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Endurance International Group Provides Second Quarter 2020 Preliminary Results Update and Reintroduces Full Year 2020 GuidanceBURLINGTON, Mass., July 14, 2020 (GLOBE NEWSWIRE) -- 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, is providing preliminary results for its 2020 second quarter and re-introducing guidance for its 2020 fiscal year. “As we entered the second quarter, the healthcare and economic uncertainties brought on by COVID-19 were impacting global businesses, including the millions of small businesses we serve. Despite these challenges, we remain focused on delivering value to our customers as they navigate this complex environment,” said Jeffrey H. Fox, president and chief executive officer of Endurance International Group. “I am very pleased with our second quarter performance. We added approximately 97,000 net subscribers in the quarter, which compares favorably to our net loss of 13,000 subscribers in the second quarter of 2019. Additionally, we had year over year and sequential revenue growth on both a cash and a GAAP basis, adjusted for the sale of SinglePlatform. We experienced strong demand for our products and services and are very pleased to deliver growth in each of our four strategic brands. We believe that we are seeing the benefit from our investment in solutions that deliver value to customers as they enhance their online presence and digital marketing capability. As a result of our year to date progress, we are re-introducing guidance for the full year.” Second Quarter 2020 Preliminary Results Following are the financial and operational results for the second quarter of 2020. All results are preliminary, with full results to be reported on Thursday, July 30, 2020.
Preliminary cash bookings for the second quarter were $281.6 million, an increase from $267.7 million, in the same period a year ago as adjusted for the sale of SinglePlatform, reflecting year over year growth of approximately 5 percent. Preliminary revenue and total subscribers by segment for the second quarter of 2020 were:
Adjusted EBITDA Adjusted EBITDA for the second quarter of 2020 was $84.0 million, compared to $76.3 million in the same period a year ago, and compared to $75.3 million in the same period a year ago, adjusting for the sale of SinglePlatform. Adjusted EBITDA for the second quarter of 2020 reflects year over year benefit from reduced travel, employee healthcare costs, and facilities-related expense attributable to COVID-19, as well as growth in the demand for products and services. Adjusted EBITDA is a non-GAAP financial measure. Please see “Non-GAAP Financial Measures” below for further information. Cash Flows and Balance Sheet as of June 30, 2020:
Fiscal 2020 Guidance The Company is providing the following guidance as of the date of this release, July 14, 2020. For the full year ending December 31, 2020, the Company expects:
In addition, for 2020 the Company expects cash flow from operations of $175 million and free cash flow of at least $125 million. Please note that the Company is unable to reconcile expected adjusted EBITDA for the second quarter of 2020 and adjusted EBITDA guidance for the full year 2020 to net (loss) income without unreasonable efforts. Please see “Non-GAAP Financial Measures” below for further information. *As previously disclosed, the Company sold its SinglePlatform business on December 5, 2019. These figures represent revenue and adjusted EBITDA for the periods shown as if the Company had sold this business prior to January 1, 2019. From January 1, 2019 until the sale date, the SinglePlatform business contributed approximately $25.4 million in GAAP revenue and $4.0 million in adjusted EBITDA (excluding the impact of corporate cost allocations). For the second quarter of 2019, the SinglePlatform business contributed approximately $6.8 million in GAAP revenue, $6.7 million in cash bookings, and $1.1 million in adjusted EBITDA (excluding the impact of corporate cost allocations). 2020 Second Quarter Financial Results Call on July 30, 2020 The Company will release its 2020 second quarter financial results on Thursday, July 30 at 7:00 a.m. EDT. Management will hold a conference call and webcast on that day at 8:00 a.m. EDT to discuss the Company's financial results. A prepared presentation to accompany the conference call will be posted on the investor relations web site prior to the call.
About Endurance International Group 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: Press Contact: Non-GAAP Financial Measures 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 non-GAAP financial measures shown below and not to rely on any single financial measure to evaluate our business. Revenue - excluding SinglePlatform is a non-GAAP financial measure that we calculate as revenue excluding revenue contributed by our SinglePlatform business, which we sold on December 5, 2019. We believe that this measure helps investors evaluate and compare our past performance excluding the impact of a non-core business that we have sold. Cash Bookings is an operating measure that represents cash receipts from the sale of products to customers in a given period as adjusted for certain items, primarily refunds, chargebacks and other third party costs. We believe that cash bookings provides meaningful insight into the sales of our products and the performance of our business as we typically collect payment at the time of sale and recognize revenue ratably over the term of our customer contracts. 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 on sale of business, (gain) loss of unconsolidated entities, impairment of goodwill and other long-lived assets, 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. Adjusted EBITDA - excluding SinglePlatform is a non-GAAP financial measure that we calculate as adjusted EBITDA less adjusted EBITDA contributed by our SinglePlatform business, which we sold on December 5, 2019. Adjusted EBITDA contributed by our SinglePlatform business excludes the impact of corporate costs that we had allocated to SinglePlatform. We believe that this measure helps investors evaluate and compare our past performance excluding the impact of a non-core business that we have sold. 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. 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). We are unable to reconcile our forward-looking estimate of second quarter 2020 adjusted EBITDA to net (loss) income (its most comparable measure calculated in accordance with GAAP) without unreasonable efforts because a reasonable estimate of income tax (expense) benefit, which is one of the necessary reconciling items for a reconciliation of adjusted EBITDA to net (loss) income, is not yet available at this stage of the quarterly financial results preparation process. With respect to the other items that would be included in the reconciliation of our estimate of adjusted EBITDA to preliminary net (loss) income, as of the date of this press release, we expect the following for the quarter ended June 30, 2020 (all amounts are estimated, approximate and subject to change): interest expense (net) of $31 million, depreciation expense of $13 million, amortization of other intangible assets expense of $17 million, stock-based compensation expense of $10 million, and gain on sale of assets of $(2) million. Fiscal 2020 guidance included in this press release includes forward-looking guidance for adjusted EBITDA and FCF. A reconciliation of FCF guidance to cash flow from operations is included below. We are unable to reconcile our adjusted EBITDA guidance to net (loss) income because certain information necessary for this reconciliation is not available without unreasonable efforts since it is difficult to predict and/or dependent on future events that are outside of our control. In particular, we are unable to provide reasonable predictions of the following reconciling items: income tax expense (benefit), transaction expenses and charges, and impairment of goodwill and other long-lived assets. These items are difficult to predict with a reasonable degree of accuracy because of unanticipated changes in our GAAP effective income tax rate, a primary contributor to net (loss) income; uncertain or unanticipated acquisition costs; and unanticipated charges related to asset impairments. The impact of these items, in the aggregate, could be significant. With respect to the other reconciling items, as of the date of this press release, we expect the following for 2020 (all amounts are estimated, approximate, and subject to change): interest expense (net) of $123 million, depreciation expense of $50 million, amortization expense for other intangible assets of $70 million, and stock-based compensation expense of $38 million, restructuring expense of $2 million and gain on sale of assets of $(2) million. At this time, we do not expect expenses in 2020 for the remaining reconciling items. These forward-looking estimates of reconciling items may differ materially from our actual results and should not be relied upon as statements of fact. 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. Cautionary Note Regarding Preliminary Results Forward-Looking Statements Calculation of Cash Bookings
GAAP to Non-GAAP Reconciliation - Adjusted EBITDA
(1) Interest expense includes impact of amortization of deferred financing costs, original issuance discounts and interest income. GAAP to Non-GAAP Reconciliation of Fiscal Year 2020 Guidance (as of July 14, 2020) - Free Cash Flow The following table reflects the reconciliation of fiscal year 2020 estimated cash flow from operations calculated in accordance with GAAP to fiscal year 2020 guidance for free cash flow. All figures shown are approximate.
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