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Website Pros Inc. Reports Operating Results (10-Q)

May 06, 2010 | About:
10qk

10qk

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Website Pros Inc. (WWWW) filed Quarterly Report for the period ended 2010-03-31.

Website Pros Inc. has a market cap of $117.2 million; its shares were traded at around $4.61 with a P/E ratio of 9.2 and P/S ratio of 1.1. Website Pros Inc. had an annual average earning growth of 43.3% over the past 5 years.WWWW is in the portfolios of Jim Simons of Renaissance Technologies LLC, George Soros of Soros Fund Management LLC.

Highlight of Business Operations:

Subscription Revenue. Subscription revenue decreased 6% to $24.5 million in the three months ended March 31, 2010 from $26.0 million in the three months ended March 31, 2009. Subscription revenue decreased approximately $3.9 million primarily due to decreases in our average revenue per subscriber as compared to the prior year, which was slightly offset by additional subscription revenue of $1.3 million and approximately $900 thousand from our recent acquisitions and increases in average customers, respectively. The decrease in average revenue per subscriber was mainly due to the addition of lower revenue subscribers from our Do-It-Yourself website building and hosting products as well as a reduction in spending by our enterprise partner subscribers.

Professional Services Revenue. Professional services revenue increased 17% to $648 thousand in the three months ended March 31, 2010 from $553 thousand in the three months ended March 31, 2009. Professional services revenue increased approximately $356 thousand due to the additional service offerings of eCommerce store design that was recently acquired, which was offset by a decrease of $139 thousand and $101 thousand in search engine optimization services and custom design services, respectively.

General and Administrative Expenses. General and administrative expenses decreased 38% to $3.8 million, or 15% of total revenue, during the three months ended March 31, 2010 from $6.1 million, or 22% of total revenue, during the three months ended March 31, 2009. During the three months ended March 31, 2010, we had reductions in employee compensation and legal expense by $1.3 million and $873 thousand, respectively. The reduction in legal fees was primarily associated with the sale of a perpetual license during the three months ended March 31, 2009. In addition, general and administrative expenses were reduced by reserve adjustments of $163 thousand that the Company determined are no longer probable due to the expiration of the respective statute of limitations of the likely jurisdictions. During the three months ended March 31, 2010, we had increases of general and administrative expenses of $352 thousand associated with our recent acquisitions.

As of March 31, 2010, we had $39.5 million of unrestricted cash and cash equivalents and $33.8 million in working capital, as compared to $39.4 million of cash and cash equivalents and $32.2 million in working capital as of December 31, 2009.

Net cash used in investing activities in the three months ended March 31, 2010 was $1.8 million as compared to the net cash used in investing activities during the three months ended March 31, 2009 of $244 thousand. During the three months ended March 31, 2010, we acquired approximately 5,700 customers at a cost of $1.5 million, which included a $91 thousand liability for future service to be provided to the acquired customers. In addition, we invested $384 thousand in property and equipment. During the three months ended March 31, 2009, the Company invested approximately $244 thousand in property and equipment and intangible assets.

Net cash used in financing activities in the three months ended March 31, 2010 was $46 thousand as compared to the net cash used in financing activities during the three months ended March 31, 2009 of $2.7 million. During the three months ended March 31, 2010, we received proceeds from the exercise of stock options of $76 thousand, paid $66 thousand to satisfy debt obligations, and purchased 11,134 shares of common stock for $53 thousand for required tax withholding upon the vesting of restricted shares. These shares were not repurchased under the

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10qk
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