                   1,180      11,502
     Prepaids and other current assets               2,026       2,698
     Restricted investments                            276         258
                                                  --------    --------  
    Total current assets                            22,664      32,714

     Restricted investments                          9,015       9,299
     Securities, held-to-maturity                       53          50
     Property plant and equipment, net               6,303       5,858
     Goodwill                                          921         --
     Intangibles, net                                6,568       3,038
     Other assets                                    5,600       5,600
                                                  --------    --------
 Total assets                                     $ 51,124    $ 56,559
                                                  ========    ========
  Liabilities and shareholders' equity
    Current liabilities
     Accounts payable                             $    934    $  2,355
     Accrued expenses                                6,232      10,465
     Accrued restructuring charges                   4,416       4,717
     Current portion of long-term debt 
      and capital lease obligations                  1,693         859
     Deferred revenue                                4,637       4,542
                                                  --------    --------
    Total current liabilities                       17,912      22,938

     Long-term debt and capital lease 
      obligations                                    3,850       2,510
     Deferred revenue, long-term                       206         229
     Other liabilities                                 934         939
                                                  --------    --------
 Total liabilities                                  22,902      26,616
                                                  --------    --------

 Shareholders' equity
   Common stock, $.01 par value, 
     authorized 21 million shares,
     issued and outstanding 16.4 and 
     16.4 million shares, respectively                 166         164
   Additional capital                              325,493     323,498
   Warrants                                          2,128       2,806
   Note receivable from shareholder                   (735)       (735)
   Accumulated deficit                            (298,830)   (295,790)
                                                  --------    --------
 Total shareholders' equity                         28,222      29,943
                                                  --------    --------
 Total liabilities and shareholders' 
  equity                                          $ 51,124    $ 56,559
                                                  ========    ========

EBITDA is defined as net income (loss) less (i) provision for income taxes, (ii) interest income or expense, and (iii) depreciation and amortization. EBITDA is not an indicator of financial performance under generally accepted accounting principles and may not be comparable to similarly captioned information reported by other companies. In addition, it does not replace net income (loss), operating income (loss), or cash flows from operating activities as indicators of operating performance. The effect of taxes and interest on Interland's net loss is not significant, but depreciation and amortization, primarily as a result of acquisitions, is significant. The Company believes that measuring the performance of the business without regard to non-cash depreciation and amortization can make trends in operating results more readily apparent, and when considered with other information, assist investors and other users of the Company's financial statements who wish to evaluate the Company's ability to generate future cash flows.

The following table reflects the calculation of EBITDA from continuing operations and a reconciliation to net cash provided by (used in) operating activities:


                                                        For the 
                                                   Four Months Ended
                                                  --------------------
                                                  12/31/05   12/31/04
                                                  --------------------
  Net loss                                        $ (3,040)   $ (4,682)
                                                
    Depreciation and amortization                    1,750       7,705
    Interest expense (income)                         (324)        (95)
    Discontinued operations                            146        (608)

                                                  --------------------
  EBITDA                                          $ (1,468)    $ 2,320
                                                  ====================
    Interest income / (expense)                        324          95
    Provision for bad debts                            373         632
    (Gain)/Loss on the sale of assets                  --          (14)
    Other non-cash adjustments                         537         210
    Restructuring charges                            1,626         --
    Changes in assets and liabilities:
       Cash received from sale of 
         dedicated assets                           11,267         --
       Receivables, net                             (1,765)       (273)
       Other current assets                            692         745
       Accounts payable, accrued
        expenses, and deferred revenue              (8,109)     (4,712)
                                                  --------------------
  Net cash provided by (used in) 
  operating activities                             $ 3,477      $ (997)
                                                  ====================

CONTACT: Interland
Investor and Press Contact:
Peter Delgrosso
404-260-2500
pdelgrosso@interland.com