|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
46-3044956
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
10 Corporate Drive, Suite 300
Burlington, Massachusetts
|
|
01803
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
|
☒
|
Non-accelerated filer
|
☐ (Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
☐
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
|
Page
|
PART I. FINANCIAL INFORMATION
|
|
Item 1. Financial Statements (unaudited)
|
|
|
|
|
December 31, 2016
|
|
June 30, 2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
53,596
|
|
|
$
|
81,409
|
|
Restricted cash
|
3,302
|
|
|
3,401
|
|
||
Accounts receivable
|
13,088
|
|
|
11,664
|
|
||
Prepaid domain name registry fees
|
55,444
|
|
|
56,710
|
|
||
Prepaid expenses and other current assets
|
28,678
|
|
|
28,844
|
|
||
Total current assets
|
154,108
|
|
|
182,028
|
|
||
Property and equipment—net
|
95,272
|
|
|
94,625
|
|
||
Goodwill
|
1,859,909
|
|
|
1,861,608
|
|
||
Other intangible assets—net
|
612,057
|
|
|
544,990
|
|
||
Deferred financing costs
|
4,932
|
|
|
4,089
|
|
||
Investments
|
15,857
|
|
|
15,846
|
|
||
Prepaid domain name registry fees, net of current portion
|
10,429
|
|
|
10,789
|
|
||
Other assets
|
3,710
|
|
|
2,504
|
|
||
Total assets
|
$
|
2,756,274
|
|
|
$
|
2,716,479
|
|
Liabilities, redeemable non-controlling interest and stockholders’ equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
16,074
|
|
|
$
|
12,841
|
|
Accrued expenses
|
67,722
|
|
|
75,088
|
|
||
Accrued interest
|
27,246
|
|
|
20,088
|
|
||
Deferred revenue
|
355,190
|
|
|
369,825
|
|
||
Current portion of notes payable
|
35,700
|
|
|
33,945
|
|
||
Current portion of capital lease obligations
|
6,690
|
|
|
4,481
|
|
||
Deferred consideration—short term
|
5,273
|
|
|
4,250
|
|
||
Other current liabilities
|
2,890
|
|
|
2,947
|
|
||
Total current liabilities
|
516,785
|
|
|
523,465
|
|
||
Long-term deferred revenue
|
89,200
|
|
|
91,256
|
|
||
Notes payable—long term, net of original issue discounts of $25,853 and $27,939 and deferred financing costs of $43,342 and $40,622, respectively
|
1,951,280
|
|
|
1,936,258
|
|
||
Capital lease obligations—long term
|
512
|
|
|
1,537
|
|
||
Deferred tax liability
|
39,943
|
|
|
44,060
|
|
||
Deferred consideration—long term
|
7,444
|
|
|
3,437
|
|
||
Other liabilities
|
8,974
|
|
|
9,862
|
|
||
Total liabilities
|
2,614,138
|
|
|
2,609,875
|
|
||
Redeemable non-controlling interest
|
17,753
|
|
|
25,000
|
|
||
Commitments and contingencies (Note 17)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred Stock—par value $0.0001; 5,000,000 shares authorized; no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common Stock—par value $0.0001; 500,000,000 shares authorized; 134,793,857 and 137,503,270 shares issued at December 31, 2016 and June 30, 2017, respectively; 134,793,857 and 137,503,270 outstanding at December 31, 2016 and June 30, 2017, respectively
|
14
|
|
|
14
|
|
||
Additional paid-in capital
|
868,228
|
|
|
898,445
|
|
||
Accumulated other comprehensive loss
|
(3,666
|
)
|
|
(2,144
|
)
|
||
Accumulated deficit
|
(740,193
|
)
|
|
(814,711
|
)
|
||
Total stockholders’ equity
|
124,383
|
|
|
81,604
|
|
||
Total liabilities, redeemable non-controlling interest and stockholders’ equity
|
$
|
2,756,274
|
|
|
$
|
2,716,479
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Revenue
|
$
|
290,713
|
|
|
$
|
292,258
|
|
|
$
|
527,826
|
|
|
$
|
587,395
|
|
Cost of revenue
|
153,077
|
|
|
146,583
|
|
|
289,553
|
|
|
295,332
|
|
||||
Gross profit
|
137,636
|
|
|
145,675
|
|
|
238,273
|
|
|
292,063
|
|
||||
Operating expense:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
80,309
|
|
|
72,106
|
|
|
159,603
|
|
|
144,878
|
|
||||
Engineering and development
|
27,687
|
|
|
20,149
|
|
|
43,942
|
|
|
40,511
|
|
||||
General and administrative
|
34,830
|
|
|
40,580
|
|
|
75,109
|
|
|
79,660
|
|
||||
Transactions expenses
|
978
|
|
|
193
|
|
|
32,098
|
|
|
773
|
|
||||
Total operating expense
|
143,804
|
|
|
133,028
|
|
|
310,752
|
|
|
265,822
|
|
||||
Income (loss) from operations
|
(6,168
|
)
|
|
12,647
|
|
|
(72,479
|
)
|
|
26,241
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Other income
|
—
|
|
|
—
|
|
|
11,410
|
|
|
—
|
|
||||
Interest income
|
142
|
|
|
185
|
|
|
276
|
|
|
303
|
|
||||
Interest expense
|
(40,994
|
)
|
|
(45,658
|
)
|
|
(71,365
|
)
|
|
(85,174
|
)
|
||||
Total other expense—net
|
(40,852
|
)
|
|
(45,473
|
)
|
|
(59,679
|
)
|
|
(84,871
|
)
|
||||
Loss before income taxes and equity earnings of unconsolidated entities
|
(47,020
|
)
|
|
(32,826
|
)
|
|
(132,158
|
)
|
|
(58,630
|
)
|
||||
Income tax expense (benefit)
|
(13,931
|
)
|
|
2,628
|
|
|
(113,833
|
)
|
|
8,402
|
|
||||
Loss before equity earnings of unconsolidated entities
|
(33,089
|
)
|
|
(35,454
|
)
|
|
(18,325
|
)
|
|
(67,032
|
)
|
||||
Equity loss (income) of unconsolidated entities, net of tax
|
341
|
|
|
(39
|
)
|
|
1,024
|
|
|
(39
|
)
|
||||
Net loss
|
$
|
(33,430
|
)
|
|
$
|
(35,415
|
)
|
|
$
|
(19,349
|
)
|
|
$
|
(66,993
|
)
|
Net (loss) income attributable to non-controlling interest
|
(5,390
|
)
|
|
51
|
|
|
(13,120
|
)
|
|
277
|
|
||||
Excess accretion of non-controlling interest
|
—
|
|
|
3,663
|
|
|
—
|
|
|
7,247
|
|
||||
Total net (loss) income attributable to non-controlling interest
|
(5,390
|
)
|
|
3,714
|
|
|
(13,120
|
)
|
|
7,524
|
|
||||
Net loss attributable to Endurance International Group Holdings, Inc.
|
$
|
(28,040
|
)
|
|
$
|
(39,129
|
)
|
|
$
|
(6,229
|
)
|
|
$
|
(74,517
|
)
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
540
|
|
|
1,228
|
|
|
882
|
|
|
1,914
|
|
||||
Unrealized loss on cash flow hedge, net of taxes of $(218) and $(192), and $(824) and $(230) for the three and six months ended June 30, 2016 and 2017, respectively
|
(427
|
)
|
|
(176
|
)
|
|
(1,938
|
)
|
|
(392
|
)
|
||||
Total comprehensive loss
|
$
|
(27,927
|
)
|
|
$
|
(38,077
|
)
|
|
$
|
(7,285
|
)
|
|
$
|
(72,995
|
)
|
Basic net loss per share attributable to Endurance International Group Holdings Inc.
|
$
|
(0.21
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.55
|
)
|
Diluted net loss per share attributable to Endurance International Group Holdings Inc.
|
$
|
(0.21
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.55
|
)
|
Weighted-average common shares used in computing net loss per share attributable to Endurance International Group Holdings, Inc.:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
132,566,622
|
|
|
137,295,120
|
|
|
132,736,382
|
|
|
136,124,347
|
|
||||
Diluted
|
132,566,622
|
|
|
137,295,120
|
|
|
132,736,382
|
|
|
136,124,347
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(19,349
|
)
|
|
$
|
(66,993
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation of property and equipment
|
|
29,932
|
|
|
27,162
|
|
||
Amortization of other intangible assets
|
|
67,697
|
|
|
69,207
|
|
||
Impairment of long lived assets
|
|
8,285
|
|
|
—
|
|
||
Amortization of deferred financing costs
|
|
2,562
|
|
|
3,530
|
|
||
Amortization of net present value of deferred consideration
|
|
1,582
|
|
|
377
|
|
||
Dividend from minority interest
|
|
50
|
|
|
50
|
|
||
Amortization of original issue discounts
|
|
1,272
|
|
|
1,732
|
|
||
Stock-based compensation
|
|
33,412
|
|
|
29,169
|
|
||
Deferred tax (benefit) expense
|
|
(117,462
|
)
|
|
4,346
|
|
||
(Gain) loss on sale of assets
|
|
(225
|
)
|
|
(128
|
)
|
||
(Gain) loss from unconsolidated entities
|
|
(10,386
|
)
|
|
(39
|
)
|
||
Financing costs expensed
|
|
—
|
|
|
5,487
|
|
||
Loss on early extinguishment of debt
|
|
—
|
|
|
992
|
|
||
(Gain) loss from change in deferred consideration
|
|
21
|
|
|
—
|
|
||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
||||
Accounts receivable
|
|
1,546
|
|
|
1,359
|
|
||
Prepaid expenses and other current assets
|
|
(14,886
|
)
|
|
(1,343
|
)
|
||
Accounts payable and accrued expenses
|
|
26,517
|
|
|
(9,004
|
)
|
||
Deferred revenue
|
|
55,047
|
|
|
16,518
|
|
||
Net cash provided by operating activities
|
|
65,615
|
|
|
82,422
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Businesses acquired in purchase transactions, net of cash acquired
|
|
(899,889
|
)
|
|
—
|
|
||
Cash paid for minority investment
|
|
(5,600
|
)
|
|
—
|
|
||
Purchases of property and equipment
|
|
(20,961
|
)
|
|
(19,295
|
)
|
||
Proceeds from sale of assets
|
|
252
|
|
|
287
|
|
||
Purchases of intangible assets
|
|
(27
|
)
|
|
(1,680
|
)
|
||
Withdrawals of principal balances in restricted cash accounts
|
|
(768
|
)
|
|
(100
|
)
|
||
Net cash used in investing activities
|
|
(926,993
|
)
|
|
(20,788
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds from issuance of term loan and notes, net of original issue discounts
|
|
1,056,178
|
|
|
1,693,007
|
|
||
Repayments of term loans
|
|
(33,850
|
)
|
|
(1,714,661
|
)
|
||
Proceeds from borrowing of revolver
|
|
16,000
|
|
|
—
|
|
||
Repayment of revolver
|
|
(83,000
|
)
|
|
—
|
|
||
Payment of financing costs
|
|
(51,727
|
)
|
|
(6,060
|
)
|
||
Payment of deferred consideration
|
|
(707
|
)
|
|
(5,408
|
)
|
||
Principal payments on capital lease obligations
|
|
(2,896
|
)
|
|
(3,908
|
)
|
||
Capital investment from minority partner
|
|
1,000
|
|
|
—
|
|
||
Proceeds from exercise of stock options
|
|
1,328
|
|
|
1,132
|
|
||
Net cash provided by (used in) financing activities
|
|
902,326
|
|
|
(35,898
|
)
|
||
Net effect of exchange rate on cash and cash equivalents
|
|
1,614
|
|
|
2,077
|
|
||
Net increase in cash and cash equivalents
|
|
42,562
|
|
|
27,813
|
|
||
Cash and cash equivalents:
|
|
|
|
|
||||
Beginning of period
|
|
33,030
|
|
|
53,596
|
|
||
End of period
|
|
$
|
75,592
|
|
|
$
|
81,409
|
|
Supplemental cash flow information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
44,171
|
|
|
$
|
80,122
|
|
Income taxes paid
|
|
$
|
2,448
|
|
|
$
|
2,459
|
|
Building
|
|
Thirty-five years
|
Software
|
|
Two to three years
|
Computers and office equipment
|
|
Three years
|
Furniture and fixtures
|
|
Five years
|
Leasehold improvements
|
|
Shorter of useful life or remaining term of the lease
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(unaudited)
(in thousands, except share amounts and per share data)
|
||||||||||||||
Net income (loss) attributable to Endurance International Group Holdings, Inc.
|
$
|
(28,040
|
)
|
|
$
|
(39,129
|
)
|
|
$
|
(6,229
|
)
|
|
$
|
(74,517
|
)
|
Net loss per share attributable to Endurance International Group Holdings, Inc.:
|
|
|
|
|
|
|
|
||||||||
Basic net loss per share attributable to Endurance International Group Holdings Inc.
|
$
|
(0.21
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.55
|
)
|
Diluted net loss per share attributable to Endurance International Group Holdings Inc.
|
$
|
(0.21
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.55
|
)
|
Weighted-average common shares used in computing net loss per share attributable to Endurance International Group Holdings, Inc.:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
132,566,622
|
|
|
137,295,120
|
|
|
132,736,382
|
|
|
136,124,347
|
|
||||
Diluted
|
132,566,622
|
|
|
137,295,120
|
|
|
132,736,382
|
|
|
136,124,347
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||
|
(unaudited)
|
||||||||||
Restricted stock awards and units
|
9,014,101
|
|
|
2,472,180
|
|
|
8,138,075
|
|
|
3,212,653
|
|
Options
|
11,194,982
|
|
|
10,609,589
|
|
|
9,972,490
|
|
|
10,831,922
|
|
Total
|
20,209,083
|
|
|
13,081,769
|
|
|
18,110,565
|
|
|
14,044,575
|
|
|
December 31, 2016
|
|
June 30, 2017
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
790
|
|
|
$
|
790
|
|
Building
|
5,517
|
|
|
5,610
|
|
||
Software
|
52,130
|
|
|
61,699
|
|
||
Computers and office equipment
|
143,091
|
|
|
156,603
|
|
||
Furniture and fixtures
|
10,892
|
|
|
10,846
|
|
||
Leasehold improvements
|
21,244
|
|
|
21,559
|
|
||
Construction in process
|
6,691
|
|
|
9,121
|
|
||
Property and equipment—at cost
|
240,355
|
|
|
266,228
|
|
||
Less accumulated depreciation
|
(145,083
|
)
|
|
(171,603
|
)
|
||
Property and equipment—net
|
$
|
95,272
|
|
|
$
|
94,625
|
|
•
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
•
|
Level 2 inputs are quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.
|
•
|
Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value.
|
|
Balance
|
|
Quoted Prices
in Active Markets
for Identical Items
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
|
(in thousands)
|
||||||||||||||
Balance at December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate cap (included in other assets)
|
$
|
979
|
|
|
—
|
|
|
$
|
979
|
|
|
$
|
—
|
|
|
Total financial assets
|
$
|
979
|
|
|
$
|
—
|
|
|
$
|
979
|
|
|
$
|
—
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent earn-out consideration (included in deferred consideration)
|
$
|
818
|
|
|
—
|
|
|
—
|
|
|
$
|
818
|
|
||
Total financial liabilities
|
$
|
818
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
818
|
|
Balance at June 30, 2017
|
|
|
|
|
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Interest rate cap (included in other assets)
|
$
|
234
|
|
|
—
|
|
|
$
|
234
|
|
|
$
|
—
|
|
|
Total financial assets
|
$
|
234
|
|
|
$
|
—
|
|
|
$
|
234
|
|
|
$
|
—
|
|
|
|
||
|
Amount
|
||
|
(in thousands)
|
||
Financial liabilities measured using Level 3 inputs at December 31, 2016
|
$
|
818
|
|
Payment of contingent earn-outs related to 2012 acquisition
|
(818
|
)
|
|
Change in fair value of contingent earn-outs
|
—
|
|
|
Financial liabilities measured using Level 3 inputs at June 30, 2017
|
$
|
—
|
|
|
Web Presence Unit
|
|
Email Marketing Unit
|
|
Total
|
||||||
|
Amount
|
|
Amount
|
|
Amount
|
||||||
|
(in thousands)
|
|
(in thousands)
|
|
(in thousands)
|
||||||
Goodwill balance at December 31, 2016
|
$
|
1,255,604
|
|
|
$
|
604,305
|
|
|
$
|
1,859,909
|
|
Goodwill related to 2016 acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|||
Foreign translation impact
|
1,699
|
|
|
—
|
|
|
1,699
|
|
|||
Goodwill balance at June 30, 2017
|
$
|
1,257,303
|
|
|
$
|
604,305
|
|
|
$
|
1,861,608
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Weighted
Average
Useful Life
|
||||||
|
(dollars in thousands)
|
||||||||||||
Developed technology
|
$
|
284,005
|
|
|
$
|
111,348
|
|
|
$
|
172,657
|
|
|
7 years
|
Subscriber relationships
|
659,662
|
|
|
345,070
|
|
|
314,592
|
|
|
7 years
|
|||
Trade-names
|
133,805
|
|
|
57,789
|
|
|
76,016
|
|
|
8 years
|
|||
Intellectual property
|
34,084
|
|
|
10,270
|
|
|
23,814
|
|
|
13 years
|
|||
Domain names available for sale
|
29,954
|
|
|
4,976
|
|
|
24,978
|
|
|
Indefinite
|
|||
Leasehold interests
|
314
|
|
|
314
|
|
|
—
|
|
|
1 year
|
|||
Total December 31, 2016
|
$
|
1,141,824
|
|
|
$
|
529,767
|
|
|
$
|
612,057
|
|
|
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Weighted
Average
Useful Life
|
||||||
|
(dollars in thousands)
|
||||||||||||
Developed technology
|
$
|
285,748
|
|
|
$
|
128,654
|
|
|
$
|
157,094
|
|
|
7 years
|
Subscriber relationships
|
659,712
|
|
|
387,464
|
|
|
272,248
|
|
|
7 years
|
|||
Trade-names
|
133,804
|
|
|
64,807
|
|
|
68,997
|
|
|
8 years
|
|||
Intellectual property
|
34,278
|
|
|
11,990
|
|
|
22,288
|
|
|
13 years
|
|||
Domain names available for sale
|
30,258
|
|
|
5,895
|
|
|
24,363
|
|
|
Indefinite
|
|||
Leasehold interests
|
314
|
|
|
314
|
|
|
—
|
|
|
1 year
|
|||
Total June 30, 2017
|
$
|
1,144,114
|
|
|
$
|
599,124
|
|
|
$
|
544,990
|
|
|
|
|
|
At December 31, 2016
|
|
At June 30, 2017
|
||||
|
|
(in thousands)
|
||||||
2017 First Lien Term Loan
|
|
$
|
—
|
|
|
$
|
1,642,321
|
|
2013 First Lien Term Loan
|
|
985,640
|
|
|
—
|
|
||
Incremental First Lien Term Loan
|
|
674,860
|
|
|
—
|
|
||
Notes
|
|
326,480
|
|
|
327,882
|
|
||
Revolving Credit Facilities
|
|
—
|
|
|
—
|
|
||
Total Notes Payable
|
|
1,986,980
|
|
|
1,970,203
|
|
||
Current Portion of Notes Payable
|
|
35,700
|
|
|
33,945
|
|
||
Notes Payable - long term
|
|
$
|
1,951,280
|
|
|
$
|
1,936,258
|
|
|
|
At June 30, 2017
|
||
|
(in thousands)
|
|||
2017 First Lien Term Loan
|
|
$
|
1,688,764
|
|
Unamortized deferred financing costs
|
|
(24,492
|
)
|
|
Unamortized original issue discount
|
|
(21,951
|
)
|
|
Net 2017 First Lien Term Loan
|
|
1,642,321
|
|
|
Current portion of 2017 First Lien Term Loan
|
|
(33,945
|
)
|
|
2017 First Lien Term Loan - long term
|
|
$
|
1,608,376
|
|
|
|
At December 31, 2016
|
|
At June 30, 2017
|
||||
|
|
(in thousands)
|
||||||
2013 First Lien Term Loan
|
|
$
|
985,875
|
|
|
$
|
—
|
|
Unamortized deferred financing costs
|
|
(235
|
)
|
|
—
|
|
||
Net 2013 First Lien Term Loan
|
|
985,640
|
|
|
—
|
|
||
Current portion of 2013 First Lien Term Loan
|
|
21,000
|
|
|
—
|
|
||
2013 First Lien Term Loan - long term
|
|
$
|
964,640
|
|
|
$
|
—
|
|
|
|
At December 31, 2016
|
|
At June 30, 2017
|
||||
|
|
(in thousands)
|
||||||
Incremental First Lien Term Loan
|
|
$
|
720,300
|
|
|
$
|
—
|
|
Unamortized deferred financing costs
|
|
(25,869
|
)
|
|
—
|
|
||
Unamortized original issuance discount
|
|
(19,571
|
)
|
|
—
|
|
||
Net Incremental First Lien Term Loan
|
|
674,860
|
|
|
—
|
|
||
Current portion of Incremental First Lien Term Loan
|
|
14,700
|
|
|
—
|
|
||
Incremental First Lien Term Loan - long term
|
|
$
|
660,160
|
|
|
$
|
—
|
|
|
|
At December 31, 2016
|
|
At June 30, 2017
|
||||
|
|
(in thousands)
|
||||||
Senior Notes
|
|
$
|
350,000
|
|
|
$
|
350,000
|
|
Unamortized deferred financing costs
|
|
(17,238
|
)
|
|
(16,130
|
)
|
||
Unamortized original issuance discount
|
|
(6,282
|
)
|
|
(5,988
|
)
|
||
Net Senior Notes
|
|
326,480
|
|
|
327,882
|
|
||
Current portion of Senior Notes
|
|
—
|
|
|
—
|
|
||
Senior Notes - long term
|
|
$
|
326,480
|
|
|
$
|
327,882
|
|
Amounts maturing in:
|
(in thousands)
|
||
(Remainder of) 2017
|
$
|
16,973
|
|
2018
|
33,945
|
|
|
2019
|
33,945
|
|
|
2020
|
33,945
|
|
|
2021
|
33,945
|
|
|
Thereafter
|
1,886,011
|
|
|
Total
|
$
|
2,038,764
|
|
|
Three Months Ended June 30, 2016
|
|
Three Months Ended June 30, 2017
|
|
Six Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2017
|
||||||||
|
(percentage per annum)
|
||||||||||||||
Interest rate—LIBOR
|
6.00%-7.75%
|
|
|
5.14%-6.68%
|
|
|
6.00%-7.75%
|
|
|
5.14%-6.68%
|
|
||||
Interest rate—reference
|
7.50%-8.50%
|
|
|
*
|
|
|
7.50%-8.50%
|
|
|
*
|
|
||||
Interest rate—Senior Notes
|
10.875
|
%
|
|
10.875
|
%
|
|
10.875
|
%
|
|
10.875
|
%
|
||||
Non-refundable fee—unused facility
|
0.50
|
%
|
|
0.50
|
%
|
|
0.50
|
%
|
|
0.50
|
%
|
||||
|
(dollars in thousands)
|
||||||||||||||
Interest expense and service fees
|
$
|
37,512
|
|
|
$
|
36,165
|
|
|
$
|
65,508
|
|
|
$
|
72,820
|
|
Loss on extinguishment of debt
|
—
|
|
|
992
|
|
|
—
|
|
|
992
|
|
||||
Deferred financing fees immediately expensed
|
—
|
|
|
5,487
|
|
|
—
|
|
|
5,487
|
|
||||
Amortization of deferred financing fees
|
1,651
|
|
|
1,786
|
|
|
2,562
|
|
|
3,530
|
|
||||
Amortization of original issue discounts
|
823
|
|
|
886
|
|
|
1,272
|
|
|
1,732
|
|
||||
Amortization of net present value of deferred consideration
|
799
|
|
|
187
|
|
|
1,582
|
|
|
377
|
|
||||
Other interest expense
|
209
|
|
|
155
|
|
|
441
|
|
|
236
|
|
||||
Total interest expense
|
$
|
40,994
|
|
|
$
|
45,658
|
|
|
$
|
71,365
|
|
|
$
|
85,174
|
|
|
Total
Stockholders’
Equity
|
||
|
(in thousands)
|
||
Balance at December 31, 2016
|
$
|
124,383
|
|
Stock-based compensation
|
28,357
|
|
|
Reclassification of stock-compensation liability award
|
450
|
|
|
Stock option exercises
|
1,132
|
|
|
Foreign currency translation adjustment
|
1,914
|
|
|
Unrealized loss on derivative
|
(392
|
)
|
|
Net loss attributable to non-controlling interest
|
277
|
|
|
Net loss attributable to Endurance International Group
|
(74,517
|
)
|
|
Balance at June 30, 2017
|
$
|
81,604
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
1,703
|
|
|
$
|
1,661
|
|
|
$
|
2,473
|
|
|
$
|
3,167
|
|
Sales and marketing
|
2,677
|
|
|
2,911
|
|
|
4,399
|
|
|
4,764
|
|
||||
Engineering and development
|
1,441
|
|
|
1,728
|
|
|
2,205
|
|
|
2,899
|
|
||||
General and administrative
|
9,203
|
|
|
9,945
|
|
|
24,335
|
|
|
18,339
|
|
||||
Total stock-based compensation expense
|
$
|
15,024
|
|
|
$
|
16,245
|
|
|
$
|
33,412
|
|
|
$
|
29,169
|
|
|
Stock
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(In Years)
|
|
Aggregate
Intrinsic
Value(3)
(in thousands)
|
|||||
Outstanding at December 31, 2016
|
9,607,431
|
|
|
$
|
12.79
|
|
|
|
|
|
||
Granted
|
110,433
|
|
|
$
|
8.15
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Forfeited
|
(179,758
|
)
|
|
$
|
13.24
|
|
|
|
|
|
||
Expired
|
(209,074
|
)
|
|
$
|
13.68
|
|
|
|
|
|
||
Outstanding at June 30, 2017
|
9,329,032
|
|
|
$
|
12.71
|
|
|
7.4
|
|
$
|
63
|
|
Exercisable at June 30, 2017
|
5,875,021
|
|
|
$
|
12.90
|
|
|
6.8
|
|
$
|
—
|
|
Expected to vest after June 30, 2017 (1)
|
3,454,011
|
|
|
$
|
12.38
|
|
|
8.2
|
|
$
|
—
|
|
Exercisable as of June 30, 2017 and expected to vest (2)
|
9,329,032
|
|
|
$
|
12.71
|
|
|
7.4
|
|
$
|
63
|
|
(1)
|
This represents the number of unvested options outstanding as of
June 30, 2017
that are expected to vest in the future.
|
(2)
|
This represents the number of vested options as of
June 30, 2017
plus the number of unvested options outstanding as of
June 30, 2017
that are expected to vest in the future.
|
(3)
|
The aggregate intrinsic value was calculated based on the positive difference, if any, between the estimated fair value of the Company’s common stock on
June 30, 2017
of
$8.35
per share, or the date of exercise, as appropriate, and the exercise price of the underlying options.
|
|
Restricted Stock
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Non-vested at December 31, 2016
|
100,369
|
|
|
$
|
12.00
|
|
Granted
|
2,496,646
|
|
|
$
|
7.84
|
|
Vested and unissued
|
(188,511
|
)
|
|
$
|
7.85
|
|
Cancelled
|
(45,464
|
)
|
|
$
|
7.85
|
|
Non-vested at June 30, 2017
|
2,363,040
|
|
|
$
|
7.91
|
|
|
Restricted Stock
Awards |
|
Weighted
Average Grant Date Fair Value |
|||
Non-vested at December 31, 2016
|
7,332,537
|
|
|
$
|
13.21
|
|
Granted
|
160,428
|
|
|
$
|
8.15
|
|
Vested
|
(1,867,736
|
)
|
|
$
|
10.58
|
|
Canceled
|
(87,421
|
)
|
|
$
|
12.78
|
|
Non-vested at June 30, 2017
|
5,537,808
|
|
|
$
|
13.95
|
|
|
Stock
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual Term
(In Years)
|
|
Aggregate
Intrinsic
Value(3)
(in thousands)
|
|||||
Outstanding at December 31, 2016
|
1,931,830
|
|
|
$
|
8.73
|
|
|
|
|
|
||
Granted/ Exchanged
|
14,724
|
|
|
$
|
8.15
|
|
|
|
|
|
||
Exercised
|
(196,167
|
)
|
|
$
|
5.77
|
|
|
|
|
|
||
Forfeited
|
(333,361
|
)
|
|
$
|
9.99
|
|
|
|
|
|
||
Expired
|
(17,097
|
)
|
|
$
|
8.69
|
|
|
|
|
|
||
Outstanding at June 30, 2017
|
1,399,929
|
|
|
$
|
8.83
|
|
|
4.5
|
|
$
|
1,087
|
|
Exercisable at June 30, 2017
|
697,592
|
|
|
$
|
8.31
|
|
|
3.6
|
|
$
|
823
|
|
Expected to vest after June 30, 2017 (1)
|
702,337
|
|
|
$
|
9.35
|
|
|
5.4
|
|
$
|
264
|
|
Exercisable as of June, 2017 and expected to vest (2)
|
1,399,929
|
|
|
$
|
8.83
|
|
|
4.5
|
|
$
|
1,087
|
|
(1)
|
This represents the number of unvested options outstanding as of
June 30, 2017
that are expected to vest in the future.
|
(2)
|
This represents the number of vested options as of
June 30, 2017
plus the number of unvested options outstanding as of
June 30, 2017
that are expected to vest in the future.
|
(3)
|
The aggregate intrinsic value was calculated based on the positive difference, if any, between the estimated fair value of the Company’s common stock on
June 30, 2017
of
$8.35
per share, or the date of exercise, as appropriate, and the exercise price of the underlying options.
|
|
Restricted Stock
Units
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
Non-vested at December 31, 2016
|
1,473,655
|
|
|
$
|
9.25
|
|
Granted/ Exchanged
|
1,114,191
|
|
|
$
|
7.85
|
|
Vested
|
(536,126
|
)
|
|
$
|
7.30
|
|
Canceled
|
(350,377
|
)
|
|
$
|
8.94
|
|
Non-vested at June 30, 2017
|
1,701,343
|
|
|
$
|
8.21
|
|
|
|
Foreign Currency Translation Adjustments
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Total
|
||||||
|
|
(in thousands)
|
||||||||||
Balance at December 31, 2016
|
|
$
|
(2,395
|
)
|
|
$
|
(1,271
|
)
|
|
$
|
(3,666
|
)
|
Other comprehensive income (loss)
|
|
1,914
|
|
|
(392
|
)
|
|
1,522
|
|
|||
Balance at June 30, 2017
|
|
$
|
(481
|
)
|
|
$
|
(1,663
|
)
|
|
$
|
(2,144
|
)
|
|
Redeemable noncontrolling
Interest
|
||
|
(in thousands)
|
||
Balance as of December 31, 2016
|
$
|
17,753
|
|
Accretion in excess of fair value
|
7,247
|
|
|
Balance as of June 30, 2017
|
$
|
25,000
|
|
•
|
Net Operating Losses (“NOL”) incurred from the Company’s inception to
June 30, 2017
;
|
•
|
Expiration of various federal, state and foreign tax attributes;
|
•
|
Reversals of existing temporary differences;
|
•
|
Composition and cumulative amounts of existing temporary differences; and
|
•
|
Forecasted profit before tax.
|
|
Employee Severance
|
||||||||||
|
(in thousands)
|
||||||||||
|
Web presence segment
|
|
Email marketing segment
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
633
|
|
|
$
|
926
|
|
|
$
|
1,559
|
|
Severance charges
|
5,340
|
|
|
3,686
|
|
|
9,026
|
|
|||
Cash paid
|
(2,765
|
)
|
|
(2,463
|
)
|
|
(5,228
|
)
|
|||
Balance at June 30, 2017
|
$
|
3,208
|
|
|
$
|
2,149
|
|
|
$
|
5,357
|
|
|
Facilities
|
||||||||||
|
(in thousands)
|
||||||||||
|
Web presence segment
|
|
Email marketing segment
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
273
|
|
|
$
|
8,747
|
|
|
$
|
9,020
|
|
Facility adjustments
|
573
|
|
|
498
|
|
|
1,071
|
|
|||
Sublease income received
|
352
|
|
|
—
|
|
|
352
|
|
|||
Cash paid
|
(451
|
)
|
|
(2,404
|
)
|
|
(2,855
|
)
|
|||
Balance at June 30, 2017
|
$
|
747
|
|
|
$
|
6,841
|
|
|
$
|
7,588
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
|
(in thousands)
|
||||||||||||||
Cost of revenue
|
$
|
2,137
|
|
|
$
|
700
|
|
|
$
|
5,602
|
|
|
$
|
3,443
|
|
Sales and marketing
|
1,267
|
|
|
875
|
|
|
5,168
|
|
|
2,249
|
|
||||
Engineering and development
|
1,224
|
|
|
426
|
|
|
3,242
|
|
|
1,078
|
|
||||
General and administrative
|
1,035
|
|
|
2,467
|
|
|
3,253
|
|
|
3,325
|
|
||||
Total restructuring charges
|
$
|
5,663
|
|
|
$
|
4,468
|
|
|
$
|
17,265
|
|
|
$
|
10,095
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2017
|
2016
|
|
2017
|
||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||
Cost of revenue
|
$
|
3,300
|
|
|
$
|
3,100
|
|
$
|
6,400
|
|
|
$
|
6,000
|
|
Sales and marketing
|
100
|
|
|
400
|
|
200
|
|
|
500
|
|
||||
Engineering and development
|
300
|
|
|
200
|
|
600
|
|
|
650
|
|
||||
General and administrative
|
—
|
|
|
50
|
|
100
|
|
|
100
|
|
||||
Total related party transaction expense, net
|
$
|
3,700
|
|
|
$
|
3,750
|
|
$
|
7,300
|
|
|
$
|
7,250
|
|
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||
|
2016
|
|
2017
|
2016
|
|
2017
|
||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||
Revenue
|
$
|
(700
|
)
|
|
$
|
(900
|
)
|
$
|
(1,300
|
)
|
|
$
|
(2,000
|
)
|
Revenue (contra)
|
2,000
|
|
|
1,950
|
|
4,100
|
|
|
4,150
|
|
||||
Total related party transaction impact to revenue
|
$
|
1,300
|
|
|
$
|
1,050
|
|
$
|
2,800
|
|
|
$
|
2,150
|
|
Cost of revenue
|
100
|
|
|
175
|
|
300
|
|
|
375
|
|
||||
Total related party transaction expense, net
|
$
|
1,400
|
|
|
$
|
1,225
|
|
$
|
3,100
|
|
|
$
|
2,525
|
|
Consolidated Statement of Operations and Comprehensive Income (Loss):
|
Three Months Ended
June 30, 2016 |
Three Months Ended
June 30, 2017 |
||||||||||||||||||||
|
Web presence
|
|
Email marketing
|
|
Total
|
Web presence
|
|
Email marketing
|
|
Total
|
||||||||||||
|
(in thousands)
|
(in thousands)
|
||||||||||||||||||||
Revenue
|
$
|
196,041
|
|
|
$
|
94,672
|
|
|
$
|
290,713
|
|
$
|
193,172
|
|
|
$
|
99,086
|
|
|
$
|
292,258
|
|
Gross profit
|
86,666
|
|
|
50,970
|
|
|
137,636
|
|
82,552
|
|
|
63,123
|
|
|
145,675
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net loss
|
(17,461
|
)
|
|
(15,969
|
)
|
|
(33,430
|
)
|
(33,139
|
)
|
|
(2,276
|
)
|
|
(35,415
|
)
|
||||||
Interest expense, net (1)
|
18,077
|
|
|
22,775
|
|
|
40,852
|
|
20,294
|
|
|
25,179
|
|
|
45,473
|
|
||||||
Income tax expense (benefit)
|
(4,341
|
)
|
|
(9,590
|
)
|
|
(13,931
|
)
|
3,995
|
|
|
(1,367
|
)
|
|
2,628
|
|
||||||
Depreciation
|
9,098
|
|
|
7,662
|
|
|
16,760
|
|
10,525
|
|
|
3,526
|
|
|
14,051
|
|
||||||
Amortization of other intangible assets
|
19,768
|
|
|
18,055
|
|
|
37,823
|
|
16,375
|
|
|
18,565
|
|
|
34,940
|
|
||||||
Stock-based compensation
|
10,429
|
|
|
4,595
|
|
|
15,024
|
|
14,345
|
|
|
1,900
|
|
|
16,245
|
|
||||||
Restructuring expenses
|
789
|
|
|
4,874
|
|
|
5,663
|
|
3,699
|
|
|
769
|
|
|
4,468
|
|
||||||
Transaction expenses and charges
|
757
|
|
|
221
|
|
|
978
|
|
—
|
|
|
193
|
|
|
193
|
|
||||||
Loss (gain) of unconsolidated entities
|
341
|
|
|
—
|
|
|
341
|
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
||||||
Impairment of other long-lived assets
|
6,848
|
|
|
—
|
|
|
6,848
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adjusted EBITDA
|
$
|
44,305
|
|
|
$
|
32,623
|
|
|
$
|
76,928
|
|
$
|
36,055
|
|
|
$
|
46,489
|
|
|
$
|
82,544
|
|
(1)
|
Interest expense includes impact of amortization of deferred financing costs, original issuance discounts and interest income. For the three and six months ended June 30, 2017, it also includes
$6.5 million
of deferred financing costs and OID immediately expensed upon the 2017 Refinancing.
|
(2)
|
The (gain) loss of unconsolidated entities is reported on a net basis for the three months ended June 30, 2016. The six months ended June 30, 2016 includes a gain of
$11.4 million
on the Company's investment in WZ UK Ltd. This gain was generated on January 6, 2016, when the Company increased its ownership stake in WZ UK Ltd. from
49%
to
57.5%
, which required a revaluation of the Company's existing investment to its implied fair value. This
$11.4 million
gain was partially offset by the Company's proportionate shares of net losses from unconsolidated entities of
$1.0 million
.
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Assets:
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
3
|
|
$
|
4
|
|
$
|
39,034
|
|
$
|
14,555
|
|
$
|
—
|
|
$
|
53,596
|
|
Restricted cash
|
—
|
|
—
|
|
2,620
|
|
682
|
|
—
|
|
3,302
|
|
||||||
Accounts receivable
|
—
|
|
—
|
|
10,148
|
|
2,940
|
|
—
|
|
13,088
|
|
||||||
Prepaid domain name registry fees
|
—
|
|
—
|
|
31,044
|
|
24,697
|
|
(297
|
)
|
55,444
|
|
||||||
Prepaid expenses & other current assets
|
—
|
|
81
|
|
17,996
|
|
10,601
|
|
—
|
|
28,678
|
|
||||||
Total current assets
|
3
|
|
85
|
|
100,842
|
|
53,475
|
|
(297
|
)
|
154,108
|
|
||||||
Intercompany receivables, net
|
31,665
|
|
799,953
|
|
(690,761
|
)
|
(140,857
|
)
|
—
|
|
—
|
|
||||||
Property and equipment, net
|
—
|
|
—
|
|
82,901
|
|
12,371
|
|
—
|
|
95,272
|
|
||||||
Goodwill
|
—
|
|
—
|
|
1,683,121
|
|
176,788
|
|
—
|
|
1,859,909
|
|
||||||
Other intangible assets, net
|
—
|
|
—
|
|
592,095
|
|
19,962
|
|
—
|
|
612,057
|
|
||||||
Investment in subsidiaries
|
92,068
|
|
1,299,562
|
|
40,651
|
|
—
|
|
(1,432,281
|
)
|
—
|
|
||||||
Other assets
|
—
|
|
5,911
|
|
23,153
|
|
5,864
|
|
—
|
|
34,928
|
|
||||||
Total assets
|
$
|
123,736
|
|
$
|
2,105,511
|
|
$
|
1,832,002
|
|
$
|
127,603
|
|
$
|
(1,432,578
|
)
|
$
|
2,756,274
|
|
Liabilities, redeemable non-controlling interest and stockholders' equity:
|
|
|
||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
$
|
—
|
|
$
|
13,801
|
|
$
|
2,273
|
|
$
|
—
|
|
$
|
16,074
|
|
Accrued expenses and other current liabilities
|
—
|
|
27,208
|
|
60,760
|
|
9,890
|
|
—
|
|
97,858
|
|
||||||
Deferred revenue
|
—
|
|
—
|
|
295,208
|
|
60,925
|
|
(943
|
)
|
355,190
|
|
||||||
Current portion of notes payable
|
—
|
|
35,700
|
|
—
|
|
—
|
|
—
|
|
35,700
|
|
||||||
Current portion of capital lease obligations
|
—
|
|
—
|
|
6,690
|
|
—
|
|
—
|
|
6,690
|
|
||||||
Deferred consideration, short-term
|
—
|
|
—
|
|
4,415
|
|
858
|
|
—
|
|
5,273
|
|
||||||
Total current liabilities
|
—
|
|
62,908
|
|
380,874
|
|
73,946
|
|
(943
|
)
|
516,785
|
|
||||||
Deferred revenue, long-term
|
—
|
|
—
|
|
77,649
|
|
11,551
|
|
—
|
|
89,200
|
|
||||||
Notes payable
|
—
|
|
1,951,280
|
|
—
|
|
—
|
|
—
|
|
1,951,280
|
|
||||||
Capital lease obligations
|
—
|
|
—
|
|
512
|
|
—
|
|
—
|
|
512
|
|
||||||
Deferred consideration
|
—
|
|
—
|
|
7,419
|
|
25
|
|
—
|
|
7,444
|
|
||||||
Other long-term liabilities
|
—
|
|
(745
|
)
|
48,233
|
|
1,429
|
|
—
|
|
48,917
|
|
||||||
Total liabilities
|
—
|
|
2,013,443
|
|
514,687
|
|
86,951
|
|
(943
|
)
|
2,614,138
|
|
||||||
Redeemable non-controlling interest
|
—
|
|
—
|
|
17,753
|
|
—
|
|
—
|
|
17,753
|
|
||||||
Equity
|
123,736
|
|
92,068
|
|
1,299,562
|
|
40,652
|
|
(1,431,635
|
)
|
124,383
|
|
||||||
Total liabilities and equity
|
$
|
123,736
|
|
$
|
2,105,511
|
|
$
|
1,832,002
|
|
$
|
127,603
|
|
$
|
(1,432,578
|
)
|
$
|
2,756,274
|
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Assets:
|
|
|
|
|
|
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
172
|
|
$
|
3
|
|
$
|
63,458
|
|
$
|
17,776
|
|
$
|
—
|
|
$
|
81,409
|
|
Restricted cash
|
—
|
|
—
|
|
2,472
|
|
929
|
|
—
|
|
3,401
|
|
||||||
Accounts receivable
|
—
|
|
—
|
|
8,165
|
|
3,499
|
|
—
|
|
11,664
|
|
||||||
Prepaid domain name registry fees
|
—
|
|
—
|
|
30,961
|
|
25,812
|
|
(63
|
)
|
56,710
|
|
||||||
Prepaid expenses & other current assets
|
14
|
|
57
|
|
19,230
|
|
9,543
|
|
—
|
|
28,844
|
|
||||||
Total current assets
|
186
|
|
60
|
|
124,286
|
|
57,559
|
|
(63
|
)
|
182,028
|
|
||||||
Intercompany receivables, net
|
32,614
|
|
724,750
|
|
(615,827
|
)
|
(141,537
|
)
|
—
|
|
—
|
|
||||||
Property and equipment, net
|
—
|
|
—
|
|
80,599
|
|
14,026
|
|
—
|
|
94,625
|
|
||||||
Goodwill
|
—
|
|
—
|
|
1,685,981
|
|
175,627
|
|
—
|
|
1,861,608
|
|
||||||
Other intangible assets, net
|
—
|
|
—
|
|
528,901
|
|
16,089
|
|
—
|
|
544,990
|
|
||||||
Investment in subsidiaries
|
48,574
|
|
1,309,329
|
|
43,070
|
|
—
|
|
(1,400,973
|
)
|
—
|
|
||||||
Other assets
|
—
|
|
4,323
|
|
22,629
|
|
6,276
|
|
—
|
|
33,228
|
|
||||||
Total assets
|
$
|
81,374
|
|
$
|
2,038,462
|
|
$
|
1,869,639
|
|
$
|
128,040
|
|
$
|
(1,401,036
|
)
|
$
|
2,716,479
|
|
Liabilities, redeemable non-controlling interest and stockholders' equity:
|
|
|
||||||||||||||||
Current liabilities:
|
|
|
|
|
|
|
||||||||||||
Accounts payable
|
$
|
—
|
|
$
|
—
|
|
$
|
11,040
|
|
$
|
1,801
|
|
$
|
—
|
|
$
|
12,841
|
|
Accrued expenses and other current liabilities
|
—
|
|
20,659
|
|
67,496
|
|
9,968
|
|
—
|
|
98,123
|
|
||||||
Deferred revenue
|
—
|
|
—
|
|
308,301
|
|
61,817
|
|
(293
|
)
|
369,825
|
|
||||||
Current portion of notes payable
|
—
|
|
33,945
|
|
—
|
|
—
|
|
—
|
|
33,945
|
|
||||||
Current portion of capital lease obligations
|
—
|
|
—
|
|
4,481
|
|
—
|
|
—
|
|
4,481
|
|
||||||
Deferred consideration, short-term
|
—
|
|
—
|
|
4,250
|
|
—
|
|
—
|
|
4,250
|
|
||||||
Total current liabilities
|
—
|
|
54,604
|
|
395,568
|
|
73,586
|
|
(293
|
)
|
523,465
|
|
||||||
Deferred revenue, long-term
|
—
|
|
—
|
|
80,693
|
|
10,563
|
|
—
|
|
91,256
|
|
||||||
Notes payable
|
—
|
|
1,936,258
|
|
—
|
|
—
|
|
—
|
|
1,936,258
|
|
||||||
Capital lease obligations
|
—
|
|
—
|
|
1,537
|
|
—
|
|
—
|
|
1,537
|
|
||||||
Deferred consideration
|
—
|
|
—
|
|
3,412
|
|
25
|
|
—
|
|
3,437
|
|
||||||
Other long-term liabilities
|
—
|
|
(974
|
)
|
54,100
|
|
796
|
|
—
|
|
53,922
|
|
||||||
Total liabilities
|
—
|
|
1,989,888
|
|
535,310
|
|
84,970
|
|
(293
|
)
|
2,609,875
|
|
||||||
Redeemable non-controlling interest
|
—
|
|
—
|
|
25,000
|
|
—
|
|
—
|
|
25,000
|
|
||||||
Equity
|
81,374
|
|
48,574
|
|
1,309,329
|
|
43,070
|
|
(1,400,743
|
)
|
81,604
|
|
||||||
Total liabilities and equity
|
$
|
81,374
|
|
$
|
2,038,462
|
|
$
|
1,869,639
|
|
$
|
128,040
|
|
$
|
(1,401,036
|
)
|
$
|
2,716,479
|
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
257,712
|
|
$
|
34,324
|
|
$
|
(1,323
|
)
|
$
|
290,713
|
|
Cost of revenue
|
—
|
|
—
|
|
131,629
|
|
22,942
|
|
(1,494
|
)
|
153,077
|
|
||||||
Gross profit
|
—
|
|
—
|
|
126,083
|
|
11,382
|
|
171
|
|
137,636
|
|
||||||
Operating expense:
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
—
|
|
—
|
|
62,747
|
|
17,571
|
|
(9
|
)
|
80,309
|
|
||||||
Engineering and development
|
—
|
|
—
|
|
20,883
|
|
6,804
|
|
—
|
|
27,687
|
|
||||||
General and administrative
|
—
|
|
76
|
|
31,232
|
|
3,522
|
|
—
|
|
34,830
|
|
||||||
Transaction costs
|
—
|
|
—
|
|
999
|
|
(21
|
)
|
—
|
|
978
|
|
||||||
Total operating expense
|
—
|
|
76
|
|
115,861
|
|
27,876
|
|
(9
|
)
|
143,804
|
|
||||||
Income (loss) from operations
|
—
|
|
(76
|
)
|
10,222
|
|
(16,494
|
)
|
180
|
|
(6,168
|
)
|
||||||
Interest expense and other income, net
|
—
|
|
39,985
|
|
863
|
|
4
|
|
—
|
|
40,852
|
|
||||||
Income (loss) before income taxes and equity earnings of unconsolidated entities
|
—
|
|
(40,061
|
)
|
9,359
|
|
(16,498
|
)
|
180
|
|
(47,020
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
(15,654
|
)
|
2,697
|
|
(974
|
)
|
—
|
|
(13,931
|
)
|
||||||
Loss before equity earnings of unconsolidated entities
|
—
|
|
(24,407
|
)
|
6,662
|
|
(15,524
|
)
|
180
|
|
(33,089
|
)
|
||||||
Equity loss of unconsolidated entities, net of tax
|
33,612
|
|
9,203
|
|
15,865
|
|
92
|
|
(58,431
|
)
|
341
|
|
||||||
Net loss
|
(33,612
|
)
|
(33,610
|
)
|
(9,203
|
)
|
(15,616
|
)
|
58,611
|
|
(33,430
|
)
|
||||||
Net loss attributable to non-controlling interest
|
—
|
|
—
|
|
(5,390
|
)
|
—
|
|
—
|
|
(5,390
|
)
|
||||||
Net loss attributable to Endurance International Group Holdings, Inc.
|
$
|
(33,612
|
)
|
$
|
(33,610
|
)
|
$
|
(3,813
|
)
|
$
|
(15,616
|
)
|
$
|
58,611
|
|
$
|
(28,040
|
)
|
Comprehensive income (loss):
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
540
|
|
—
|
|
540
|
|
||||||
Unrealized gain (loss) on cash flow hedge, net of taxes
|
—
|
|
(427
|
)
|
—
|
|
—
|
|
—
|
|
(427
|
)
|
||||||
Total comprehensive loss
|
$
|
(33,612
|
)
|
$
|
(34,037
|
)
|
$
|
(3,813
|
)
|
$
|
(15,076
|
)
|
$
|
58,611
|
|
$
|
(27,927
|
)
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
461,781
|
|
$
|
67,701
|
|
$
|
(1,656
|
)
|
$
|
527,826
|
|
Cost of revenue
|
—
|
|
—
|
|
246,260
|
|
45,357
|
|
(2,064
|
)
|
289,553
|
|
||||||
Gross profit
|
—
|
|
—
|
|
215,521
|
|
22,344
|
|
408
|
|
238,273
|
|
||||||
Operating expense:
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
—
|
|
—
|
|
116,976
|
|
42,642
|
|
(15
|
)
|
159,603
|
|
||||||
Engineering and development
|
—
|
|
—
|
|
33,781
|
|
10,161
|
|
—
|
|
43,942
|
|
||||||
General and administrative
|
—
|
|
120
|
|
68,052
|
|
6,937
|
|
—
|
|
75,109
|
|
||||||
Transaction costs
|
—
|
|
—
|
|
32,098
|
|
—
|
|
—
|
|
32,098
|
|
||||||
Total operating expense
|
—
|
|
120
|
|
250,907
|
|
59,740
|
|
(15
|
)
|
310,752
|
|
||||||
Income (loss) from operations
|
—
|
|
(120
|
)
|
(35,386
|
)
|
(37,396
|
)
|
423
|
|
(72,479
|
)
|
||||||
Interest expense and other income, net
|
—
|
|
69,341
|
|
(9,577
|
)
|
(85
|
)
|
—
|
|
59,679
|
|
||||||
Income (loss) before income taxes and equity earnings of unconsolidated entities
|
—
|
|
(69,461
|
)
|
(25,809
|
)
|
(37,311
|
)
|
423
|
|
(132,158
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
(26,870
|
)
|
(86,437
|
)
|
(526
|
)
|
—
|
|
(113,833
|
)
|
||||||
Loss before equity earnings of unconsolidated entities
|
—
|
|
(42,591
|
)
|
60,628
|
|
(36,785
|
)
|
423
|
|
(18,325
|
)
|
||||||
Equity loss of unconsolidated entities, net of tax
|
19,773
|
|
(22,820
|
)
|
37,810
|
|
92
|
|
(33,831
|
)
|
1,024
|
|
||||||
Net loss
|
(19,773
|
)
|
(19,771
|
)
|
22,818
|
|
(36,877
|
)
|
34,254
|
|
(19,349
|
)
|
||||||
Net loss attributable to non-controlling interest
|
—
|
|
—
|
|
(13,120
|
)
|
—
|
|
—
|
|
(13,120
|
)
|
||||||
Net loss attributable to Endurance International Group Holdings, Inc.
|
$
|
(19,773
|
)
|
$
|
(19,771
|
)
|
$
|
35,938
|
|
$
|
(36,877
|
)
|
$
|
34,254
|
|
$
|
(6,229
|
)
|
Comprehensive income (loss):
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
882
|
|
—
|
|
882
|
|
||||||
Unrealized gain (loss) on cash flow hedge, net of taxes
|
—
|
|
(1,938
|
)
|
—
|
|
—
|
|
—
|
|
(1,938
|
)
|
||||||
Total comprehensive loss
|
$
|
(19,773
|
)
|
$
|
(21,709
|
)
|
$
|
35,938
|
|
$
|
(35,995
|
)
|
$
|
34,254
|
|
$
|
(7,285
|
)
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
259,725
|
|
$
|
33,769
|
|
$
|
(1,236
|
)
|
$
|
292,258
|
|
Cost of revenue
|
—
|
|
—
|
|
125,511
|
|
22,148
|
|
(1,076
|
)
|
146,583
|
|
||||||
Gross profit
|
—
|
|
—
|
|
134,214
|
|
11,621
|
|
(160
|
)
|
145,675
|
|
||||||
Operating expense:
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
—
|
|
—
|
|
65,948
|
|
6,158
|
|
—
|
|
72,106
|
|
||||||
Engineering and development
|
—
|
|
—
|
|
18,351
|
|
1,798
|
|
—
|
|
20,149
|
|
||||||
General and administrative
|
—
|
|
55
|
|
37,712
|
|
2,813
|
|
—
|
|
40,580
|
|
||||||
Transaction costs
|
—
|
|
—
|
|
193
|
|
—
|
|
—
|
|
193
|
|
||||||
Total operating expense
|
—
|
|
55
|
|
122,204
|
|
10,769
|
|
—
|
|
133,028
|
|
||||||
Income (loss) from operations
|
—
|
|
(55
|
)
|
12,010
|
|
852
|
|
(160
|
)
|
12,647
|
|
||||||
Interest expense and other income, net
|
—
|
|
45,406
|
|
247
|
|
(180
|
)
|
—
|
|
45,473
|
|
||||||
Income (loss) before income taxes and equity earnings of unconsolidated entities
|
—
|
|
(45,461
|
)
|
11,763
|
|
1,032
|
|
(160
|
)
|
(32,826
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
(16,794
|
)
|
19,555
|
|
(133
|
)
|
—
|
|
2,628
|
|
||||||
Loss before equity earnings of unconsolidated entities
|
—
|
|
(28,667
|
)
|
(7,792
|
)
|
1,165
|
|
(160
|
)
|
(35,454
|
)
|
||||||
Equity loss of unconsolidated entities, net of tax
|
35,256
|
|
6,589
|
|
(1,204
|
)
|
—
|
|
(40,680
|
)
|
(39
|
)
|
||||||
Net loss
|
(35,256
|
)
|
(35,256
|
)
|
(6,588
|
)
|
1,165
|
|
40,520
|
|
(35,415
|
)
|
||||||
Net loss attributable to non-controlling interest
|
—
|
|
—
|
|
3,714
|
|
—
|
|
—
|
|
3,714
|
|
||||||
Net loss attributable to Endurance International Group Holdings, Inc.
|
$
|
(35,256
|
)
|
$
|
(35,256
|
)
|
$
|
(10,302
|
)
|
$
|
1,165
|
|
$
|
40,520
|
|
$
|
(39,129
|
)
|
Comprehensive income (loss):
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
1,228
|
|
—
|
|
1,228
|
|
||||||
Unrealized gain (loss) on cash flow hedge, net of taxes
|
—
|
|
(176
|
)
|
—
|
|
—
|
|
—
|
|
(176
|
)
|
||||||
Total comprehensive loss
|
$
|
(35,256
|
)
|
$
|
(35,432
|
)
|
$
|
(10,302
|
)
|
$
|
2,393
|
|
$
|
40,520
|
|
$
|
(38,077
|
)
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
521,821
|
|
$
|
68,302
|
|
$
|
(2,728
|
)
|
$
|
587,395
|
|
Cost of revenue
|
—
|
|
—
|
|
253,403
|
|
44,237
|
|
(2,308
|
)
|
295,332
|
|
||||||
Gross profit
|
—
|
|
—
|
|
268,418
|
|
24,065
|
|
(420
|
)
|
292,063
|
|
||||||
Operating expense:
|
|
|
|
|
|
|
||||||||||||
Sales and marketing
|
—
|
|
—
|
|
134,016
|
|
10,865
|
|
(3
|
)
|
144,878
|
|
||||||
Engineering and development
|
—
|
|
—
|
|
33,641
|
|
6,870
|
|
—
|
|
40,511
|
|
||||||
General and administrative
|
—
|
|
110
|
|
73,383
|
|
6,167
|
|
—
|
|
79,660
|
|
||||||
Transaction costs
|
—
|
|
—
|
|
773
|
|
—
|
|
—
|
|
773
|
|
||||||
Total operating expense
|
—
|
|
110
|
|
241,813
|
|
23,902
|
|
(3
|
)
|
265,822
|
|
||||||
Income (loss) from operations
|
—
|
|
(110
|
)
|
26,605
|
|
163
|
|
(417
|
)
|
26,241
|
|
||||||
Interest expense and other income, net
|
—
|
|
84,652
|
|
394
|
|
(175
|
)
|
—
|
|
84,871
|
|
||||||
Income (loss) before income taxes and equity earnings of unconsolidated entities
|
—
|
|
(84,762
|
)
|
26,211
|
|
338
|
|
(417
|
)
|
(58,630
|
)
|
||||||
Income tax expense (benefit)
|
—
|
|
(31,311
|
)
|
39,250
|
|
463
|
|
—
|
|
8,402
|
|
||||||
Loss before equity earnings of unconsolidated entities
|
—
|
|
(53,451
|
)
|
(13,039
|
)
|
(125
|
)
|
(417
|
)
|
(67,032
|
)
|
||||||
Equity loss of unconsolidated entities, net of tax
|
66,577
|
|
13,127
|
|
87
|
|
—
|
|
(79,830
|
)
|
(39
|
)
|
||||||
Net loss
|
(66,577
|
)
|
(66,578
|
)
|
(13,126
|
)
|
(125
|
)
|
79,413
|
|
(66,993
|
)
|
||||||
Net loss attributable to non-controlling interest
|
—
|
|
—
|
|
7,524
|
|
—
|
|
—
|
|
7,524
|
|
||||||
Net loss attributable to Endurance International Group Holdings, Inc.
|
$
|
(66,577
|
)
|
$
|
(66,578
|
)
|
$
|
(20,650
|
)
|
$
|
(125
|
)
|
$
|
79,413
|
|
$
|
(74,517
|
)
|
Comprehensive income (loss):
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation adjustments
|
—
|
|
—
|
|
—
|
|
1,914
|
|
—
|
|
1,914
|
|
||||||
Unrealized gain (loss) on cash flow hedge, net of taxes
|
—
|
|
(392
|
)
|
—
|
|
—
|
|
—
|
|
(392
|
)
|
||||||
Total comprehensive loss
|
$
|
(66,577
|
)
|
$
|
(66,970
|
)
|
$
|
(20,650
|
)
|
$
|
1,789
|
|
$
|
79,413
|
|
$
|
(72,995
|
)
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
$
|
(22,903
|
)
|
$
|
108,768
|
|
$
|
(20,250
|
)
|
$
|
—
|
|
$
|
65,615
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||||||||
Businesses acquired in purchase transaction, net of cash acquired
|
—
|
|
—
|
|
(899,889
|
)
|
—
|
|
—
|
|
(899,889
|
)
|
||||||
Purchases of property and equipment
|
—
|
|
—
|
|
(17,881
|
)
|
(3,080
|
)
|
—
|
|
(20,961
|
)
|
||||||
Cash paid for minority investments
|
—
|
|
—
|
|
(5,600
|
)
|
—
|
|
—
|
|
(5,600
|
)
|
||||||
Proceeds from sale of property and equipment
|
—
|
|
—
|
|
252
|
|
—
|
|
—
|
|
252
|
|
||||||
Proceeds from note receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Proceeds from sale of assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Purchases of intangible assets
|
—
|
|
—
|
|
(11
|
)
|
(16
|
)
|
—
|
|
(27
|
)
|
||||||
Net (deposits) and withdrawals of principal balances in restricted cash accounts
|
—
|
|
—
|
|
(347
|
)
|
(421
|
)
|
—
|
|
(768
|
)
|
||||||
Net cash used in investing activities
|
—
|
|
—
|
|
(923,476
|
)
|
(3,517
|
)
|
—
|
|
(926,993
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||||||||
Proceeds from issuance of notes payable and draws on revolver
|
—
|
|
1,072,178
|
|
—
|
|
—
|
|
—
|
|
1,072,178
|
|
||||||
Repayment of notes payable and revolver
|
—
|
|
(116,850
|
)
|
—
|
|
—
|
|
—
|
|
(116,850
|
)
|
||||||
Payment of financing costs
|
—
|
|
(51,727
|
)
|
—
|
|
—
|
|
—
|
|
(51,727
|
)
|
||||||
Payment of deferred consideration
|
—
|
|
—
|
|
(37
|
)
|
(670
|
)
|
—
|
|
(707
|
)
|
||||||
Payment of redeemable non-controlling interest liability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Principal payments on capital lease obligations
|
—
|
|
—
|
|
(2,896
|
)
|
—
|
|
—
|
|
(2,896
|
)
|
||||||
Proceeds from exercise of stock options
|
1,328
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,328
|
|
||||||
Capital investments from minority partner
|
—
|
|
—
|
|
—
|
|
1,000
|
|
—
|
|
1,000
|
|
||||||
Intercompany loans and investments
|
(1,332
|
)
|
(880,752
|
)
|
854,910
|
|
27,174
|
|
—
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
(4
|
)
|
22,849
|
|
851,977
|
|
27,504
|
|
—
|
|
902,326
|
|
||||||
Net effect of exchange rate on cash and cash equivalents
|
—
|
|
—
|
|
—
|
|
1,614
|
|
—
|
|
1,614
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(4
|
)
|
(54
|
)
|
37,269
|
|
5,351
|
|
—
|
|
42,562
|
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
12
|
|
67
|
|
21,286
|
|
11,665
|
|
—
|
|
33,030
|
|
||||||
End of period
|
$
|
8
|
|
$
|
13
|
|
$
|
58,555
|
|
$
|
17,016
|
|
$
|
—
|
|
$
|
75,592
|
|
|
Parent
|
Issuer
|
Guarantor Subsidiaries
|
Non-Guarantor Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(14
|
)
|
$
|
(47,489
|
)
|
$
|
126,047
|
|
$
|
3,878
|
|
$
|
—
|
|
$
|
82,422
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||||||||
Businesses acquired in purchase transaction, net of cash acquired
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Purchases of property and equipment
|
—
|
|
—
|
|
(17,020
|
)
|
(2,275
|
)
|
—
|
|
(19,295
|
)
|
||||||
Cash paid for minority investments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Proceeds from sale of property and equipment
|
—
|
|
—
|
|
287
|
|
—
|
|
—
|
|
287
|
|
||||||
Proceeds from note receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Proceeds from sale of assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Purchases of intangible assets
|
—
|
|
—
|
|
(1,646
|
)
|
(34
|
)
|
—
|
|
(1,680
|
)
|
||||||
Net (deposits) and withdrawals of principal balances in restricted cash accounts
|
—
|
|
—
|
|
148
|
|
(248
|
)
|
—
|
|
(100
|
)
|
||||||
Net cash used in investing activities
|
—
|
|
—
|
|
(18,231
|
)
|
(2,557
|
)
|
—
|
|
(20,788
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
—
|
|
|||||||||||
Proceeds from issuance of term loan and notes, net of original issue discounts
|
—
|
|
1,693,007
|
|
—
|
|
—
|
|
—
|
|
1,693,007
|
|
||||||
Repayment of term loans
|
—
|
|
(1,714,661
|
)
|
—
|
|
—
|
|
—
|
|
(1,714,661
|
)
|
||||||
Payment of financing costs
|
—
|
|
(6,060
|
)
|
—
|
|
—
|
|
—
|
|
(6,060
|
)
|
||||||
Payment of deferred consideration
|
—
|
|
—
|
|
(4,550
|
)
|
(858
|
)
|
—
|
|
(5,408
|
)
|
||||||
Payment of redeemable non-controlling interest liability
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Principal payments on capital lease obligations
|
—
|
|
—
|
|
(3,908
|
)
|
—
|
|
—
|
|
(3,908
|
)
|
||||||
Proceeds from exercise of stock options
|
1,132
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,132
|
|
||||||
Capital investments from minority partner
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Intercompany loans and investments
|
(949
|
)
|
75,202
|
|
(74,934
|
)
|
681
|
|
—
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
183
|
|
47,488
|
|
(83,392
|
)
|
(177
|
)
|
—
|
|
(35,898
|
)
|
||||||
Net effect of exchange rate on cash and cash equivalents
|
—
|
|
—
|
|
—
|
|
2,077
|
|
—
|
|
2,077
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
169
|
|
(1
|
)
|
24,424
|
|
3,221
|
|
—
|
|
27,813
|
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
||||||||||||
Beginning of period
|
3
|
|
4
|
|
39,034
|
|
14,555
|
|
—
|
|
53,596
|
|
||||||
End of period
|
$
|
172
|
|
$
|
3
|
|
$
|
63,458
|
|
$
|
17,776
|
|
$
|
—
|
|
$
|
81,409
|
|
•
|
Investing in key brands that generally attract subscribers with high long-term revenue potential, including Constant Contact, Bluehost and HostGator, or that address specific market opportunities, including our website builder product and international brands such as BigRock;
|
•
|
Upgrading the product, customer support and user experience for our key web hosting brands and our website builder product, including through greater centralization of our customer support organization; and
|
•
|
Rolling out various initiatives to expand revenue streams though expansion of our international business, cross-selling products between our two segments and other product initiatives.
|
•
|
Continued to focus our marketing expenditures on our key brands, which, taken together, showed positive net subscriber additions for the three and six months ended June 30, 2017;
|
•
|
Substantially completed the move of our Orem, Utah-based customer support to our Tempe, Arizona support center;
|
•
|
Offered our email marketing product on a free-to-paid basis to subscribers of HostGator and iPage, with encouraging early results on adoption and free-to-paid conversions; and
|
•
|
Continued to make improvements to our website builder product in preparation for an anticipated re-launch of the product in the second half of 2017.
|
•
|
Full six month impact in the 2017 period.
We began including Constant Contact in our financial results on February 10, 2016, the day after the closing of the acquisition. The inclusion of Constant Contact results for the entire six months ended June 30, 2017 was a significant factor in many of the year over year differences between that period and the comparable period in 2016.
|
•
|
Purchase accounting adjustment
. Our financial results can be impacted by purchase accounting adjustments for our acquisitions, which represent the reduction of post-acquisition revenues from the write-down of deferred revenue to fair value as of the acquisition date. Post-acquisition, deferred revenues are recognized at the reduced amount, until such time that the subscription is renewed. The impact generally normalizes within a year following the acquisition. The purchase accounting adjustment related to the Constant Contact acquisition, which we refer to as the "Constant Contact purchase accounting adjustment," reduced email marketing segment revenue by approximately $0.5 million and $14.2 million, respectively, for the three and six months ended June 30, 2016.
|
•
|
Changes in our debt service obligations
. In connection with the Constant Contact acquisition in February 2016, we had entered into a $735.0 million incremental first lien term loan facility and a new $165.0 million revolving credit facility (which replaced our existing $125.0 million revolving credit facility), and our wholly owned subsidiary EIG Investors Corp. issued $350.0 million aggregate principal amount of 10.875% senior notes due 2024. These financing arrangements have significantly increased our debt service obligations. We consolidated the incremental first lien term loan with our original first lien term loan as part of the 2017 Refinancing.
|
•
|
Cost efficiencies from 2016 restructuring plan
. Cost efficiencies resulting from the restructuring plan we implemented in connection with the Constant Contact acquisition, which we refer to as the "2016 Constant Contact restructuring plan," were a significant factor in many of our year over year changes.
|
•
|
Our initiatives to consolidate our customer support operations, primarily the transition of customer support formerly based in Orem, Utah to our support center in Tempe, Arizona, which resulted in us incurring duplicate customer support costs and restructuring charges during the period; and
|
•
|
Our reallocation of certain corporate overhead and other costs from the email marketing segment to the web presence segment as we moved email marketing segment resources from roles dedicated to email marketing to roles dedicated to web presence or to functions shared by both segments.
|
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2017
|
2016
|
|
2017
|
||||||||
Revenue
|
$
|
290,713
|
|
|
$
|
292,258
|
|
$
|
527,826
|
|
|
$
|
587,395
|
|
Net income (loss)
|
$
|
(33,430
|
)
|
|
$
|
(35,415
|
)
|
$
|
(19,349
|
)
|
|
$
|
(66,993
|
)
|
Net cash provided by operating activities
|
$
|
53,843
|
|
|
$
|
48,747
|
|
$
|
65,615
|
|
|
$
|
82,422
|
|
•
|
total subscribers;
|
•
|
average revenue per subscriber (“ARPS”);
|
•
|
adjusted EBITDA; and
|
•
|
free cash flow.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Consolidated metrics:
|
|
|
|
|
|
|
|
||||||||
Total subscribers
|
5,480
|
|
|
5,217
|
|
|
5,480
|
|
|
5,217
|
|
||||
Average subscribers for the period
|
5,463
|
|
|
5,261
|
|
|
5,274
|
|
|
5,294
|
|
||||
ARPS
|
$
|
17.74
|
|
|
$
|
18.52
|
|
|
$
|
16.68
|
|
|
$
|
18.49
|
|
Adjusted EBITDA
|
$
|
76,928
|
|
|
$
|
82,544
|
|
|
$
|
116,210
|
|
|
$
|
162,648
|
|
|
|
|
|
|
|
|
|
||||||||
Web presence segment metrics:
|
|
|
|
|
|
|
|
||||||||
Total subscribers
|
4,929
|
|
|
4,687
|
|
|
4,929
|
|
|
4,687
|
|
||||
Average subscribers for the period
|
4,906
|
|
|
4,727
|
|
|
4,838
|
|
|
4,757
|
|
||||
ARPS
|
$
|
13.32
|
|
|
$
|
13.62
|
|
|
$
|
13.58
|
|
|
$
|
13.68
|
|
Adjusted EBITDA
|
$
|
44,305
|
|
|
$
|
36,055
|
|
|
$
|
81,814
|
|
|
$
|
78,436
|
|
|
|
|
|
|
|
|
|
||||||||
Email marketing segment metrics:
|
|
|
|
|
|
|
|
||||||||
Total subscribers
|
551
|
|
|
530
|
|
|
551
|
|
|
530
|
|
||||
Average subscribers for the period
|
557
|
|
|
534
|
|
|
436
|
|
|
537
|
|
||||
ARPS
|
$
|
56.68
|
|
|
$
|
61.88
|
|
|
$
|
51.15
|
|
|
$
|
61.10
|
|
Adjusted EBITDA
|
$
|
32,623
|
|
|
$
|
46,489
|
|
|
$
|
34,396
|
|
|
$
|
84,212
|
|
|
Web presence
|
Email marketing
|
Total
|
|||
|
# Subscribers
|
# Subscribers
|
# Subscribers
|
|||
Total Subscribers June 30, 2016
|
4,929
|
|
551
|
|
5,480
|
|
Acquisitions
|
1
|
|
—
|
|
1
|
|
Light web presence subscribers
|
53
|
|
—
|
|
53
|
|
Adjustments
|
(22
|
)
|
—
|
|
(22
|
)
|
Core subscriber increase (decrease)
|
(274
|
)
|
(21
|
)
|
(295
|
)
|
Total Subscribers June 30, 2017
|
4,687
|
|
530
|
|
5,217
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Consolidated revenue
|
|
$
|
290,713
|
|
|
$
|
292,258
|
|
|
$527,826
|
|
$587,395
|
||||
Consolidated total subscribers
|
|
5,480
|
|
|
5,217
|
|
|
5,480
|
|
|
5,217
|
|
||||
Consolidated average subscribers for the period
|
|
5,463
|
|
|
5,261
|
|
|
5,274
|
|
|
5,294
|
|
||||
Consolidated average revenue per subscriber (ARPS)
|
|
$
|
17.74
|
|
|
$
|
18.52
|
|
|
$
|
16.68
|
|
|
$
|
18.49
|
|
|
|
|
|
|
|
|
|
|
||||||||
Web presence revenue
|
|
$196,041
|
|
$193,172
|
|
$394,089
|
|
$390,520
|
||||||||
Web presence subscribers
|
|
4,929
|
|
|
4,687
|
|
|
4,929
|
|
|
4,687
|
|
||||
Web presence average subscribers for the period
|
|
4,906
|
|
|
4,727
|
|
|
4,838
|
|
|
4,757
|
|
||||
Web presence average revenue per subscriber (ARPS)
|
|
$
|
13.32
|
|
|
$
|
13.62
|
|
|
$
|
13.58
|
|
|
$
|
13.68
|
|
|
|
|
|
|
|
|
|
|
||||||||
Email marketing revenue
|
|
$94,672
|
|
$99,086
|
|
$133,737
|
|
$196,875
|
||||||||
Email marketing subscribers
|
|
551
|
|
|
530
|
|
|
551
|
|
|
530
|
|
||||
Email marketing average subscribers for the period
|
|
557
|
|
|
534
|
|
|
436
|
|
|
537
|
|
||||
Email marketing average revenue per subscriber (ARPS)
|
|
$
|
56.68
|
|
|
$
|
61.88
|
|
|
$
|
51.15
|
|
|
$
|
61.10
|
|
•
|
Revenue from domain-only customers.
We cannot separately quantify revenue attributable to domain-only customers, who are customers that only purchase a domain name from us. Our subscriber definition does not include domain-only customers, which results in generally higher overall ARPS as our revenue used to compute ARPS includes revenue from domain-only customers. Although we cannot separately quantify revenue attributable to domain-only customers, we can measure the total amount of our revenue from domains. Our total revenue from domains, all of which was in our web presence segment, was $31.6 million and $30.7 million for the three months ended June 30, 2016 and 2017, respectively, and $65.2 million and $61.9 million for the six months ended June 30, 2016 and 2017, respectively.
|
•
|
Domain monetization revenue.
This consists principally of revenue from our BuyDomains brand, which provides premium domain name products and services, and, to a lesser extent, revenue from advertisements placed on unused domains (often referred to as “parked” pages) owned by us or our customers.
|
•
|
Revenue from marketing development funds.
Marketing development funds are the amounts that certain of our partners pay us to assist in and incentivize our marketing of their products.
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Consolidated
|
|
|
|
|
|
|
|
|
||||||||
Marketing development fund revenue
|
|
$
|
3,166
|
|
|
$
|
3,160
|
|
|
$
|
6,388
|
|
|
$
|
5,943
|
|
Marketing development funds - contribution to ARPS
|
|
$
|
0.19
|
|
|
$
|
0.38
|
|
|
$
|
0.2
|
|
|
$
|
0.27
|
|
Domain monetization revenue
|
|
$
|
7,443
|
|
|
$
|
6,736
|
|
|
$
|
16,050
|
|
|
$
|
13,602
|
|
Domain monetization revenue - contribution to ARPS
|
|
$
|
0.47
|
|
|
$
|
0.86
|
|
|
$
|
0.51
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
||||||||
Web presence
|
|
|
|
|
|
|
|
|
||||||||
Marketing development fund revenue
|
|
$
|
2,365
|
|
|
$
|
2,356
|
|
|
$
|
4,976
|
|
|
$
|
4,411
|
|
Marketing development funds - contribution to ARPS
|
|
$
|
0.16
|
|
|
$
|
0.17
|
|
|
$
|
0.17
|
|
|
$
|
0.15
|
|
Domain monetization revenue
|
|
$
|
7,443
|
|
|
$
|
6,736
|
|
|
$
|
16,050
|
|
|
$
|
13,602
|
|
Domain monetization revenue - contribution to ARPS
|
|
$
|
0.51
|
|
|
$
|
0.47
|
|
|
$
|
0.54
|
|
|
$
|
0.48
|
|
|
|
|
|
|
|
|
|
|
||||||||
Email marketing
|
|
|
|
|
|
|
|
|
||||||||
Marketing development fund revenue
|
|
$
|
801
|
|
|
$
|
804
|
|
|
$
|
1,412
|
|
|
$
|
1,532
|
|
Marketing development funds - contribution to ARPS
|
|
$
|
0.48
|
|
|
$
|
0.5
|
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Consolidated
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
(33,430
|
)
|
|
$
|
(35,415
|
)
|
|
$
|
(19,349
|
)
|
|
$
|
(66,993
|
)
|
Interest expense, net (1)
|
40,852
|
|
|
45,473
|
|
|
71,089
|
|
|
84,871
|
|
||||
Income tax expense (benefit)
|
(13,931
|
)
|
|
2,628
|
|
|
(113,833
|
)
|
|
8,402
|
|
||||
Depreciation
|
16,760
|
|
|
14,051
|
|
|
29,932
|
|
|
27,162
|
|
||||
Amortization of other intangible assets
|
37,823
|
|
|
34,940
|
|
|
67,697
|
|
|
69,207
|
|
||||
Stock-based compensation
|
15,024
|
|
|
16,245
|
|
|
33,412
|
|
|
29,169
|
|
||||
Restructuring expenses
|
5,663
|
|
|
4,468
|
|
|
17,265
|
|
|
10,096
|
|
||||
Transaction expenses and charges
|
978
|
|
|
193
|
|
|
32,098
|
|
|
773
|
|
||||
Loss (gain) of unconsolidated entities (2)
|
341
|
|
|
(39
|
)
|
|
(10,386
|
)
|
|
(39
|
)
|
||||
Impairment of other long-lived assets
|
6,848
|
|
|
—
|
|
|
8,285
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
76,928
|
|
|
$
|
82,544
|
|
|
$
|
116,210
|
|
|
$
|
162,648
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Web presence
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
(17,461
|
)
|
|
$
|
(33,139
|
)
|
|
$
|
22,673
|
|
|
$
|
(56,766
|
)
|
Interest expense, net (1)
|
18,077
|
|
|
20,294
|
|
|
35,093
|
|
|
37,173
|
|
||||
Income tax expense (benefit)
|
(4,341
|
)
|
|
3,995
|
|
|
(88,598
|
)
|
|
14,544
|
|
||||
Depreciation
|
9,098
|
|
|
10,525
|
|
|
18,075
|
|
|
19,763
|
|
||||
Amortization of other intangible assets
|
19,768
|
|
|
16,375
|
|
|
39,523
|
|
|
32,280
|
|
||||
Stock-based compensation
|
10,429
|
|
|
14,345
|
|
|
25,075
|
|
|
25,445
|
|
||||
Restructuring expenses
|
789
|
|
|
3,699
|
|
|
960
|
|
|
6,036
|
|
||||
Transaction expenses and charges
|
757
|
|
|
—
|
|
|
31,114
|
|
|
—
|
|
||||
Loss (gain) of unconsolidated entities (2)
|
341
|
|
|
(39
|
)
|
|
(10,386
|
)
|
|
(39
|
)
|
||||
Impairment of other long-lived assets
|
6,848
|
|
|
—
|
|
|
8,285
|
|
|
—
|
|
||||
Adjusted EBITDA
|
$
|
44,305
|
|
|
$
|
36,055
|
|
|
$
|
81,814
|
|
|
$
|
78,436
|
|
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
June 30, |
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Email marketing
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(15,969
|
)
|
|
$
|
(2,276
|
)
|
|
$
|
(42,022
|
)
|
|
$
|
(10,227
|
)
|
Interest expense, net (1)
|
22,775
|
|
|
25,179
|
|
|
35,996
|
|
|
47,698
|
|
||||
Income tax expense (benefit)
|
(9,590
|
)
|
|
(1,367
|
)
|
|
(25,235
|
)
|
|
(6,142
|
)
|
||||
Depreciation
|
7,662
|
|
|
3,526
|
|
|
11,857
|
|
|
7,399
|
|
||||
Amortization of other intangible assets
|
18,055
|
|
|
18,565
|
|
|
28,174
|
|
|
36,927
|
|
||||
Stock-based compensation
|
4,595
|
|
|
1,900
|
|
|
8,337
|
|
|
3,724
|
|
||||
Restructuring expenses
|
4,874
|
|
|
769
|
|
|
16,305
|
|
|
4,060
|
|
||||
Transaction expenses and charges
|
221
|
|
|
193
|
|
|
984
|
|
|
773
|
|
||||
Adjusted EBITDA
|
$
|
32,623
|
|
|
$
|
46,489
|
|
|
$
|
34,396
|
|
|
$
|
84,212
|
|
(1)
|
Interest expense includes impact of amortization of deferred financing costs, original issuance discounts and interest income. For the three and six months ended June 30, 2017, it also includes $6.5 million of deferred financing costs and OID immediately expensed upon the 2017 Refinancing.
|
(2)
|
The loss (gain) of unconsolidated entities is reported on a net basis for the three and six months ended June 30, 2016. The six months ended June 30, 2016 includes a gain of
$11.4 million
on our investment in WZ UK Ltd. This gain was generated on January 6, 2016, when we increased our ownership stake in WZ UK Ltd. from 49% to 57.5%, which required
|
•
|
revenue recognition,
|
•
|
goodwill,
|
•
|
long-lived assets,
|
•
|
business combinations,
|
•
|
derivative instruments,
|
•
|
depreciation and amortization,
|
•
|
income taxes,
|
•
|
stock-based compensation arrangements, and
|
•
|
segment information.
|
|
For the Three Months Ended
June 30,
|
|
For the Six Months Ended
June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Revenue
|
$
|
290,713
|
|
|
$
|
292,258
|
|
|
$
|
527,826
|
|
|
$
|
587,395
|
|
Cost of revenue
|
153,077
|
|
|
146,583
|
|
|
289,553
|
|
|
295,332
|
|
||||
Gross profit
|
137,636
|
|
|
145,675
|
|
|
238,273
|
|
|
292,063
|
|
||||
Operating expense:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
80,309
|
|
|
72,106
|
|
|
159,603
|
|
|
144,878
|
|
||||
Engineering and development
|
27,687
|
|
|
20,149
|
|
|
43,942
|
|
|
40,511
|
|
||||
General and administrative
|
34,830
|
|
|
40,580
|
|
|
75,109
|
|
|
79,660
|
|
||||
Transaction expenses
|
978
|
|
|
193
|
|
|
32,098
|
|
|
773
|
|
||||
Total operating expense
|
143,804
|
|
|
133,028
|
|
|
310,752
|
|
|
265,822
|
|
||||
Income (loss) from operations
|
(6,168
|
)
|
|
12,647
|
|
|
(72,479
|
)
|
|
26,241
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Other income (expense)
|
—
|
|
|
—
|
|
|
11,410
|
|
|
—
|
|
||||
Interest income
|
142
|
|
|
185
|
|
|
276
|
|
|
303
|
|
||||
Interest expense
|
(40,994
|
)
|
|
(45,658
|
)
|
|
(71,365
|
)
|
|
(85,174
|
)
|
||||
Total other expense—net
|
(40,852
|
)
|
|
(45,473
|
)
|
|
(59,679
|
)
|
|
(84,871
|
)
|
||||
Income (loss) before income taxes and equity earnings of unconsolidated entities
|
(47,020
|
)
|
|
(32,826
|
)
|
|
(132,158
|
)
|
|
(58,630
|
)
|
||||
Income tax expense (benefit)
|
(13,931
|
)
|
|
2,628
|
|
|
(113,833
|
)
|
|
8,402
|
|
||||
Income (loss) before equity earnings of unconsolidated entities
|
(33,089
|
)
|
|
(35,454
|
)
|
|
(18,325
|
)
|
|
(67,032
|
)
|
||||
Equity loss of unconsolidated entities, net of tax
|
341
|
|
|
(39
|
)
|
|
1,024
|
|
|
(39
|
)
|
||||
Net Income (loss)
|
$
|
(33,430
|
)
|
|
$
|
(35,415
|
)
|
|
$
|
(19,349
|
)
|
|
$
|
(66,993
|
)
|
Total net income (loss) attributable to non-controlling interest
|
(5,390
|
)
|
|
3,714
|
|
|
(13,120
|
)
|
|
7,524
|
|
||||
Net income (loss) attributable to Endurance International Group Holdings, Inc.
|
$
|
(28,040
|
)
|
|
$
|
(39,129
|
)
|
|
$
|
(6,229
|
)
|
|
$
|
(74,517
|
)
|
|
Three Months Ended
March 31,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue
|
$
|
290,713
|
|
|
$
|
292,258
|
|
|
$
|
1,545
|
|
|
1
|
%
|
|
Three Months Ended
June 30,
|
|
|
|||||||||||||||||
|
2016
|
|
2017
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Cost of revenue
|
$
|
153,077
|
|
|
53
|
%
|
|
$
|
146,583
|
|
|
50
|
%
|
|
$
|
(6,494
|
)
|
|
(4
|
)%
|
|
Three Months Ended
June 30,
|
||||||
|
2016
|
|
2017
|
||||
|
(in thousands)
|
||||||
Amortization expense
|
$
|
37,823
|
|
|
$
|
34,940
|
|
Depreciation expense
|
$
|
13,308
|
|
|
$
|
11,950
|
|
Stock-based compensation expense
|
$
|
1,703
|
|
|
$
|
1,661
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
|||||||||||||||
|
2016
|
|
2017
|
|
Change
|
|||||||||||||||
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Gross profit
|
$
|
137,636
|
|
|
47
|
%
|
|
$
|
145,675
|
|
|
50
|
%
|
|
$
|
8,039
|
|
|
6
|
%
|
|
Three Months Ended
June 30,
|
||||||
|
2016
|
|
2017
|
||||
|
(dollars in thousands)
|
||||||
Revenue
|
$
|
290,713
|
|
|
$
|
292,258
|
|
Gross profit
|
$
|
137,636
|
|
|
$
|
145,675
|
|
Gross profit as % of revenue
|
47
|
%
|
|
50
|
%
|
||
Amortization expense as % of revenue
|
13
|
%
|
|
12
|
%
|
||
Depreciation expense as % of revenue
|
5
|
%
|
|
4
|
%
|
||
Stock-based compensation expense as % of revenue
|
1
|
%
|
|
*
|
|
*
|
Less than 1%.
|
|
Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2016
|
|
2017
|
|
Change
|
|||||||||||||||
|
Amount
|
|
%
of Revenue
|
|
Amount
|
|
%
of Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Sales and marketing
|
$
|
80,309
|
|
|
28
|
%
|
|
$
|
72,106
|
|
|
25
|
%
|
|
$
|
(8,203
|
)
|
|
(10
|
)%
|
Engineering and development
|
27,687
|
|
|
10
|
%
|
|
20,149
|
|
|
7
|
%
|
|
(7,538
|
)
|
|
(27
|
)%
|
|||
General and administrative
|
34,830
|
|
|
12
|
%
|
|
40,580
|
|
|
14
|
%
|
|
5,750
|
|
|
17
|
%
|
|||
Transaction expenses
|
978
|
|
|
—
|
%
|
|
193
|
|
|
—
|
%
|
|
(785
|
)
|
|
(80
|
)%
|
|||
Total
|
$
|
143,804
|
|
|
49
|
%
|
|
$
|
133,028
|
|
|
46
|
%
|
|
$
|
(10,776
|
)
|
|
(7
|
)%
|
|
Three Months Ended June 30,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Other income (expense), net
|
$
|
(40,852
|
)
|
|
$
|
(45,473
|
)
|
|
$
|
(4,621
|
)
|
|
11
|
%
|
|
Three Months Ended June 30,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Income tax expense (benefit)
|
$
|
(13,931
|
)
|
|
$
|
2,628
|
|
|
$
|
16,559
|
|
|
(119
|
)%
|
|
Six Months Ended
June 30,
|
|
Change
|
|||||||||||
|
2016
|
|
2017
|
|
Amount
|
|
%
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Revenue
|
$
|
527,826
|
|
|
$
|
587,395
|
|
|
$
|
59,569
|
|
|
11
|
%
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2016
|
|
2017
|
|
Change
|
|||||||||||||||
|
Amount
|
|
%
of
Revenue
|
|
Amount
|
|
%
of
Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Cost of revenue
|
$
|
289,553
|
|
|
55
|
%
|
|
$
|
295,332
|
|
|
50
|
%
|
|
$
|
5,779
|
|
|
2
|
%
|
|
Six Months Ended
June 30,
|
||||||
|
2016
|
|
2017
|
||||
|
(dollars in thousands)
|
||||||
Amortization expense
|
$
|
67,697
|
|
|
$
|
69,207
|
|
Depreciation expense
|
$
|
24,376
|
|
|
$
|
22,897
|
|
Stock-based compensation expense
|
$
|
2,473
|
|
|
$
|
3,167
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2016
|
|
2017
|
|
Change
|
|||||||||||||||
|
Amount
|
|
%
of Revenue
|
|
Amount
|
|
%
of Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Gross profit
|
$
|
238,273
|
|
|
45
|
%
|
|
$
|
292,063
|
|
|
50
|
%
|
|
$
|
53,790
|
|
|
23
|
%
|
|
Six Months Ended
June 30,
|
||||||
|
2016
|
|
2017
|
||||
|
(dollars in thousands)
|
||||||
Revenue
|
$
|
527,826
|
|
|
$
|
587,395
|
|
Gross profit
|
$
|
238,273
|
|
|
$
|
292,063
|
|
Gross profit % of revenue
|
45
|
%
|
|
50
|
%
|
||
Amortization expense % of revenue
|
13
|
%
|
|
12
|
%
|
||
Depreciation expense % of revenue
|
5
|
%
|
|
4
|
%
|
||
Stock-based compensation expense % of revenue
|
*
|
|
|
*
|
|
*
|
Less than 1%.
|
|
Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2016
|
|
2017
|
|
Change
|
|||||||||||||||
|
Amount
|
|
%
of Revenue
|
|
Amount
|
|
%
of Revenue
|
|
Amount
|
|
%
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
Sales and marketing
|
$
|
159,603
|
|
|
30
|
%
|
|
$
|
144,878
|
|
|
25
|
%
|
|
$
|
(14,725
|
)
|
|
(9
|
)%
|
Engineering and development
|
43,942
|
|
|
8
|
%
|
|
40,511
|
|
|
7
|
%
|
|
(3,431
|
)
|
|
(8
|
)%
|
|||
General and administrative
|
75,109
|
|
|
14
|
%
|
|
79,660
|
|
|
14
|
%
|
|
4,551
|
|
|
6
|
%
|
|||
Transaction expense
|
32,098
|
|
|
6
|
%
|
|
773
|
|
|
—
|
%
|
|
(31,325
|
)
|
|
(98
|
)%
|
|||
Total
|
$
|
310,752
|
|
|
59
|
%
|
|
$
|
265,822
|
|
|
45
|
%
|
|
$
|
(44,930
|
)
|
|
(14
|
)%
|
|
For the three months ended,
|
|
|
||||||||||||||||
|
September 30,
2016
|
|
December 31,
2016
|
|
March 31,
2017
|
|
June 30,
2017
|
|
TTM
|
||||||||||
|
(in thousands except ratios)
|
||||||||||||||||||
Net income (loss)
|
$
|
(29,798
|
)
|
|
$
|
(32,082
|
)
|
|
$
|
(31,578
|
)
|
|
$
|
(35,415
|
)
|
|
$
|
(128,873
|
)
|
Interest expense
|
41,208
|
|
|
40,315
|
|
|
39,516
|
|
|
45,658
|
|
|
$
|
166,697
|
|
||||
Income tax expense (benefit)
|
(7,387
|
)
|
|
11,362
|
|
|
5,774
|
|
|
2,628
|
|
|
$
|
12,377
|
|
||||
Depreciation
|
17,010
|
|
|
13,418
|
|
|
13,111
|
|
|
14,051
|
|
|
$
|
57,590
|
|
||||
Amortization of other intangible assets
|
37,982
|
|
|
37,883
|
|
|
34,267
|
|
|
34,940
|
|
|
$
|
145,072
|
|
||||
Stock-based compensation
|
14,806
|
|
|
10,049
|
|
|
12,924
|
|
|
16,245
|
|
|
$
|
54,024
|
|
||||
Integration and restructuring costs
|
7,652
|
|
|
(1,750
|
)
|
|
5,627
|
|
|
4,476
|
|
|
$
|
16,005
|
|
||||
Transaction expenses and charges
|
159
|
|
|
27
|
|
|
580
|
|
|
193
|
|
|
$
|
959
|
|
||||
(Gain) loss of unconsolidated entities
|
5,018
|
|
|
4,803
|
|
|
—
|
|
|
(39
|
)
|
|
$
|
9,782
|
|
||||
Impairment of long-lived assets
|
—
|
|
|
754
|
|
|
—
|
|
|
—
|
|
|
$
|
754
|
|
||||
(Gain) loss on assets, not ordinary course
|
56
|
|
|
(85
|
)
|
|
—
|
|
|
—
|
|
|
$
|
(29
|
)
|
||||
Legal advisory expenses
|
985
|
|
|
1,062
|
|
|
2,111
|
|
|
1,842
|
|
|
$
|
6,000
|
|
||||
Billed revenue to GAAP revenue adjustment
|
3,724
|
|
|
(4,451
|
)
|
|
15,130
|
|
|
1,123
|
|
|
$
|
15,526
|
|
||||
Domain registration cost cash to GAAP adjustment
|
69
|
|
|
(1,005
|
)
|
|
(2,177
|
)
|
|
857
|
|
|
$
|
(2,256
|
)
|
||||
Currency translation
|
209
|
|
|
243
|
|
|
16
|
|
|
(63
|
)
|
|
$
|
405
|
|
||||
Adjustment for acquisitions on a pro forma basis*
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||||
Bank Adjusted EBITDA
|
$
|
91,651
|
|
|
$
|
80,543
|
|
|
$
|
95,301
|
|
|
$
|
86,496
|
|
|
$
|
353,991
|
|
Current portion of notes payable
|
|
|
|
|
|
|
|
|
33,945
|
|
|||||||||
Current portion of capital lease obligations
|
|
|
|
|
|
|
|
|
4,481
|
|
|||||||||
Notes payable - long term
|
|
|
|
|
|
|
|
|
1,936,258
|
|
|||||||||
Capital lease obligations - long term
|
|
|
|
|
|
|
|
|
1,537
|
|
|||||||||
Original issue discounts and deferred financing costs
|
|
|
|
|
|
|
|
|
68,561
|
|
|||||||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Unsecured notes
|
|
|
|
|
|
|
|
|
(350,000
|
)
|
|||||||||
Cash
|
|
|
|
|
|
|
|
|
(81,409
|
)
|
|||||||||
Certain permitted restricted cash
|
|
|
|
|
|
|
|
|
(677
|
)
|
|||||||||
Net senior secured indebtedness
|
|
|
|
|
|
|
|
|
$
|
1,612,696
|
|
||||||||
Net leverage ratio
|
|
|
|
|
|
|
|
|
4.56
|
|
|||||||||
Maximum net leverage ratio
|
|
|
|
|
|
|
|
|
6.25
|
|
*
|
Consists of pro forma adjusted EBITDA for acquired entities on a TTM basis, as adjusted for projected cost savings arising from decisions undertaken by us on or before the acquisition date of the relevant acquisition. This adjustment is revised each fiscal quarter for new acquisitions.
|
|
Six Months Ended June 30,
|
||||||
|
2016
|
|
2017
|
||||
|
(dollars in thousands)
|
||||||
Purchases of property and equipment
|
$
|
(20,961
|
)
|
|
$
|
(19,295
|
)
|
Principal payments on capital lease obligations
|
$
|
(2,896
|
)
|
|
$
|
(3,908
|
)
|
Depreciation
|
$
|
29,932
|
|
|
$
|
27,162
|
|
Amortization
|
$
|
73,113
|
|
|
$
|
74,846
|
|
Cash flows provided by operating activities
|
$
|
65,615
|
|
|
$
|
82,422
|
|
Cash flows used in investing activities
|
$
|
(926,993
|
)
|
|
$
|
(20,788
|
)
|
Cash flows provided by (used in) financing activities
|
$
|
902,326
|
|
|
$
|
(35,898
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2016
|
|
2017
|
|
2016
|
|
2017
|
||||||||
Cash flow from operations
|
$
|
53,843
|
|
|
$
|
48,747
|
|
|
$
|
65,615
|
|
|
$
|
82,422
|
|
Less:
|
|
|
|
|
|
|
|
||||||||
Capital expenditures and capital lease obligations
|
(12,278
|
)
|
|
(11,908
|
)
|
|
(23,857
|
)
|
|
(23,203
|
)
|
||||
Free cash flow
|
$
|
41,565
|
|
|
$
|
36,839
|
|
|
$
|
41,758
|
|
|
$
|
59,219
|
|
|
|
Payments due by period
|
|||||||||||||||
|
|
Total
|
|
Less than 1 year
|
1-3 years
|
3-5 years
|
More than 5 years
|
||||||||||
|
|
(in thousands)
|
|||||||||||||||
Long-term debt obligations:
|
|
|
|
|
|
|
|
||||||||||
Principal payments on term loan facilities and notes
|
|
$
|
2,038,764
|
|
|
$
|
33,945
|
|
$
|
67,890
|
|
$
|
67,890
|
|
$
|
1,869,039
|
|
Total principal payments relating to our long-term debt obligations
|
|
$
|
2,038,764
|
|
|
$
|
33,945
|
|
$
|
67,890
|
|
$
|
67,890
|
|
$
|
1,869,039
|
|
•
|
our ability to successfully carry out our strategic and operational initiatives within our planned timeframes and budget constraints, including initiatives to improve customer satisfaction and retention in our web presence segment by upgrading our products and improving our customer support;
|
•
|
our ability to cost-effectively attract and retain subscribers, particularly subscribers with high long-term revenue potential;
|
•
|
our ability to increase revenue from our existing subscribers;
|
•
|
competition in the market for our products and services, as well as competition for referral and advertising sources;
|
•
|
difficulties in managing multiple platforms or in integrating technologies, products and employees from companies we have acquired, or in migrating acquired subscribers from an acquired company’s platforms to our platforms, any of which may result in subscriber dissatisfaction, an increase in subscriber churn, challenges and delays in rolling out new products to our customer base, difficulties cross-selling products and services to subscribers, compliance challenges and higher compliance costs, and our failure to realize the anticipated benefits from acquisitions;
|
•
|
challenges with our current senior management transition, loss of key employees or difficulties recruiting new employees;
|
•
|
rapid technological change, changing consumer preferences, frequent new product and service introductions, and evolving industry standards, including with respect to how our products and services are marketed to consumers, in how consumers find, purchase and use our products and services and in technology intended to block email marketing;
|
•
|
the amount and timing of capital expenditures, such as investments in our hardware and software systems, as well as extraordinary expenses, such as litigation or other dispute-related settlement payments;
|
•
|
shortcomings or errors in, or misinterpretations of, our metrics, forecasts and data, including those that cause us to fail to anticipate or identify trends in our market;
|
•
|
network security breaches or sabotage resulting in the unauthorized use or disclosure of, or access to, personally identifiable information or other confidential information;
|
•
|
difficulties and costs arising from our international operations and continued international expansion;
|
•
|
changes in legislation or changes to interpretations of existing legislation and regulations by governmental authorities, including changes that affect our collection of sales and use taxes or changes to our business that subject us to taxation in additional jurisdictions;
|
•
|
changes in regulation or to regulatory bodies, such as the Internet Corporation for Assigned Names and Numbers, or ICANN, and U.S. and international regulations governing email marketing and privacy, that could affect our business and our industry, or costs of or our failure to comply with applicable regulations;
|
•
|
failures to comply with industry standards such as the payment card industry data security standards;
|
•
|
litigation or governmental enforcement actions against us, including due to failures to comply with applicable law or regulation;
|
•
|
terminations of, disputes with, or material changes to our relationships with third-party partners, including referral sources, outsourced service providers, product partners, data center providers, payment processors and landlords;
|
•
|
economic conditions negatively affecting the SMB sector and changes in the growth rate of SMBs; and
|
•
|
costs or liabilities associated with any past or future acquisitions, strategic investments or joint ventures.
|
•
|
difficulties or delays in our plans to improve product, customer support and user experience in order to improve customer satisfaction and retention;
|
•
|
the possibility that our planned improvements to product, customer support and user experience, even if successfully implemented in a timely manner, do not result in the positive impact on customer satisfaction and retention that we expect;
|
•
|
our inability to offer solutions that are adequately integrated and customizable to meet the needs of our subscriber base, including due to our failure to adequately improve our technology platforms or invest sufficiently in engineering and development, efficiently introduce new products, or successfully integrate acquired companies;
|
•
|
difficulties or delays in our plans to increase the cross-selling of products across our brands due to challenges with billing, engineering or the fact that not all of our brands operate from the same control panel or other systems;
|
•
|
increased competition in the SMB market, including greater marketing efforts or investments by our competitors in advertising and promoting their brands, and the inability of our subscribers to differentiate our solutions from those of our competitors or our inability to effectively communicate such distinctions;
|
•
|
subscriber dissatisfaction causing our existing subscribers to cancel their subscriptions or stop referring prospective subscribers to us;
|
•
|
increases in our subscriber churn rates or our failure to convert subscribers from introductory, discounted products to full priced solutions;
|
•
|
our failure to develop or offer new or additional products and services in a timely manner that keeps pace with new technologies, competitor offerings and the evolving needs of our subscribers;
|
•
|
perceived or actual security, integrity, reliability, quality or compatibility problems with our solutions, including related to unscheduled downtime, outages or network security breaches;
|
•
|
our inability to maintain awareness of our brands, including due to fragmentation of our marketing efforts due to our historical approach of maintaining a portfolio of multiple brands rather than focusing our resources on a single brand or a few brands;
|
•
|
our inability to provide a consistent user experience, timely and consistent product upgrade schedules and efficient roll-outs of new product offerings for all of our subscribers due to the fact that not all of our brands, products, or services operate from the same control panel or other systems;
|
•
|
changes in search engine ranking algorithms or in search terms used by potential subscribers, either of which may have the effect of increasing our competitors’ search engine rankings or increasing our marketing costs to offset lower search engine rankings;
|
•
|
changes in, or a failure to manage, technology intended to block email marketing;
|
•
|
our inability to market our solutions in a cost-effective manner to new subscribers or to our existing subscribers and to increase our sales to existing subscribers, including due to changes in regulation, or changes in the enforcement of existing regulation that would impair our marketing practices, require us to change our sign-up processes or require us to increase disclosure designed to provide greater transparency as to how we bill and deliver our services;
|
•
|
our inability to penetrate, or adapt to requirements of, international markets, including our inability to obtain or maintain the required licenses to operate in certain international markets;
|
•
|
our inability to enter into automatically renewing contracts with our subscribers or increase subscription prices; and
|
•
|
the decisions by our subscribers to move the hosting of their Internet sites and web infrastructure to their own IT systems, into co-location facilities or to our competitors if we are unable to effectively market the scalability of our solutions; and
|
•
|
our inability to acquire or retain new subscribers through mergers and acquisitions, joint ventures or strategic investments.
|
•
|
localization of the marketing and deployment of our solutions, including translation into foreign languages and adaptation for local practices and regulatory requirements;
|
•
|
lack of familiarity with, burdens of, and increased expense relating to, complying with foreign laws, legal standards, regulatory requirements, tariffs and other barriers, some of which may favor local competitors, including laws related to employment or labor, laws regarding liability of online service providers for activities of subscribers, such as defamation, infringement or other illegal activities, and more stringent laws in foreign jurisdictions relating to the privacy and protection of personal data, as well as potential damage to our reputation as a result of our compliance or non-compliance with such requirements;
|
•
|
difficulties in identifying and managing local staff, systems integrators, technology partners, and other third-party vendors and service providers;
|
•
|
diversion of our management’s attention to staff and manage geographically remote operations and employees;
|
•
|
longer than expected lead times for, or the failure of, an SMB market for our solutions to develop in the countries and regions in which we are opening offices and conducting operations;
|
•
|
our inability to effectively market our solutions to SMBs due to our failure to adapt to local cultural norms, technology standards, billing and collection standards or pricing models;
|
•
|
differing technology practices and needs that we are not able to meet, including an increased demand from our international subscribers that our cloud-based solutions be easily accessible and operational on smartphones and tablets;
|
•
|
difficulties in collecting payments from subscribers or in automatically renewing their contracts with us, especially due to the more limited availability and popularity of credit cards in certain countries;
|
•
|
difficulties in attracting new subscribers, especially in developing countries and regions and those where the Internet infrastructure is still in its early stages;
|
•
|
greater difficulty in enforcing contracts, including our terms of service and other agreements;
|
•
|
management, communication and integration problems resulting from cultural or language differences and geographic dispersion;
|
•
|
sufficiency of qualified labor pools and greater influence of organized labor in various international markets;
|
•
|
competition from companies with international operations, including large international competitors and entrenched local companies;
|
•
|
changes in global currency systems or fluctuations in exchange rates that may increase the volatility of or adversely affect our foreign-based revenue;
|
•
|
compliance by our employees, business partners and other agents with the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the FCPA, economic sanction laws and regulations, including those administered by the U.S. Treasury Department’s Office of Foreign Assets Control, or OFAC, export controls including the U.S. Commerce Department’s Export Administration Regulations and other U.S., non-U.S. and local laws and regulations regarding international and multi-national business operations;
|
•
|
potentially adverse tax consequences, including the complexities of foreign value added tax (or sales, service, use or other tax) systems, our inadvertent failure to comply with all relevant foreign tax rules and regulations due to our lack of familiarity with the jurisdiction’s tax laws, and restrictions and withholdings on the repatriation of earnings;
|
•
|
uncertain political, regulatory and economic climates, which could result in unpredictable or frequent changes in applicable regulations or in the general business environment that could negatively impact us; and
|
•
|
reduced or varied protection for intellectual property rights in some countries.
|
•
|
human error or accidents;
|
•
|
power loss;
|
•
|
equipment failure;
|
•
|
Internet connectivity downtime;
|
•
|
improper building maintenance of the buildings in which our data centers are located, either by us in the case of the data center facility we own or by our landlords in the case of our co-located data center facilities;
|
•
|
physical or electronic security breaches (see also “-Security and privacy breaches may harm our business”);
|
•
|
computer viruses;
|
•
|
fire, hurricane, flood, earthquake, tornado and other natural disasters;
|
•
|
water damage;
|
•
|
terrorism;
|
•
|
intentional bad acts, such as sabotage and vandalism;
|
•
|
pandemics; and
|
•
|
failure by us or our vendors to provide adequate service to our equipment.
|
•
|
On April 17, 2017, we announced that our board of directors and our chief executive officer Hari Ravichandran adopted a CEO transition plan whereby Mr. Ravichandran will remain CEO and serve as a board member while we conduct a search to identify his successor. Given the significant expansion of our business in recent years, the substantial focus on free cash flow generation and risk management, and the previously disclosed SEC investigation regarding non-GAAP metrics, the Board decided, and Mr. Ravichandran agreed, to accelerate CEO succession planning.
|
•
|
On March 1, 2017, Ronald LaSalvia resigned as our president and chief operating officer.
|
•
|
On June 21, 2017, we and Katherine Andreasen mutually agreed that effective September 1, 2017, Ms. Andreasen will no longer serve as our chief administrative officer and chief people officer.
|
•
|
On July 16, 2017, Kenneth Surdan resigned from his position as our chief product officer.
|
•
|
difficulties or delays in integrating the technologies, products, operations, billing systems, personnel or operations of an acquired business and realizing the anticipated benefits of the combined businesses, including both cost synergies and revenue synergies from cross-selling products of the acquired company into our subscriber base, or vice versa;
|
•
|
reliance on third parties for transition services prior to subscriber migration or difficulties in supporting and migrating acquired subscribers, if any, to our platforms, causing potential loss of such subscribers, unanticipated costs and damage to our reputation;
|
•
|
disruption of our ongoing business and diversion of financial, management, operations and customer support resources from existing operations, including as a result of completing acquisitions and evaluating potential acquisitions;
|
•
|
difficulties in applying our controls and risk management and compliance policies and practices to acquired companies and joint ventures;
|
•
|
integration and support of redundant solutions or solutions that are outside of our core capabilities;
|
•
|
the incurrence of additional debt or the issuance of equity securities, resulting in dilution to existing stockholders, in order to fund an acquisition;
|
•
|
assumption of debt or other actual or contingent liabilities of the acquired company, including litigation risk or risks associated with other unforeseen or undisclosed liabilities, or exposure to successor liability for any legal violations of the acquired company;
|
•
|
differences in the standards, procedures, policies, corporate culture and compensation structure of our company and the acquired company, resulting in difficulty assimilating or integrating the acquired organization and its talent, which could lead to unanticipated costs or inefficiencies, morale issues, increased turnover and lower productivity than anticipated, and could also adversely affect the culture of our existing organization;
|
•
|
the price we pay, or other resources that we devote, may exceed the value we realize, or the value we could have realized if we had allocated the purchase price or other resources to another opportunity, or unanticipated costs associated with pursuing acquisitions;
|
•
|
potential loss of an acquired business’ key employees, including those employees who depart prior to transferring to us, or without otherwise documenting, knowledge and information that are important to the efficient operation of the acquired business, and costs associated with efforts to retain key employees;
|
•
|
potential loss of the subscribers or partners of an acquired business due to the actual or perceived impact of the acquisition and related integration activities;
|
•
|
potential loss of subscribers and revenue due to difficulties accessing the information we need to successfully bill acquired subscribers for subscription autorenewals, which can occur due to challenges in transferring merchant processing or PayPal accounts to our control, equipment failure, human error or other factors;
|
•
|
difficulties associated with governance, management and control matters in majority or minority investments or joint ventures, and risk of loss of all or a substantial portion of our investment;
|
•
|
disruption of our business due to sellers, former employees, contractors or third-party service providers of an acquired company or business misappropriating our intellectual property, violating non-competition agreements, or otherwise causing harm to our company;
|
•
|
failure to properly conduct due diligence efforts, evaluate acquisitions or investments or identify liabilities or challenges associated with the companies, businesses or technologies we acquire;
|
•
|
obligations to third parties that arise as a result of the change of control of the acquired company;
|
•
|
adverse tax consequences, including exposure of our entire business to taxation in additional jurisdictions, exposure to substantial penalties, fees and costs if an acquired company failed to comply, or is alleged by regulatory authorities to have failed to comply, with relevant tax rules and regulations prior to our acquisition, or substantial depreciation or deferred compensation charges; and
|
•
|
accounting effects, including potential impairment charges related to long-lived assets, in process research and development, goodwill and other intangible assets and requirements that we record deferred revenue at fair value.
|
•
|
cease selling or using solutions that incorporate the intellectual property that our solutions allegedly infringe;
|
•
|
make substantial payments for legal fees, settlement payments or other costs or damages;
|
•
|
obtain a license or enter into a royalty agreement, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or redesign the allegedly infringing solutions to avoid infringement, which could be costly, time-consuming or impossible. If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement claims against us, our business or operating results could be harmed.
|
•
|
making it more difficult for us to make payments on our indebtedness;
|
•
|
increasing our vulnerability to general adverse financial, business, economic and industry conditions, as well as other factors that are beyond our control;
|
•
|
requiring us to refinance, or resulting in our inability to refinance, all or a portion of our indebtedness at or before maturity, on favorable terms or at all, whether due to uncertain credit markets, our business performance, or other factors;
|
•
|
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, research and development efforts and other general corporate purposes;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate and placing us at a disadvantage compared to our competitors that are less highly leveraged;
|
•
|
restricting our ability to pay dividends on our capital stock or redeem, repurchase or retire our capital stock or indebtedness;
|
•
|
limiting our ability to borrow additional funds;
|
•
|
exposing us to the risk of increased interest rates as certain of our borrowings are, and may in the future be, at variable interest rates;
|
•
|
requiring us to sell assets or incur additional indebtedness if we are not able to generate sufficient cash flow from operations to fund our liquidity needs; and
|
•
|
making it more difficult for us to fund other liquidity needs.
|
•
|
incur additional debt;
|
•
|
make restricted payments (including any dividends or other distributions in respect of our capital stock and any investments);
|
•
|
sell or transfer assets;
|
•
|
enter into affiliate transactions;
|
•
|
create liens;
|
•
|
consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and
|
•
|
take other actions.
|
•
|
low trading volume, which could cause even a small number of purchases or sales of our stock to have an impact on the trading price of our common stock;
|
•
|
price and volume fluctuations in the overall stock market from time to time;
|
•
|
significant volatility in the market price and trading volume of comparable companies;
|
•
|
actual or anticipated changes in our earnings or any financial projections we may provide to the public, or fluctuations in our operating results or in the expectations of securities analysts;
|
•
|
ratings changes by debt ratings agencies;
|
•
|
short sales, hedging and other derivative transactions involving our capital stock;
|
•
|
announcements of technological innovations, new products, strategic alliances, or significant agreements by us or by our competitors;
|
•
|
litigation or regulatory proceedings involving us;
|
•
|
investors’ general perception of us;
|
•
|
changes in general economic, industry and market conditions and trends; and
|
•
|
recruitment or departure of key personnel.
|
•
|
authorizing blank check preferred stock, which could be issued without stockholder approval and with voting, liquidation, dividend and other rights superior to our common stock;
|
•
|
limiting the liability of, and providing indemnification to, our directors and officers;
|
•
|
limiting the ability of our stockholders to call and bring business before special meetings; provided that for so long as investment funds and entities affiliated with Warburg Pincus or Goldman Sachs, collectively, own a majority of our issued and outstanding capital stock, special meetings of our stockholders may be called by the affirmative vote of the holders of a majority of our issued and outstanding voting stock;
|
•
|
providing that any action required or permitted to be taken by our stockholders must be taken at a duly called annual or special meeting of such stockholders and may not be taken by any consent in writing by such stockholders; provided that for so long as investment funds and entities affiliated with either Warburg Pincus or Goldman Sachs, collectively, own a majority of our issued and outstanding capital stock, a meeting and vote of stockholders may be dispensed with, and the action may be taken without prior notice and without such meeting and vote if a written consent is signed by the holders of issued and outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at the meeting of stockholders;
|
•
|
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; provided that no advance notice shall be required for nominations of candidates for election to our board of directors pursuant to our stockholders agreement;
|
•
|
controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings;
|
•
|
providing our board of directors with the express power to postpone previously scheduled annual meetings and to cancel previously scheduled special meetings;
|
•
|
establishing a classified board of directors so that not all members of our board are elected at one time;
|
•
|
establishing Delaware as the exclusive jurisdiction for specified types of stockholder litigation involving us or our directors;
|
•
|
providing that for so long as investment funds and entities affiliated with Warburg Pincus have the right to designate at least three directors for election to our board of directors, certain actions required or permitted to be taken by our stockholders, including amendments to our restated certificate of incorporation or amended and restated bylaws and certain specified corporate transactions, may be effected only with the affirmative vote of 75% of our board of directors, in addition to any other vote required by applicable law;
|
•
|
providing that for so long as investment funds and entities affiliated with Warburg Pincus have the right to designate at least one director for election to our board of directors and for so long as investment funds and entities affiliated with Goldman Sachs have the right to designate one director for election to our board of directors, in each case, a quorum of our board of directors will not exist without at least one director designee of each of Warburg Pincus and Goldman Sachs present at such meeting; provided that if a meeting of our board of directors fails to achieve a quorum due to the absence of a director designee of Warburg Pincus or Goldman Sachs, as applicable, the presence of a director designee of Warburg Pincus or Goldman Sachs, as applicable, will not be required in order for a quorum to exist at the next meeting of our board of directors;
|
•
|
limiting the determination of the number of directors on our board of directors and the filling of vacancies or newly created seats on the board to our board of directors then in office; provided that for so long as investment funds and entities affiliated with either Warburg Pincus or Goldman Sachs have the right to designate at least one director for election to our board of directors, any vacancies will be filled in accordance with the designation provisions set forth in our stockholders agreement; and
|
•
|
providing that directors may be removed by stockholders only for cause by the affirmative vote of the holders of at least 75% of the votes that all our stockholders would be entitled to cast in an annual election of directors; provided that any director designated by investment funds and entities affiliated with either Warburg Pincus or Goldman Sachs may be removed with or without cause only by Warburg Pincus or Goldman Sachs, respectively, and for so long as investment funds and entities affiliated with either Warburg Pincus or Goldman Sachs, collectively, hold at least a majority of our issued and outstanding capital stock, our directors, other than a director designated by investment funds and entities affiliated with either Warburg Pincus or Goldman Sachs, respectively, may be removed with or without cause by the affirmative vote of the holders of a majority of our issued and outstanding capital stock.
|
|
|
ENDURANCE INTERNATIONAL GROUP HOLDINGS, INC.
|
||
|
|
|
||
Date: August 4, 2017
|
|
By:
|
|
/s/ Marc Montagner
|
|
|
|
|
Marc Montagner
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
Exhibit
Number
|
|
Description of Exhibit
|
|
Incorporated by Reference
|
|
Filed
Herewith
|
|||||||
Form
|
|
File Number
|
|
Date of Filing
|
|
Exhibit
Number
|
|
||||||
2.1*
|
|
Agreement and Plan of Merger, dated October 30, 2015, by and among Constant Contact, Inc., the Registrant, and Paintbrush Acquisition Corporation
|
|
8-K
|
|
001-36131
|
|
November 2, 2015
|
|
2.1
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of the Registrant
|
|
S-1/A
|
|
333-191061
|
|
October 23, 2013
|
|
3.3
|
|
|
|
3.2
|
|
Amended and Restated By-Laws of the Registrant
|
|
8-K
|
|
001-36131
|
|
January 30, 2017
|
|
3.1
|
|
|
|
4.1
|
|
Specimen certificate evidencing shares of common stock of the Registrant
|
|
S-1/A
|
|
333-191061
|
|
October 8, 2013
|
|
4.1
|
|
|
|
4.2
|
|
Second Amended and Restated Registration Rights Agreement, dated as of October 24, 2013, by and among the Registrant and the other parties thereto
|
|
10-Q
|
|
001-36131
|
|
November 7, 2014
|
|
4.2
|
|
|
|
4.3
|
|
Stockholders Agreement, dated as of October 24, 2013, by and among the Registrant and certain holders of the Registrant’s common stock
|
|
10-Q
|
|
001-36131
|
|
November 7, 2014
|
|
4.3
|
|
|
|
4.4
|
|
Indenture (including form of Note), dated as of February 9, 2016, among EIG Investors Corp., the Registrant, the Endurance Guarantors party thereto and Wilmington Trust, National Association, as trustee
|
|
8-K
|
|
001-36131
|
|
February 10, 2016
|
|
4.1
|
|
|
|
4.5
|
|
Exchange and Registration Rights Agreement, dated as of February 9, 2016, among EIG Investors Corp., the Registrant, the Endurance Guarantors party thereto, Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC and Jefferies LLC
|
|
10-Q
|
|
001-36131
|
|
May 9, 2016
|
|
4.6
|
|
|
|
10.1#
|
|
Transition, Separation and Release of Claims Agreement, dated April 17, 2017, between Endurance International Group Holdings, Inc. and Hari Ravichandran
|
|
8-K
|
|
001-36131
|
|
April 17, 2017
|
|
10.1
|
|
|
|
10.2#
|
|
2017 Management Incentive Plan
|
|
8-K
|
|
001-36131
|
|
May 16, 2017
|
|
10.1
|
|
|
|
10.3
|
|
Refinancing Amendment to Third Amended and Restated Credit Agreement, dated as of June 14, 2017, among EIG Investors Corp., Endurance International Group Holdings, Inc., the other Loan Parties party thereto, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent
|
|
8-K
|
|
001-36131
|
|
June 14, 2017
|
|
10.1
|
|
|
|
10.4+
|
|
Master Services Agreement between Data Foundry, Inc. and HostGator.com LLC dated October 23, 2014, as amended by the Contract Addendum dated October 23, 2014, the Amendment to the Master Services Agreement dated August 21, 2015, the 2nd Amendment to Master Services Agreement dated July 23, 2016, and the Power Amendment to the Master Services Agreement dated October 25, 2016
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
|
|
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
*
|
Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Endurance agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule or exhibit upon request.
|
#
|
Management contract or any compensation plan, contract or agreement.
|
+
|
Confidential treatment requested as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
|
1.
|
Overview
.
|
2.
|
Delivery of Services; Terms; Fees
.
|
3.
|
Fees and Payment Terms
.
|
4.
|
Confidential Information, Intellectual Property Ownership; License Grants
.
|
5.
|
Data Foundry Representations and Warranties
.
|
6.
|
Customer Obligations
.
|
7.
|
Insurance
.
|
8.
|
Limitations of Liability
.
|
9.
|
Indemnification
.
|
10.
|
Termination
.
|
11.
|
Service Level Agreement
.
|
12.
|
Miscellaneous Provisions
.
|
•
|
Description of Services Order
|
•
|
Exhibit A
|
•
|
Exhibit B
|
DATA FOUNDRY, INC.
, a Texas corporation
|
HOSTGATOR.COM LLC
a
_____
|
Signature:
/s/ Shane Menking
|
Signature:
/s/ John Mone
|
Print Name:
Shane Menking
|
Print Name:
John Mone
|
Title:
President
|
Title:
Chief Information Officer
|
Date:
10/24/2014
|
Date:
10/23/2014
|
|
|
Austin
|
Tel:
|
(512) 684-9000
|
Fax:
|
(512) 684-9001
|
Dallas
|
Tel:
|
(214) 953-1005
|
Fax:
|
(512) 684-9001
|
Houston
|
Tel:
|
(713) 328-8000
|
Fax:
|
(713) 328-8001
|
San Antonio
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Tel:
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(210) 582-4000
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Fax:
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(210) 582-4001
|
Customer Name:
|
Hostgator.com LLC
|
|
Order No:
|
#25445
|
Account Executive:
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[**]
|
|
Terms of Service:
|
first-setup
|
Contract Term:
|
24 months
|
|
Total To Initiate:
|
$ [**]
|
Service Code
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Description
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Unit Setup
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Unit Price
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Qty
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Total
|
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Sub-total $[**]
Tax $[**]
Total $[**]
|
Service Code
|
Description
|
Unit Price
|
Qty
|
Total
|
[**]
|
[**]
|
[**]
|
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[**]
|
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|
[**]
|
Non-Recurring
|
Services
|
Subtotal:
|
$
[**]
|
Monthly-Recurring
|
Services
|
Subtotal:
|
$
[**]
|
Non-Recurring
|
Services
|
Tax:
|
$
[**]
|
Monthly-Recurring
|
Services
|
Tax:
|
$
[**]
|
Non-Recurring
|
Total:
|
|
$
[**]
|
Monthly-Recurring
|
Total:
|
|
$
[**]
|
Austin
|
Tel:
|
(512) 684-9000
|
Fax:
|
(512) 684-9001
|
Dallas
|
Tel:
|
(214) 953-1005
|
Fax:
|
(512) 684-9001
|
Houston
|
Tel:
|
(713) 328-8000
|
Fax:
|
(713) 328-8001
|
San Antonio
|
Tel:
|
(210) 582-4000
|
Fax:
|
(210) 582-4001
|
Customer Name:
|
Hostgator.com
|
LLC
|
Order No:
|
#25445
|
Account Executive:
|
[**]
|
|
Terms of Service:
|
first-setup
|
Contract Term:
|
24 months
|
|
Total To Initiate:
|
$
[**]
|
Provider:
Data Foundry, Inc.
|
Customer:
Hostgator.com LLC
|
Signature:
/s/ Shane Menking
|
Signature:
/s/ John Mone
|
Name:
Shane Menking
|
Name:
John Mone
|
Title:
President
|
Title:
Chief Information Officer
|
Date:
10/24/2014
|
Date:
10/23/2014
|
|
|
Customer Space Specifications
|
VA Capacity
|
Maximum VA Usage
|
[**]
|
[**]
|
[**]
|
VA Usage Range
|
Monthly Charge
|
||
[**]
|
to
|
[**]
|
Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
Greater than [**]
|
Services Suspended
|
|
|
|
Data Foundry, Inc.
1044 Liberty Park Drive Austin, Texas 78746 Tel: (512) 477-4343 Fax:(512) 77-9026 http://www.datafoundry.com |
Data Foundry, Inc.
|
Customer:
Hostgator.com LLC
|
Signature:
/s/ Shane Menking
|
Signature:
/s/ John Mone
|
Name:
Shane Menking
|
Name:
John Mone
|
Title:
President
|
Title:
Chief Information Officer
|
Date:
10/24/2014
|
Date:
10/23/2014
|
|
|
DATA FOUNDRY, INC.
|
HOSTGATOR.COM LLC
|
Signature:
/s/ Shane Menking
|
Signature:
/s/ Dmitry Dovidenko
|
Print Name:
Shane Menking
|
Print Name:
Dmitry Dovidenko
|
Title:
President
|
Title:
Senior Director
|
Date:
8/16/2015
|
Date:
8/21/2015
|
Customer Space Specifications
|
VA Capacity
|
Maximum VA Usage
|
[**]
|
[**]
|
[**]
|
VA Usage Range
|
Monthly Charge
|
||
[**]
|
to
|
[**]
|
Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
Greater than [**]
|
Services Suspended
|
DATA FOUNDRY, INC.
|
HOSTGATOR.COM LLC
|
Signature:
/s/ Shane Menking
|
Signature:
/s/ Kurt Littlefield
|
Print Name:
Shane Menking
|
Print Name:
Kurt Littlefield
|
Title:
Chief Financial Officer
|
Title:
SVP Customer Operations
|
Date:
7/23/2016
|
Date:
7/22/2016
|
|
|
Customer Space Specifications
|
VA Capacity
|
Maximum VA Usage
|
[**]
|
[**]
|
[**]
|
VA Usage Range
|
Monthly Charge
|
||
[**]
|
to
|
[**]
|
Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
[**]
|
to
|
[**]
|
[**]% of Contracted Cost
|
Greater than [**]
|
Services Suspended
|
1.
|
This Amendment hereby supersedes and replaces in its entirety or adds the Power Section of the Agreement by and between the Parties:
|
2.
|
The Definitions Section of the Agreement is hereby amended to add or affirm the following definitions:
|
3.
|
The Non-Solicitation Section of the Agreement is hereby superseded and replaced in its entirety with a new Non-Solicitation which shall read as follows:
|
4.
|
Except as herein modified and amended, all the terms and conditions of the Agreement shall remain in full force and effect, and the execution of this Amendment shall in no event be deemed to constitute a waiver of any right or claim of any of the Parties hereto under, or by virtue of, the Amendment.
|
5.
|
The Amendment may be executed in any number of counterparts and any Party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. An electronically signed copy of an executed counterpart of this Amendment shall be sufficient to evidence the binding agreement of each Party to the terms hereof. However, each Party agrees to return to the other Party an original, duly executed counterpart of this Amendment promptly after delivery of an electronically signed copy thereof.
|
DATA FOUNDRY, INC.
|
Hostgator.com LLC
|
Signature:
/s/ Shane Menking
|
Signature:
/s/ Kurt Littlefield
|
Print Name:
Shane Menking
|
Print Name:
Kurt Littlefield
|
Title:
President
|
Title:
SVP Customer Operations
|
Date:
10/15/2016
|
Date:
10/25/2016
|
|
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 4, 2017
|
|
By:
|
|
/s/ Hari Ravichandran
|
|
|
|
|
Hari Ravichandran
Chief Executive Officer
(Principal Executive Officer)
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 4, 2017
|
|
By:
|
|
/s/ Marc Montagner
|
|
|
|
|
Marc Montagner
Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Endurance International Group Holdings, Inc.
|
|
|
|
|
|
Date: August 4, 2017
|
|
By:
|
|
/s/ Hari Ravichandran
|
|
|
|
|
Hari Ravichandran
Chief Executive Officer
(Principal Executive Officer)
|
(1)
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Endurance International Group Holdings, Inc.
|
|
|
|
|
|
Date: August 4, 2017
|
|
By:
|
|
/s/ Marc Montagner
|
|
|
|
|
Marc Montagner
Chief Financial Officer
(Principal Financial Officer)
|