Mar. 9, 2016
JACKSONVILLE, Fla., March 09, 2016 (GLOBE NEWSWIRE) -- Web.com Group, Inc. (Nasdaq:WEB), a leading provider of Internet services and online marketing solutions for small businesses, today announced it has completed the acquisition of 100% of the outstanding shares of Yodle, a leader in local digital marketing, in an all cash transaction.
"We are excited to have Yodle join the Web.com family. Yodle has a strong track record of developing and selling innovative internet based marketing solutions that help small businesses drive new business and retain existing customers. I expect great things from combining the talent and products of Yodle and Web.com. We will be better positioned to fulfill our mission of helping small businesses succeed using the internet and technology," said David L. Brown, chairman, chief executive officer and president of Web.com.
Brown continued, "This acquisition builds on our strategic position as a leading provider of value added digital marketing solutions, increases Web.com's exposure to higher growth markets and adds new products and capabilities. Specifically, we will be gaining cloud based marketing solutions that are vertically focused, office automation business applications and a marketing platform dedicated to franchise businesses."
In connection with the Yodle acquisition, Web.com entered into an amended five-year senior secured credit facility comprised of a $390 million term loan and a $150 million revolving credit facility priced at LIBOR plus 300 basis points with step downs upon deleveraging. Borrowings of $200 million from the term loan and $110 million from the revolver were used to pay Yodle shareholders $300 million and cover approximately $10 million of deal related costs at closing. An additional $20 million will be paid at the first anniversary of the closing date, and $22 million will be paid at the second anniversary of the closing date.
Web.com is updating its previously issued guidance taking into account the closing of the Yodle acquisition. Based on the information available as of March 9, 2016 Web.com is issuing the following guidance for the first quarter and full year 2016.
|Guidance As of March 9, 2016||Guidance As of February 11, 2016|
|Web.com + Yodle||Stand-Alone Web.com|
|($ in millions, except per share data)||Q1 2016||FY 2016||Q1 2016||FY 2016|
|Non-GAAP Revenue||$150.5 to $153.5||$748 to $763||$138 to $140||$570 to $580|
|Adjusted EBITDA Margin||~ 26%||~ 23%|
|Non-GAAP Net Income||$30.0 to $32.0||$125.5 to $135.5||$31.4 to $32.4||$135 to $142|
|Non-GAAP Net Income Per Diluted Share||$0.59 to $0.63||$2.46 to $2.66||$0.61 to $0.63||$2.62 to $2.76|
|Diluted Weighted Average Common Shares (millions)||51.1||51.0||51.4||51.5|
|Free Cash Flow||~ $114||~ $130|
Stand-alone Web.com guidance from February 11, 2016 remains unchanged, and the revised guidance reflects the expected financial impact of the Yodle acquisition. Web.com anticipates the transaction will be slightly accretive to non-GAAP earnings per share over the first twelve months, but dilutive in the first three to six months of ownership. As synergies are realized, Web.com expects low teens percentage accretion to non-GAAP earnings per share in 2017. The updated share count reflects recent share repurchases.
Web.com Group, Inc. (Nasdaq:WEB) provides a full range of Internet services to small businesses to help them compete and succeed online. Web.com meets the needs of small businesses anywhere along their lifecycle with affordable, subscription-based solutions including domains, hosting, website design and management, search engine optimization, online marketing campaigns, local sales leads, social media, mobile products and eCommerce solutions. For more information, please visit www.web.com; follow Web.com on Twitter @webdotcom or on Facebook at facebook.com/web.com.
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, in ways that management views or uses to assess the performance of the Company. 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.
Relative to each of the non-GAAP measures Web.com presents, management further sets forth its rationale as follows:
In respect of the foregoing, Web.com provides the following supplemental information to provide additional context for the use and consideration of the non-GAAP financial measures used elsewhere in this press release:
This press release includes certain "forward-looking statements" including, without limitation, statements regarding Web.com's expectations with respect to the amount of unused revolver capacity after the Yodle closing, the amounts expected to be paid to Yodle shareholders on the first and second anniversaries of the closing, that combining of Yodle and Web.com will better position the company to help small businesses succeed using the internet and technology, whether the Yodle transaction is expected to be accretive to non-GAAP earnings per share over the first twelve months after the closing of the transaction, and all statements related to Web.com's future financial performance for the first quarter and full year 2016 under the heading "Outlook" in this press release. These statements are subject to risks, uncertainties and other factors that could cause actual results or outcomes to differ materially from those contemplated by the forward-looking statements. These statements are sometimes identified by words such as "expects," "guidance," "anticipates," and "estimates." As a result of the ultimate outcome of such risks and uncertainties, Web.com's actual results could differ materially from those anticipated in these forward-looking statements. These statements are based on Web.com's current beliefs or expectations, and there are a number of important factors that could cause the actual results or outcomes to differ materially from those indicated by these forward-looking statements, including, without limitation, risks related to: the successful integration of Yodle and its products and services into Web.com; the successful offering of the combined products and services of Web.com and Yodle; and other risks that may impact Web.com's business. Other risk factors are set forth under the caption, "Risk Factors," in Web.com's Form 10-K for the year ended December 31, 2015, as filed with the Securities and Exchange Commission, which is available on a website maintained by the Securities and Exchange Commission at www.sec.gov. Web.com expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein as a result of new information, future events or otherwise.
|Web.com Group Inc.|
|Reconciliation of GAAP to Non-GAAP Guidance|
|($ in millions, except per share data)|
|Guidance As of March 9, 2016||Guidance As of February 11, 2016|
|Web.com + Yodle||Stand Alone Web.com|
|FY 2016||Q1 2016||FY 2016|
|Reconciliation of forecasted GAAP revenue to
forecasted Non-GAAP revenue
|GAAP revenue||$135.5 to $137.5||$562 to $572|
|Fair value adjustment to deferred revenue||~ $2.5||~$8|
|Non-GAAP revenue||$138 to $140||$570 to $580|
|Reconciliation of forecasted net cash provided by
operating activities to forecasted free cash flow
|Net cash provided by operating activities||~$131||~$145|
|Free cash flow||~114||~$130|
Contacts Investors: Ira Berger 904-680-6909 [email protected] Media: John Herbkersman 904-251-6297 [email protected]