Web.com Group, Inc. has reported a 45.09 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $3.35 million, or $0.07 a share in the quarter, compared with $6.09 million, or $0.12 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $38.43 million, or $0.76 a share compared with $32.50 million or $0.62 a share, a year ago. Revenue during the quarter surged 39.37 percent to $190.69 million from $136.82 million in the previous year period. Gross margin for the quarter expanded 258 basis points over the previous year period to 69.38 percent. Total expenses were 90.51 percent of quarterly revenues, up from 87.77 percent for the same period last year. That has resulted in a contraction of 274 basis points in operating margin to 9.49 percent.
Operating income for the quarter was $18.09 million, compared with $16.73 million in the previous year period.
However, the adjusted operating income for the quarter stood at $43.92 million compared to $35.32 million in the prior year period. At the same time, adjusted operating margin contracted 278 basis points in the quarter to 23.03 percent from 25.82 percent in the last year period.
"Web.com reported solid third quarter results highlighted by strong profitability and year over year growth in our value added services products. We have made good progress in our integration of Yodle and identified several product integration and go to market adjustments designed to better position the Company for improved performance over time. We believe the changes we are making will have a near term financial impact, but these steps are absolutely the right strategic moves for Web.com," said David L. Brown, chairman, chief executive officer and president of Web.com.
Operating cash flow declines
Web.com Group, Inc. has generated cash of $89.75 million from operating activities during the nine month period, down 20.27 percent or $22.82 million, when compared with the last year period. The company has spent $322.48 million cash to meet investing activities during the nine month period as against cash outgo of $12.49 million in the last year period.
Cash flow from financing activities was $235.88 million for the nine month period as against cash outgo of $104.17 million in the last year period.
Cash and cash equivalents stood at $21.82 million as on Sep. 30, 2016, up 18.62 percent or $3.43 million from $18.39 million on Sep. 30, 2015.
Working capital remains negative
Working capital of Web.com Group, Inc. was negative $206.99 million on Sep. 30, 2016 compared with negative $141.21 million on Sep. 30, 2015. Current ratio was at 0.37 as on Sep. 30, 2016, down from 0.48 on Sep. 30, 2015.
Days sales outstanding were almost stable at 8 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding went up to 24 days for the quarter from 16 for the same period last year.
Debt increases substantially
Web.com Group, Inc. has witnessed an increase in total debt over the last one year. It stood at $685.84 million as on Sep. 30, 2016, up 53.05 percent or $237.71 million from $448.13 million on Sep. 30, 2015. Total debt was 44.39 percent of total assets as on Sep. 30, 2016, compared with 37.53 percent on Sep. 30, 2015. Debt to equity ratio was at 2.88 as on Sep. 30, 2016, up from 2.71 as on Sep. 30, 2015. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
