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Website Pros Reports Fourth Quarter and Full-Year 2007 Financial Results

Company Raises 2008 Full-Year Revenue and Profitability Outlook

JACKSONVILLE, Fla., Feb 12, 2008 (PrimeNewswire via COMTEX News Network) -- Website Pros, Inc. (Nasdaq:WSPI), a leading provider of Web and marketing services for small and medium-sized businesses, today announced results for the fourth quarter ended December 31, 2007 and full-year 2007. The fourth quarter financial results discussed below reflect for the first time the operating results, including merger related costs, of Web.com which was acquired on September 30, 2007.

Summary of Fourth Quarter 2007 Results:

* Total revenue for the fourth quarter of 2007 was a record $30.9 million, an increase of 89% compared to $16.4 million for the fourth quarter of 2006. As a result of fair value adjustments to Web.com's deferred revenue in accordance with generally accepted accounting principles (GAAP) for purchase accounting, Website Pros is unable to recognize approximately $0.4 million of revenue for the fourth quarter that would have been recorded by Web.com as revenue had the acquisition not occurred. Had the company been permitted to recognize this revenue, total revenue would have been $31.3 million.

* GAAP operating loss for the fourth quarter of 2007 was $0.6 million, compared to GAAP operating income of $1.1 million for the fourth quarter of 2006, reflecting an increase in non-cash expenses for amortization of intangibles and stock compensation of $2.5 million, due to the Web.com merger, as compared to the prior year.

* GAAP net loss for the fourth quarter of 2007 was $0.2 million compared to GAAP net income of $4.8 million for the fourth quarter of 2006, reflecting an increase in pre-tax non-cash expenses for amortization of intangibles and stock compensation of $2.5 million and an income tax benefit of $3.2 million in the prior year period. GAAP net loss per diluted share was $0.01 per share for the fourth quarter of 2007 compared to GAAP net income per diluted share of $0.25 per share year-over-year.

* Non-GAAP operating income for the fourth quarter was a record $3.5 million, representing an increase of 57% compared to $2.2 million year-over-year.

* Non-GAAP net income for the fourth quarter was a record $3.8 million, an increase of 38% as compared to $2.7 million year-over-year.

* Non-GAAP net income per diluted share for the fourth quarter was $0.13, compared to $0.14 year-over-year.

"The fourth quarter and year end results were highlighted by the addition of Web.com and continued strong non-GAAP net income, marking the 10th consecutive quarter that operating results have met or exceeded our guidance," stated David Brown, Chairman and CEO of Website Pros. "During the quarter, Website Pros successfully ramped up integration efforts with Web.com, including the exploration of several new revenue-generating and cost savings opportunities. As a result of the progress we made during the fourth quarter, we now expect the merger to be accretive to our non-GAAP diluted earnings per share in the first half of 2008 as opposed to later in the year as we have previously stated. Entering 2008, we continue to feel that we are the market leader, well-positioned to provide small and medium-sized businesses with an array of Web and marketing services designed to enhance their business."

Other Highlights:

* Website Pros' total net subscribers were approximately 263,000 at the end of the fourth quarter, up from approximately 255,000 at the end of the third quarter of 2007 on a combined pro-forma basis.

* Churn was 4.0%, down from 4.1% in the previous quarter on a combined pro-forma basis.

Financial Results for the Full Year 2007

Total revenue for the full year 2007 was $82.5 million, an increase of 59% on a year-over-year basis. Total non-GAAP revenue for the full year 2007 was $83.1 million, including approximately $0.4 million that was written off as a result of fair value adjustments to Web.com's deferred revenue in accordance with GAAP purchase accounting. For the full year 2007, subscription revenue increased 66% to $77.7 million, license revenue decreased 32% to $2.4 million, and professional services revenue increased 44% to $2.4 million, compared to the full year 2006.

For the full year 2007, the Company reported net income, determined in accordance with GAAP, of $1.4 million, down from $8.6 million in the full year 2006. Net income for 2007 and 2006 included:



 (in millions)                                    2007           2006
 ---------------------------------------------------------------------
 Pre-tax non-cash amortization expense            $3.9           $1.0
 ---------------------------------------------------------------------
 Income tax expense (benefit)                     $2.1          ($3.2)
 ---------------------------------------------------------------------
 Pre-tax stock-based compensation expense         $3.6           $2.0
 ---------------------------------------------------------------------

GAAP net income per diluted share was $0.06 for the full year 2007, compared to $0.44 per share in the full year 2006. Per share amounts are based on weighted average fully-diluted shares of 22.2 million and 19.4 million for the full year 2007 and 2006, respectively. Website Pros reported record non-GAAP net income of $11.6 million for the full year 2007, an increase of 37% as compared to $8.5 million for the full year 2006. Non-GAAP net income per diluted share was a record $0.52 for the full year 2007, an increase of 18% from $0.44 for the full year 2006.

Business Outlook

"Website Pros continued to diversify its business in 2007 allowing us to maximize our revenue and earnings capabilities moving forward, and as a result of these efforts, we are raising our 2008 outlook," stated Kevin Carney, Chief Financial Officer of Website Pros. "As we look ahead, we intend to continue to explore new opportunities to drive revenue and earnings from both new and existing customer and partner relationships."



 Full Year 2008                                   Guidance
 --------------------------------------------------------------
 Revenue (in millions) (1)                      $133 - $137
 --------------------------------------------------------------
 Non-GAAP Net Income per diluted share (2)      $0.78 - $0.82
 --------------------------------------------------------------

 (1) Non-GAAP revenue excludes the fair value deferred revenue
     adjustment

 (2) Non-GAAP net income excludes stock-based compensation expense,
     amortization expense related to acquisitions, income tax expense,
     and the fair value deferred revenue adjustment

Conference Call Information

Management will host a conference call to discuss Website Pros' results and other matters related to the Company's business today, February 12, 2008, at 5:00 p.m. (Eastern Time). To access this call, dial 888-213-3934 (domestic) or 913-312-0976 (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 5945125. 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.

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."

About Website Pros

Website Pros, Inc. (Nasdaq:WSPI) is a leading provider of Do-It-For-Me and Do-It-Yourself website building tools, Internet marketing, lead generation and technology solutions that enable small and medium-sized businesses to maintain an effective Internet presence. Website Pros 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 these businesses anywhere along their lifecycles - from those just establishing a Web presence to those requiring more sophisticated online eCommerce sites. For more information on the company, please visit http://www.websitepros.com or http://www.web.com or call 1-800-GETSITE.

Note to Editors: Website Pros and Web.com are registered trademarks of Website Pros, 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. 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.

Forward-Looking Statements

This press release includes certain "forward-looking statements" including, without limitation, statements under the heading "Business Outlook" 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. These statements are sometimes identified by words such as "may," "feel," "intends," "plans," "believes," "estimates" or words of similar meaning. As a result of the ultimate outcome of such risks and uncertainties, Website Pros' actual results could differ materially from those anticipated in these forward-looking statements. 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 the Website Pros and Web.com 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 Website Pros' Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, 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 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.



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


                            Three Months Ended     Twelve Months Ended
                               December 31,            December 31,
                            2007         2006        2007       2006
                         (unaudited) (unaudited) (unaudited)  (audited)
                          ---------    --------   --------    --------
Revenue:
   Subscription            $ 29,670    $ 14,908   $ 77,676    $ 46,789
   License                      342       1,054      2,437       3,585
   Professional services        869         390      2,408       1,667
                           --------    --------   --------    --------
     Total revenue           30,881      16,352     82,521      52,041

 Cost of revenue
  (excluding
  depreciation and
  amortization shown
  separately below):
   Subscription (a)          11,156       6,589     32,381      20,534
   License                       85         285        751         958
   Professional services        351         378      1,299       1,421
                           --------    --------   --------    --------
     Total cost of
      revenue                11,592       7,252     34,431      22,913
                           --------    --------   --------    --------

 Gross profit                19,289       9,100     48,090      29,128

 Operating expenses:
   Sales and
    marketing (a)             6,894       3,730     19,308      12,511
   Research and
    development (a)           2,438         788      5,075       2,256
   General and
    administrative (a)        7,167       2,789     16,513       9,652
   Restructuring charges          1          --        243          --
   Depreciation and
    amortization              3,341         670      5,454       1,712
                           --------    --------   --------    --------
     Total operating
      expenses               19,841       7,977     46,593      26,131
                           --------    --------   --------    --------
 Income(loss) from
  operations                   (552)      1,123      1,497       2,997

 Other income:
   Interest, net                397         513      1,938       2,400
   Other                         --          --         --          --
                           --------    --------   --------    --------
 Income(loss) before
  income taxes                 (155)      1,636      3,435       5,397
 Income tax (expense)
  benefit                       (66)      3,200     (2,077)      3,200
                           --------    --------   --------    --------
 Net income(loss)          $   (221)   $  4,836   $  1,358    $  8,597
                           ========    ========   ========    ========

 Net income(loss) per
  common share
 Basic                     $  (0.01)   $   0.28   $   0.07    $   0.51
                           ========    ========   ========    ========
 Diluted                   $  (0.01)   $   0.25   $   0.06    $   0.44
                           ========    ========   ========    ========
 Weighted-average number
  of shares used in per
  share amounts:
 Basic                       26,428      17,119     19,802      16,778
                           ========    ========   ========    ========
 Diluted                     26,428      19,695     22,224      19,430
                           ========    ========   ========    ========

 (a) Stock based
      compensation
      included above:
     Subscription
      (cost of revenue)    $     76    $     47   $    244    $    137
     Sales and marketing        266         131        774         365
     Research and
      development               104          80        312         222
     General and
      administration            519         408      2,238       1,309
                           --------    --------   --------    --------
 Total                     $    965    $    666   $  3,568    $  2,033
                           ========    ========   ========    ========



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


                                             December 31, December 31,
                                                2007         2006
                                             (unaudited)   (audited)
                                              ---------    ---------
 Assets
 Current assets:

   Cash and cash equivalents                  $  29,746    $  42,155
   Restricted investments                         4,805           --
   Accounts receivable, net of
    allowance $1.0 million and $280
    thousand, respectively                        7,393        4,202
   Inventories, net of reserves of
    $67 and $48, respectively                        26           69
   Prepaid expenses                               4,248          616
   Prepaid marketing fees and other
    current assets                                  964          986
   Deferred taxes                                   552          531
                                              ---------    ---------
 Total current assets                            47,734       48,559

 Restricted investments                           1,675           --
 Property and equipment, net                      7,153        2,337
 Goodwill                                       104,307       31,587
 Intangible assets, net                          69,422        7,590
 Deferred Taxes                                     780        2,669
 Other assets                                       752          618
                                              ---------    ---------
 Total assets                                 $ 231,823    $  93,360
                                              =========    =========

 Liabilities and stockholders' equity
 Current liabilities:

   Accounts payable                           $   2,445    $     920
   Accrued expenses                               8,754        2,884
   Accrued restructuring costs and
    other reserves                               12,994           --
   Deferred revenue                               9,102        4,594
   Accrued marketing fees                           279          378
   Notes payable, current                         1,093           95
   Obligations under capital lease,
    current                                           1           52
   Other long-term liabilities                      294          102
                                              ---------    ---------
 Total current liabilities                       34,962        9,025

 Accrued rent expense                               105          158
 Deferred revenue                                   148           --
 Notes payable, long term                           152          162
 Obligations under capital leases,
  long term                                          --           32
 Other long term liabilities                         25           27
                                              ---------    ---------
 Total liabilities                               35,392        9,404

 Stockholders' equity
 Common stock, $0.001 par value;
  150,000,000 shares authorized at
  December 31, 2007 and December
  31, 2006; 27,472,686 shares and
  17,331,626 shares issued and
  outstanding at December 31, 2007
  and December 31, 2006,
  respectively                                       27           17
 Additional paid-in capital                     254,208      143,101


 Accumulated deficit                            (57,804)     (59,162)
                                              ---------    ---------
 Total stockholders' equity                     196,431       83,956
                                              ---------    ---------
 Total liabilities and
  stockholders' equity                        $ 231,823    $  93,360
                                              =========    =========


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


                            Three Months Ended    Twelve Months Ended
                               December 31,           December 31,
                             2007        2006       2007        2006
                           --------    --------   --------    --------
 Reconciliation of GAAP
  revenue to non-GAAP
  revenue
 GAAP revenue              $ 30,881    $ 16,352   $ 82,521    $ 52,041
 Fair value adjustment to
  deferred revenue              459          --        564          --
                           --------    --------   --------    --------
 Non-GAAP proforma revenue $ 31,340    $ 16,352   $ 83,085    $ 52,041
                           ========    ========   ========    ========

 Reconciliation of GAAP
  net income (loss)
  attributable to common
  stockholders to
  non-GAAP pro forma
  net income
 GAAP Net income (loss)   $   (221)    $  4,836   $  1,358    $  8,597
 Amortization of
  intangibles                2,618          437      3,940       1,031
 Income tax expense             66       (3,200)     2,077      (3,200)
 Cash income tax expense       (97)          --       (189)         --
 Fair value adjustment to
  deferred revenue             459           --        564          --
 Restructuring charges           1           --        243          --
 Stock based compensation      965          666      3,568       2,033
                           --------    --------   --------    --------
 Non-GAAP proforma
  net income              $  3,791     $  2,739   $ 11,561    $  8,461
                           ========    ========   ========    ========

 Reconciliation of GAAP
  basic net income (loss)
  per share to
  non-GAAP pro
  forma net income
  per share
 Basic                    $  (0.01)    $   0.28   $   0.07    $   0.51
 Amortization of
  intangibles per share       0.09         0.03       0.20        0.06
 Income tax expense
  per share                   0.00        (0.19)      0.10       (0.19)
 Cash income tax expense
  per share                  (0.00)          --      (0.01)         --
 Fair value adjustment
  to deferred revenue
  per share                   0.02           --       0.03          --
 Restructuring charges        0.00           --       0.01          --
 Stock based compensation
  per share                   0.04         0.04       0.18        0.12
                           --------    --------   --------    --------
 Non-GAAP pro-forma net
  income per share
 Basic                    $   0.14     $   0.16   $   0.58    $   0.50
                           ========    ========   ========    ========

 Reconciliation of GAAP
  diluted net income
  (loss) per share to
  non-GAAP pro forma net
  income per share
 Fully diluted shares:
 Common stock               26,428       17,119     19,802      16,778
 Diluted stock options       2,936        2,101      1,983       2,349
 Warrants                      206          198        196         233
 Escrow shares                 139          277        243          70
                           --------    --------   --------    --------
   Total                    29,709       19,695     22,224      19,430
                           ========    ========   ========    ========

 GAAP net income (loss)
  per share
 Diluted                  $  (0.01)    $   0.25   $   0.06    $   0.44
 Amortization of
  intangibles per share       0.09         0.02       0.18        0.05
 Income tax expense
  per share                   0.00        (0.16)      0.09       (0.16)
 Cash income tax expense
  per share                  (0.00)          --      (0.01)         --
 Fair value adjustment
  to deferred
  revenue per share           0.02           --       0.03          --
 Restructuring charges        0.00           --       0.01          --
 Stock based compensation
  per share                   0.03         0.03       0.16        0.11
                           --------    --------   --------    --------
 Non-GAAP pro-forma net
  income per share
 Diluted                   $   0.13    $   0.14   $   0.52    $   0.44
                           ========    ========   ========    ========

 Reconciliation of GAAP
  operating income (loss)
  to non-GAAP pro forma
  operating income
 GAAP operating income
  (loss)                  $   (552)    $  1,123   $  1,497    $  2,997
 Amortization of
  intangibles                2,618          437      3,940       1,031
 Fair value adjustment to
  deferred revenue             459           --        564          --
 Restructuring charges           1           --        243          --
 Stock based compensation      965          666      3,568       2,033
                           --------    --------   --------    --------
 Non-GAAP proforma
  operating income        $  3,491     $  2,226   $  9,812    $  6,061
                           ========    ========   ========    ========

 Reconciliation of GAAP
  operating margin to
  non-GAAP pro forma
  operating margin
 GAAP operating margin          -2%           7%         2%          6%
 Amortization of
  intangibles                    8%           3%         5%          2%
 Fair value adjustment to
  deferred revenue               1%           0%         1%          0%
 Restructuring charges           0%           0%         0%          0%
 Stock based compensation        4%           4%         4%          4%
                           --------    --------   --------    --------
 Non-GAAP proforma
  operating margin              11%          14%        12%         12%
                           ========    ========   ========    ========


                          Website, Pros, Inc.
                 Consolidated Statement of Cash Flows
                            (in thousands)


                                               Twelve Months Ended
                                                   December 31,
                                                2007         2006
                                             (unaudited)   (audited)
                                              ---------    ---------
 Cash flows from operating
  activities
 Net income                                   $   1,358    $   8,597
 Adjustments to reconcile net income
  to net cash provided by operating
  activities:
 Depreciation and amortization                    5,454        1,712
 Stock-based compensation expense                 3,568        2,033
 Restructuring costs                                243           --
 Deferred income tax                              1,868       (3,200)
 Changes in operating assets and
  liabilities:
   Accounts receivable                              517       (1,833)
   Inventories                                       43           69
   Prepaid expenses and other assets                484         (120)
   Accounts payable, accrued
    expenses and other liabilities               (3,514)        (673)
   Deferred revenue                                 261         (115)
                                              ---------    ---------
 Net cash provided by operating
  activities                                     10,282        6,470

 Cash flows from investing
  activities
 Business acquisition, net of
  cash received                                 (18,380)     (20,449)
 Change in restricted investments                   263           --
 Purchase of property and equipment              (3,807)      (1,521)
 Investment in intangible assets                 (2,109)          --
                                              ---------    ---------
 Net cash (used in) investing
  activities                                    (24,033)     (21,970)

 Cash flows from financing
  activities
 Proceeds from issuance of common
  stock, net                                         --        1,018
 Payment of debt obligations                     (1,437)         (49)
 Proceeds from exercise of stock
  options                                         2,779          940
                                              ---------    ---------
 Net cash provided by financing
  activities                                      1,342        1,909
                                              ---------    ---------

 Net decrease in cash and cash
  equivalents                                   (12,409)     (13,591)
 Cash and cash equivalents,
  beginning of period                            42,155       55,746
                                              ---------    ---------
 Cash and cash equivalents,
  end of period                               $  29,746    $  42,155
                                              =========    =========

 Supplemental cash flow information:
   Interest paid                              $      19    $      11
                                              =========    =========
   Income tax paid                            $     233    $      --
                                              =========    =========
 Supplemental disclosure of
  non-cash transactions:
   Issuance of equity in connection
    with acquisitions                         $ 104,754    $   3,013
                                              =========    =========

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

SOURCE: Website Pros, Inc.

Website Pros, Inc.
          Peter Delgrosso
          904-680-6696
          pdelgrosso@corp.web.com

(C) Copyright 2008 PrimeNewswire, Inc. All rights reserved.

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