Current Report


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 8-K

 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 9, 2009
 
 
Web.com Group, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
         
Delaware
 
000-51595
 
94-3327894
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
 
     
12808 Gran Bay Parkway West, Jacksonville, FL
 
32258
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code: (904) 680-6600
 

(Former name or former address, if changed since last report.)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 

Item 8.01 Other Events

A copy of material which will be used in an investor presentation delivered by Web.com Group, Inc. representatives from time to time is attached to this Current Report on Form 8-K as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits

(d)  Exhibits .
 
99.1
Investor Presentation Material
 
 
2

 
 
 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
     
   
WEB.COM GROUP, INC.
   
(Registrant)
   
Date: June 9, 2009
 
 
/s/ Matthew P. McClure
   
Matthew P. McClure, Secretary
 
3


 
 
 

INDEX OF EXHIBITS
 
99.1
Investor Presentation Material
  4

Exhibit 99.1

June 2009

David Brown
Chairman and CEO

Needham Fourth Annual
Internet And Digital Media Conference

 

2

Safe-Harbor Statement

This presentation includes certain "forward-looking statements" including, without limitation, statements regarding Web.com’s expectations
about its future financial performance and market position, that 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 forward-looking statements
include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this presentation that are not
historical facts.  These statements are sometimes identified by words such as “believe”, “growing”, “emerge” or words of similar meaning.  
These statements are based on our 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, our ability to
integrate acquired businesses, our ability to maintain our sales efficiency, our ability to maintain our existing, and develop new, strategic
relationships, the number of our net subscriber additions and our monthly customer turnover.  These and other risk factors are set forth
under the caption "Risk Factors" in Web.com’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, 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.

 

3

Company Overview

Leader in online marketing for small businesses

Over 265,000 paid subscribers (3/31/09)

Solid financial profile:

~$119 million Last 12-Month (LTM) Revenue

~18% LTM non-GAAP operating margin

~$18 million LTM free cash flow

Founded in 1997 with headquarters in Jacksonville, FL

 

4

Investment Highlights

Addressing a large, underserved market opportunity

Growing contribution from suite of online marketing solutions

Increasingly viewed as partner of choice by SMB-focused vendors

Well positioned to manage through economic storm:

Significant critical mass

Large customer base

History of profitability and cash flow

Strong balance sheet

Management has executed successfully through previous
economic cycles

Positioning company for enhanced, long-term growth

 

60 Year Advertising Trends;
Internet Growth Skyrockets

5

Sources:  Bob Cohen/Universal McCann, Borrell Associates Inc.

+ Internet
market  share
moves from 0%
to <15%

in 10 years

+ Internet
growth
trajectory
similar to
introduction of
TV

+ Traditional
“local” media
share on
decline

+ Trends follow
consumer
information
consumption
patterns

 

6

A Massive Online Market Opportunity

 

7

Macro Trend Takeaways;
More Advertising and Marketing Dollars Coming Online

While online ad spending grows, traditional media
(magazines, YP, newspapers, TV, radio and direct
marketing) spending is primarily down

Website development, SEM, SEO, eCommerce, mobile and
video advertising are up; “Long Tail” companies primarily
composed of SMBs, see value and results marketing online

Local search is expected to eclipse top-line search growth
through 2013; indications point to more local businesses
building websites, buying search, adding content and
actively managing their online presence   (Kelsey, March ‘09)

 

8

Small Businesses Need Help Navigating the Online World

They’re focused on running their business; limited time;
lack of expertise

Require online marketing experts to help them succeed

Web.com offers complete solutions and customer
support to ensure success

SMBs willing to pay for value delivered; measure
success one lead, call or email at a time

 

9

Evolution of Web.com

200x

2009

Web.com started in 1997 with basic websites and has evolved into a full
service provider of online marketing solutions

Solutions are sold directly to SMB’s as well as through partnerships

 

10

Growing Contribution of Online Marketing Solutions

>25%

15+%

<1%

OF TOTAL

REVENUE

%

Increasing SMB online marketing
offerings a significant driver of long-
term growth strategy

Over 25% of Web.com’s total revenue
derived from diverse suite of online
marketing tools; up from less than 1%
in 200
2

Solutions complementary to web
presence; increases value to customer;
SEM, SEO, eCommerce, etc

Solid Cactus acquisition adds further
critical mass within eCommerce

 

11

Pursuing the SMB eCommerce Market Opportunity

+ Web.com has built
a platform and
service delivery
infrastructure to fully
serve customers
eCommerce needs

+ Approx $1 billion in
eCommerce
transactions
facilitated through
Web.com annually

+ eCommerce is a
growing area of
interest for SMBs
and Web.com

 

12

Web.com: The Partner of Choice

90+%

50+%

50+ partners ensures stability and highly-diversified revenue generation

Supports multi-channel acquisition strategy: online marketing, affiliate
marketing, direct to brand, outbound/inbound sales, enterprise, cross-sell
and upsell to existing customer base

Within 10 years, Web.com’s partnership strategy has resulted in largest
partner accounting for small percentage of Web.com’s overall business
(down from 90%)

 

13

Significant Accomplishments in a Difficult Environment

Integrated major acquisition

Delivering strong profitability and cash flow

Using strong financial position to enhance shareholder value

Executing company’s first share repurchase program

Acquiring complementary solutions

Maintaining and growing large subscriber base

Expanding distribution network and signing key partners

Advancing leadership position in online marketing for small
businesses

Positioning Web.com for long-term growth

 

14

SMB Online Marketing Universe

 

15

Annual Revenue

 

16

Annual Non-GAAP Operating Margin

Non-GAAP operating margin excludes the effect of stock-based compensation, amortization of intangibles, non-recurring
restructuring charges and revenue eliminated in purchase accounting. During Q4’08, Web.com had a negative GAAP Operating
Margin of 346% due to a $103 million goodwill and asset impairment charge, and a non-GAAP 22% operating margin in Q4’08.

*2007 Non-GAAP Operating Margin impacted by merger-related expenses

*

 

17

Non-GAAP EPS

Non-GAAP Net Income and Non-GAAP Net Income Per Share . The Company excludes from non-GAAP net income and non-
GAAP net income per share amortization of intangibles, income tax expense, fair value adjustment to deferred revenue and
stock based compensation, and includes cash income tax expense, because management believes that excluding such
measures helps investors better understand the Company’s operating activities.

 

Adjusted EBITDA

Adjusted EBITDA excludes depreciation expense, amortization of intangibles, income tax, interest expense, interest income,
and stock-based compensation, because management believes that excluding such items helps investors better understand
the Company's operating activities.

 

19

Web.com Investment Highlights

Massive number of consumers and small businesses
moving online

Web.com has a strong market position

Offers complete solution for SMB online marketing needs

Well positioned to weather the current economic storm
and positioned for long-term growth

Proven ability to generate significant cash flow and
profitability during healthy and challenging economic
environments

 

June 2009

David Brown
Chairman and CEO

Needham Fourth Annual
Internet And Digital Media Conference