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Website Pros Reports Second Quarter 2007 Financial Results

JACKSONVILLE, Fla., Aug 1, 2007 (PrimeNewswire via COMTEX News Network) --

Website Pros, Inc. (Nasdaq:WSPI), a leading provider of website technology, services and Internet solutions for small and medium-sized businesses (SMBs), today announced results of operations for the quarter ended June 30, 2007.

David Brown, President and CEO of Website Pros, stated, "We were pleased with the company's financial performance in the second quarter, which was highlighted by revenue and profitability that were at the high-end of our guidance. During the second quarter, we saw a continued re-acceleration in the momentum of our web services offerings, as reflected by its number of net new subscribers increasing by over 100% sequentially. We expect to continue making incremental progress, building on the improvements of the past 9 months, and we are confident that our web services business is back on track to delivering consistent, solid growth that has been a hallmark of our company for many years."

Brown added, "In addition to delivering solid operating performance in the second quarter, we are very excited to move forward with the closing of our pending acquisition of Web.com. Our combined company unites two leaders in the web services industry to create a single company with much greater critical mass, web offerings that can meet the do-it-for-me and do-it-yourself needs of all small and medium-sized businesses, a very large customer base and state-of-the-art, patented technology. We believe that SMBs are still in the early stages of adopting state-of-the-art solutions to build and optimize their Internet presence, and our combined organization will be very well-positioned to capitalize on this opportunity."

Financial Results for the Second Quarter of 2007

Total revenue for the second quarter of 2007 was $17.4 million, an increase of 45% on a year-over-year basis. For the second quarter of 2007, subscription revenue increased 51% to $16.0 million, professional services revenue increased 33% to $668 thousand, and license revenue decreased 23% to $684 thousand, compared to the second quarter of 2006.

For the second quarter of 2007, the company reported net income available to common stockholders, determined in accordance with generally accepted accounting principles (GAAP), of $551 thousand, compared to $1.4 million in the second quarter of 2006. Fully diluted GAAP earnings per share were $0.03 for the second quarter of 2007, compared to $0.07 per share in the second quarter of 2006. Of note, during the second quarter of 2007, the company recorded an income tax provision of $504 thousand, or $0.03 per fully diluted share, whereas it did not recognize a tax expense in the prior year period.

Non-GAAP Financial Results for the Second Quarter of 2007

Website Pros reported non-GAAP net income of $2.4 million for the second quarter of 2007, an increase of 26% as compared to $1.9 million in the second quarter of 2006. Non-GAAP diluted net income per share was $0.12 for the second quarter of 2007, an increase of 20% from $0.10 in the second quarter of 2006.

All per share numbers for non-GAAP net income per share are expressed on a weighted average diluted per share basis. Non-GAAP net income excludes stock-based compensation expense, amortization expense related to acquisitions, income tax expense, and includes an estimated cash tax rate to be paid during 2007. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in the press release. An explanation of these measures is also included below under the heading "Use of Non-GAAP Financial Measures."

Other Highlights


 * Total net subscribers at the end of the second quarter were
   approximately 80,700, an increase from approximately 76,700 at the
   end of the first quarter of 2007. Total net subscribers include the
   company's Web services, LEADS.com, RenovationExperts.com,
   1ShoppingCart.com and Submitawebsite offerings.

 * Monthly customer turnover was 4.8%, down from 5.3% in the previous
   quarter, based on the subscriber and related churn levels from the
   company's Web services, LEADS.com, RenovationExperts.com,
   1ShoppingCart.com and Submitawebsite offerings.

 * Website Pros signed a definitive merger agreement with Web.com, to
   create a comprehensive web services company focused on the SMB market
   with over $121 million annualized revenue run-rate and over 238,000
   paid subscribers. Both figures are based on the most recently published
   financial information, which is as of June 30, 2007 for Website Pros
   and March 31, 2007 for Web.com.

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. Website Pros believes presenting non-GAAP net income attributable to common stockholders and non-GAAP net income per share attributable to common stockholders and non-GAAP operating margin is useful to investors, because it describes the operating performance of the company and helps investors gauge the company's ability to generate cash flow, excluding some recurring charges that are included in the most directly comparable measures calculated and presented in accordance with GAAP. Company management uses these non-GAAP measures as important indicators of the company's past performance and to plan and forecast performance in future periods. The non-GAAP financial information Website Pros 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.

Conference Call Information

Management will host a conference call to discuss the company's results and other matters related to the company's business today, August 1, 2007, at 5:00 pm Eastern Time. To access this call, dial 800-289-0529 (domestic) or 913-981-5523 (international). A replay of this conference call will be available for a limited time at 888-203-1112 (domestic) or 719-457-0820 (international). The replay passcode is 9714875. A webcast of this conference call will also be available for a limited time on the "Investor Relations" page of the Company's Web site, www.websitepros.com

About Website Pros

Website Pros, Inc. (Nasdaq:WSPI) is a leading provider of Do-It-For-Me website building tools, Internet marketing, lead generation and technology solutions that enable businesses to maintain an effective Internet presence. The company offers a full range of Web services, including website design and publishing, Internet marketing and advertising, search engine optimization, lead generation, home contractor specific leads, and shopping cart solutions meeting the needs of a business anywhere along its lifecycle - from those just establishing a Web presence to more sophisticated online eCommerce sites. For more information on the company, please visit http://www.websitepros.com or call 1-800-GETSITE.

Note to Editors: Website Pros is a registered trademark of Website Pros, Inc.

Forward-Looking Statements

This press release includes certain "forward-looking statements" 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 press release that are not historical facts and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" or words of similar meaning. Our actual results could differ materially from those anticipated in these forward-looking statements upon completion of the review of our second quarter results by our independent registered public accounting firm. 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 maintain our sales efficiency, our ability to maintain our existing, and develop new, strategic relationships, the number of our net subscriber additions, our monthly customer turnover and our ability to successfully integrate recently acquired businesses and operations and those risks set forth under the caption "Risk Factors" in Website Pros' Annual Report on Form 10-K for the year ended December 31, 2006, as filed with the Securities and Exchange Commission. These filings are available on a Website maintained by the Securities and Exchange Commission at www.sec.gov. Website Pros does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.



                          Website Pros, Inc.
                 Consolidated Statements of Operations
                 (in thousands except per share data)
                              (unaudited)

                                 Three Months Ended   Six Months Ended
                                       June 30,            June 30,
                                 -----------------   -----------------
                                   2007      2006      2007      2006
                                 -------   -------   -------   -------
 Revenue:
  Subscription                   $16,049   $10,650   $31,187   $20,609
  License                            684       884     1,712     2,089
  Professional services              668       503       926       952
                                 -------   -------   -------   -------
   Total revenue                  17,401    12,037    33,825    23,650

 Cost of revenue (excluding
  depreciation and amortization
  shown separately below):
   Subscription (a)                7,286     4,669    14,101     9,087
   License                           179       191       477       482
   Professional services             299       330       600       710
                                 -------   -------   -------   -------
    Total cost of revenue          7,764     5,190    15,178    10,279
                                 -------   -------   -------   -------

 Gross profit                      9,637     6,847    18,647    13,371

 Operating expenses:
  Sales and marketing (a)          4,265     2,971     8,212     5,810
  Research and development (a)       944       441     1,722       989
  General and administrative (a)   3,169     2,373     6,077     4,668
  Depreciation and amortization      714       331     1,395       703
                                 -------   -------   -------   -------
   Total operating expenses        9,092     6,116    17,406    12,170
                                 -------   -------   -------   -------
 Income from operations              545       731     1,241     1,201

 Other income (expense):
  Interest, net                      510       626     1,011     1,177
  Other                               --        --        --        --
                                 -------   -------   -------   -------
 Income before income taxes        1,055     1,357     2,252     2,378
 Income tax expense                 (504)       --    (1,070)       --
                                 -------   -------   -------   -------
 Net income                      $   551   $ 1,357   $ 1,182   $ 2,378
                                 =======   =======   =======   =======

 Net income per common share
   Basic                         $  0.03   $  0.08   $  0.07   $  0.14
                                 =======   =======   =======   =======
   Diluted                       $  0.03   $  0.07   $  0.06   $  0.12
                                 =======   =======   =======   =======
 Weighted-average number of
  shares used in per share
  amounts:
   Basic                          17,475    16,613    17,407    16,570
                                 =======   =======   =======   =======
   Diluted                        19,705    19,332    19,684    19,339
                                 =======   =======   =======   =======
 (a) Stock based compensation
      included above:
       Subscription (cost of
        revenue)                 $    69   $    32   $   111   $    57
                                 =======   =======   =======   =======
     Sales and marketing         $   224   $    74   $   333   $   146
     Research and development         81        33       140        88
     General and administration      518       273     1,100       516
                                 -------   -------   -------   -------
 Total                           $   823   $   380   $ 1,573   $   750
                                 =======   =======   =======   =======


                          Website, Pros, Inc.
                      Consolidated Balance Sheets
                 (in thousands except per share data)

                                                June 30,   December 31,
                                                  2007        2006
                                                --------    --------
 Assets
 Current assets:
  Cash and cash equivalents                     $ 44,249    $ 42,155
  Accounts receivable, net of allowance
   $389 and $280, respectively                     4,798       4,202
  Inventories net of reserves of
   $59 and $48, respectively                          26          69
  Prepaid expenses                                   650         616
  Prepaid marketing fees and other
   current assets                                    959         986
  Deferred taxes                                     531         531
                                                --------    --------
 Total current assets                             51,213      48,559

 Property and equipment net                        2,222       2,337
 Goodwill                                         34,311      31,587
 Intangible assets, net                            7,226       7,590
 Other assets                                      1,300         618
 Non-current deferred taxes                        1,720       2,669
                                                --------    --------
 Total assets                                   $ 97,992    $ 93,360
                                                ========    ========
 Liabilities and stockholders' equity
  Current liabilities:
   Accounts payable                             $    630    $    920
   Accrued expenses                                2,435       2,581
   Deferred revenue                                5,769       4,594
   Accrued marketing fees                            611         681
   Notes payable, current                             91          95
   Obligations under capital lease, current           --          52
   Other liabilities                                 145         102
                                                --------    --------
 Total current liabilities                         9,681       9,025

 Accrued rent expense                                147         158
 Notes payable, long term                            116         162
 Obligations under capital leases, long term          --          32
 Other long term liabilities                          27          27
                                                --------    --------
 Total liabilities                                 9,971       9,404

 Stockholders' equity
  Common stock, $0.001 par value;
   150,000,000 shares authorized at June 30, 2007
   and December 31,2006; 17,681,681 shares and
   17,331,626 shares issued and outstanding at
   June 30, 2007 and December 31,
   2006, respectively                                 18          17
 Additional paid-in capital                      145,982     143,101
 Accumulated deficit                             (57,979)    (59,162)
                                                --------    --------
 Total stockholders' equity                       88,021      83,956
                                                --------    --------
 Total liabilities and stockholders' equity     $ 97,992    $ 93,360
                                                ========    ========


                          Website, Pros, Inc.
              Reconciliation of GAAP to Pro Forma Results
                 (in thousands except per share data)
                              (unaudited)

                                 Three Months Ended   Six Months Ended
                                       June 30,            June 30,
                                 -----------------   -----------------
                                   2007      2006      2007      2006
                                 -------   -------   -------   -------
 Reconciliation of GAAP net
  income attributable to common
  stock  holders to non-GAAP pro
  forma net income
   GAAP Net income               $   551   $ 1,357   $ 1,182   $ 2,378
   Amortization of intangibles       452       176       874       418
   Income tax expense                504        --     1,070        --
   Cash income tax expense           (27)       --       (54)       --
   Fair value adjustment to
    deferred revenue                  73        --        73        --
   Stock based compensation          892       412     1,684       807
                                 -------   -------   -------   -------
 Non-GAAP proforma net income    $ 2,445   $ 1,945   $ 4,829   $ 3,603
                                 =======   =======   =======   =======
 Reconciliation of GAAP basic net
  income per share to non-GAAP pro
  forma net income per share
   Basic                         $  0.03   $  0.08   $  0.07   $  0.14
   Amortization of intangibles
    per share                       0.03      0.02      0.05      0.03
   Income tax expense per share     0.03        --      0.06        --
   Cash income tax expense per
    share                          (0.00)       --     (0.00)       --
   Fair value adjustment to
    deferred revenue per share      0.00        --      0.00        --
   Stock based compensation
    per share                       0.05      0.02      0.10      0.05
                                 -------   -------   -------   -------
   Non-GAAP pro-forma net income
    per share
     Basic                       $  0.14   $  0.12   $  0.28   $  0.22
                                 =======   =======   =======   =======

 Reconciliation of GAAP diluted
  net income per share to non-GAAP
  pro forma net income per share

 Fully diluted shares:
  Common stock                    17,475    16,613    17,407    16,570
  Diluted stock options            1,761     2,469     1,808     2,503
  Warrants                           192       250       192       266
  Escrow shares                      277        --       277        --
                                 -------   -------   -------   -------
     Total                        19,705    19,332    19,684    19,339
                                 =======   =======   =======   =======
 GAAP net income per share
  Diluted                        $  0.03   $  0.07   $  0.06   $  0.12
  Amortization of intangibles
   per share                        0.02      0.01      0.04      0.03
  Income tax expense per share      0.03        --      0.06        --
  Cash income tax expense
   per share                       (0.00)       --     (0.00)       --
 Fair value adjustment to
  deferred revenue per share        0.00        --      0.00        --
 Stock based compensation
  per share                         0.04      0.02      0.09      0.04
                                 -------   -------   -------   -------
 Non-GAAP pro-forma net income
  per share
   Diluted                       $  0.12   $  0.10   $  0.25   $  0.19
                                 =======   =======   =======   =======
 Reconciliation of GAAP operating
  income to non-GAAP pro forma
  operating income
   GAAP operating income         $   545   $   731   $ 1,241   $ 1,201
   Amortization of intangibles       452       176       874       418
   Fair value adjustment to
    deferred revenue                  73        --        73        --
   Stock based compensation          892       412     1,684       807
                                 -------   -------   -------   -------
 Non-GAAP proforma
  operating income               $ 1,962   $ 1,319   $ 3,872   $ 2,426
                                 =======   =======   =======   =======
 Reconciliation of GAAP operating
  margin to non-GAAP pro forma
  operating margin
   GAAP operating margin               3%        6%        4%        5%
   Amortization of intangibles         3%        2%        2%        2%
   Fair value adjustment to
    deferred revenue                   0%        0%        0%        0%
   Stock based compensation            5%        3%        5%        3%
                                 -------   -------   -------   -------
 Non-GAAP proforma operating
  margin                              11%       11%       11%       10%
                                 =======   =======   =======   =======


                          Website, Pros, Inc.
                 Consolidated Statement of Cash Flows
                            (in thousands)
                              (unaudited)
                                                   Six Months Ended
                                                       June 30,
                                                   2007        2006
                                                 -------     -------
 Cash flows from operating activities
 Net income                                      $ 1,182     $ 2,378
 Adjustments to reconcile net income
  to net cash provided by operating activities:
 Depreciation and amortization                     1,395         703
 Stock-based compensation expense                  1,684         807
 Deferred income tax                                 950          --
 Changes in operating assets and liabilities:
  Accounts receivable                               (143)       (147)
  Inventories                                         43          18
  Prepaid expenses and other assets                  (97)        (98)
  Accounts payable, accrued expenses and
   other liabilities                                (875)       (754)
  Deferred revenue                                   420          27
                                                 -------     -------
 Net cash provided by operating activities         4,559       2,934

 Cash flows from investing activities
 Business acquisition, net of cash received       (2,811)         --
 Purchase of property and equipment                 (615)       (922)
 Investment in intangible assets                    (100)         --
                                                 -------     -------
 Net cash used in investing activities            (3,526)       (922)

 Cash flows from financing activities
 Stock issuance costs                                 --        (877)
 Payment of debt obligations                        (136)        (32)
 Proceeds from exercise of stock options           1,197         153
                                                 -------     -------
 Net cash provided by (used in)
  financing activities                             1,061        (756)
                                                 -------     -------

 Net increase in cash and cash equivalents         2,094       1,256
 Cash and cash equivalents, beginning of period   42,155      55,746
                                                 -------     -------
 Cash and cash equivalents, end of period        $44,249     $57,002
                                                 =======     =======

 Supplemental cash flow information:
  Interest paid                                  $     9     $    --
                                                 =======     =======
  Income tax paid                                $    80     $    --
                                                 =======     =======

This news release was distributed by PrimeNewswire, www.primenewswire.com

SOURCE: Website Pros Inc.

Website Pros, Inc.
          MEDIA:
          Roseann Duran
          904-680-6976
          rduran@websitepros.com

          ICR
          INVESTORS:
          Kori Doherty
          617-956-6730
          kdoherty@icrinc.com

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