Enom 2013 Annual Report Download - page 67

revenue and deferred registry fees were primarily due to growth in our Registrar service during the period. The increase in accrued expenses is
reflective of increases in amounts due to certain vendors and our employees resulting from growth in our business. The increase in our accounts
receivable reflects growth in advertising revenue including a higher mix of balances from brand advertising sales.
Year ended December 31, 2011
Net cash inflows from our operating activities was $85.3 million, an increase of 38% or $23.7 million compared to the prior year. Our net
loss during the period was $(18.5) million, which included non-cash charges of $100.4 million such as depreciation, amortization, stock-based
compensation and defe rred taxes. The remainder of our sources of net cash flow from operating activities was from changes in our working
capital, including increases in deferred revenue, accounts payable and accrued expenses of $14.8 million, offset in part by increases in accounts
receivable, deferred registration costs and deposits with registries of $13.3 million. The increases in our deferred revenue and deferred registry
fees were primarily due to growth in our Registrar service during the period. The increase in accrued expenses is reflective of increases in
amounts due to certain vendors and our employees resulting from growth in our business. The increase in our accounts receivable reflects growth
in advertising revenue including a higher mix of balances from brand advertising sales.
Cash Flow from Investing Activities
Years ended December 31, 2013, 2012 and 2011
Net cash used in investing activities was $1 14.5 million, $67.5 million and $98.5 million during the years ended December 31, 2013,
2012 and 2011, respectively. Cash used in investing activities during the years ended December 31, 2013, 2012 and 2011 included investments
in our intangible assets of $16.8 million, $13.2 million and $49.3 million, respectively, primarily comprising of media content. Cash used in
investing activities included investments in property and equipment of $26.7 million, $17.7 million and $18.2 million during the year ended
December 31, 2013, 2012 and 2011, respectively. These expenditures included investments in servers and IT equipment, fixtures and fittings,
leasehold improvements and internally developed software. Cash flows used in investing activities in 2013 included the acquisitions of a total
purchase price of $94.3 for Society6 and $8.0 million for Creativebug. Business acquisitions made during the year ended December 31, 2012
included Name.com for total purchase consideration of $18.0 million, as well as $1.3 million of deferred consideration for acquisitions made in
prior years.. Name.com was acquired to expand our registrar platform as we prepare for the historic release of new gTLDs. Business acquisitions
made during the year ended December 31, 2011 included RSS Graffiti for total purchase consideration of $16.3 million and IndieClick Media
Group for total purchase consideration of $13.0 million. RSS Graffiti was acquired to enhance our social media service offering and the
IndieClick Media Group was acquired to expand our sales organization with particular focus on online properties in the entertainment, music,
film, fashion and comedy categories. Cash invested in purchases of intangible assets and property and equipment, including internally developed
software, was largely to support the growth of our business and infrastructure during these periods.
Cash Flow from Financing Activities
Years ended December 31, 2013, 2012 and 2011
Net cash provided by (used in) financing activities was $89.0 million, $(6.6) million and $66.9 million during the years ended
December 31, 2013, 2012 and 2011, respectively. During the years ended December 31, 2013, 2012 and 2011 we repurchased 0.6 million,
1.1 million and 2.3 million shares of common stock at a cost of $4.8 million, $8.9 million and $17.1 million, respectively, under our share
repurchase plan. During the years ended December 31, 2013, 2012 and 2011 we received proceeds of $4.7 million, $12.5 million and $7.6
million, respectively, from the exercise of employee stock options and contributions from participants in our Employee Stock Purchase Plan and
we incurred $4.6 million, $9.5 million and $0.7 million, respectively, of costs related to net taxes paid on employee stock options exercises and
RSUs vesting. Cash provided from financing activities in the year ended December 31, 2011 included $78.5 million in net proceeds from our
initial public offering net of issuance costs of $3.3 million paid in that period. We also incurred $1.0 million of costs related to the replacement
of our previous credit facility with our Credit Agreement in 2011 which provides for a $105 million, five year revolving loan facility, with the
right (subject to certain conditions) to increase such facility by up to $75 million in the aggregate. The syndicate of commercial banks under the
Credit Agreement has no obligation to fund any increase in the size of the facility. The activity for the year ended December 31, 2013, includes
the Credit Agreement that replaced the revolver, providing for a Term Loan facility of $100.0 million and a $125.0 million Revolving Loan
Facility. We drew down all of the Term Loan Facility during 2013 and also incurred costs of $1.9 million related to the Credit Agreement.
From time to time, we expect to receive cash from the exercise of employee stock options in our common stock. Proceeds from the
exercise of employee stock options will vary from period-to-period based upon, among other factors, fluctuations in the market value of our
common stock relative to the exercise price of such stock options.
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