SOURCE: InsWeb
October 23, 2008 16:15 ET
InsWeb Reports Third Quarter 2008 Results
-- Reminder: Conference Call and Webcast Today at 5:00 pm ET; Dial-In: (800) 867-1054
SACRAMENTO, CA--(Marketwire - October 23, 2008) - InsWeb Corp. (NASDAQ: INSW), a leading
online insurance marketplace, today announced results for the third quarter
ended September 30, 2008.
Revenues for the third quarter of 2008 were $9.0 million, an increase of
approximately 2.3% as compared to $8.8 million in the second quarter of
2008 and a decrease of approximately 2.4% as compared to $9.2 million in
the third quarter of 2007. InsWeb reported a net loss for the third
quarter of 2008 of $552,000, or $0.12 per diluted share. This compares to
a net loss in the second quarter of 2008 of $977,000 or $0.21 per diluted
share, and to net income in the third quarter of 2007 of $464,000, or $0.08
per diluted share.
Adjusted EBITDA, a non-GAAP financial measure used by InsWeb's management
and defined below, was a loss of $432,000 in the third quarter of 2008, as
compared to a loss of $518,000 in the second quarter of 2008 and to income
of $692,000 in the third quarter of 2007.
"While we posted modest gains in revenue and net loss on a sequential
basis, our strong progress in signing up new agencies and carriers could
not offset some near-term challenges during the third quarter," stated
InsWeb Chairman & CEO Hussein Enan. "On the consumer side, we began to
experience reduced demand, as fewer people bought cars and houses or moved,
three primary reasons for shopping for insurance. On the provider side, we
felt the first full quarter impact of ongoing disruptions in lead flow from
certain carriers undergoing rate revisions or other transitions. At the
same time, we grew our agency base 38% over the comparable period last
year, expanded our platform with the addition of two new carriers and two
new aggregators, and increased our total number of syndication partnerships
to five. We also made strides in creating new channels to deliver and
monetize traffic more effectively, including the development of a new
consumer-centric insurance-related destination site under the
insurancerates.com domain acquired last quarter, which will launch in the
first quarter of 2009."
"Given the current dynamics affecting our business and our inability to
predict the extent to which they will be balanced by the new carriers,
agencies and aggregators we have recently added and continue to add, we are
unable to effectively gauge our revenue potential for the seasonally slower
fourth quarter. While we are confident that InsWeb will post double-digit
revenue growth over 2007, it is likely that we will fall short of our
previous goal of 25% annual revenue growth. We expect to exit the year with
a clean and strong balance sheet, a healthy cash position, and no debt. We
remain very excited about the future of our business and the initiatives we
have in place to drive revenues and profits over the long-term," concluded
Mr. Enan.
Non-GAAP Financial Information
In evaluating InsWeb's business, the Company's management considers and
uses Adjusted EBITDA as a supplemental measure of operating performance.
Adjusted EBITDA refers to a financial measure that the Company defines as
net income (loss) excluding interest, taxes, depreciation, amortization,
share-based compensation, and other non-recurring gains and losses that are
not related to the Company's continuing operations. This measure is an
essential component of InsWeb's internal planning process because it
facilitates period-to-period comparisons of the Company's operating
performance by eliminating potential differences in net income (loss)
caused by the existence and timing of non-cash charges and non-recurring
gains and losses. Furthermore, Adjusted EBITDA reflects the key revenue
and expense items for which InsWeb's operating managers are responsible.
InsWeb Corporation
NON-GAAP FINANCIAL MEASURE AND RECONCILIATION
(In thousands)
(unaudited)
Three months Ended
September 30, June 30, September 30,
------------ ------- ------------
2008 2008 2007
------------ ------- ------------
Net income (loss) $ (552) $ (977) $ 464
Less
Interest income 47 60 108
Add
Income tax benefit (44) (9) -
Share-based compensation expense 164 78 264
Depreciation and amortization of
property, equipment and
intangible assets from
continuing operations 47 40 37
Non-recurring expenses - 410 35
------------ ------- ------------
Adjusted EBITDA from
continuing operations $ (432) $ (518) $ 692
============ ======= ============
Adjusted EBITDA is not a measurement of the Company's financial performance
under U.S. GAAP and has limitations as an analytical tool. You should not
consider it in isolation or as a substitute for the Company's U.S. GAAP net
income (loss). The principal limitations of this measure are that: 1) it
does not reflect the Company's actual expenses and may thus have the effect
of inflating or reducing the Company's net income (loss) and net income
(loss) per share; and 2) it may not be comparable to Adjusted EBITDA as
reported by other companies.
Earnings Call Information
The InsWeb third quarter teleconference and webcast is scheduled to begin
at 2:00 p.m., Pacific Time, on Thursday, October 23, 2008. To participate
on the live call, analysts and investors should dial 800-867-1054 at least
ten minutes prior to the call. InsWeb will also offer a live and archived
webcast of the conference call, accessible from the "Investor Relations"
section of the Company's Web site at
http://investor.insweb.com/index.cfm.
About InsWeb
InsWeb (NASDAQ: INSW) enables consumers to compare multiple, actionable
quotes for auto, term life, health, homeowners, renters and condominium
insurance offerings from many of the nation's highly rated insurers. The
top-rated online insurance marketplace also provides interactive tools and
independent research. Headquartered in Sacramento, Calif., InsWeb is
accessible at www.insweb.com.
For further information regarding InsWeb Corporation, please review the
Company's filings with the Securities and Exchange Commission, including
Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K, and in
particular Management's Discussion and Analysis of Financial Condition and
Results of Operations.
This news release contains forward-looking statements reflecting
management's current forecast of certain aspects of the Company's future.
It is based on current information, which we have assessed, but which by
its nature is dynamic and subject to rapid and even abrupt changes.
Forward-looking statements include statements expressing the intent, belief
or current expectations of the Company and members of our management team
regarding: projected future revenues, revenue growth, expenses,
profitability and financial position; marketing and consumer acquisition;
the results of strategic initiatives, including AgentInsider and the Agent
Directory; increased or decreased participation by insurance companies,
agents and other purchasers of consumer leads; and product and
technological implementations. The Company's actual results might differ
materially from those stated or implied by such forward-looking statements
due to risks and uncertainties associated with the Company's business,
which include, but are not limited to: variations in consumer usage of the
internet to shop for and purchase insurance; the willingness and capability
of insurance companies or other insurance entities to offer their products
or instant quotes on the Company's website or through the Company's
licensed subsidiaries; changes in the Company's relationships with existing
insurance companies or other customers, including, changes due to
consolidation within the insurance industry; changes in the Company's
relationship with strategic and/or marketing partners; the Company's
ability to attract and integrate new insurance providers and strategic
partners; implementation of competing Internet strategies by existing and
potential competitors; implementation and consumer acceptance of new
product or service offerings; the outcome of litigation in which the
Company is a party; insurance and financial services industry regulation;
fluctuations in operating results; or other unforeseen factors. The
forward-looking statements should be considered in the context of these and
other risk factors disclosed in the Company's filings with the Securities
and Exchange Commission.
"INSWEB" and "AGENTINSIDER" are registered service marks of InsWeb
Corporation. All marks above are those of InsWeb Corporation, except for
those of insurance insurers, brokers, agents, industry organizations,
financial institutions, online partners, service providers, other mentioned
companies and educational institutions, which are the marks of their
respective entities.
INSWEB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
[Amounts in thousands, except per share amounts]
[unaudited]
Three months ended Nine months ended
September 30, September 30,
------------------- -------------------
2008 2007 2008 2007
-------- --------- -------- ---------
Revenues:
Transactions $ 8,955 $ 9,167 $ 30,677 $ 25,273
Other 55 64 174 197
-------- --------- -------- ---------
Total revenues 9,010 9,231 30,851 25,470
Operating expenses:
Direct marketing 6,497 5,899 22,040 15,024
Sales and marketing 1,505 1,251 4,233 4,056
Technology 774 691 2,401 2,344
General and administrative 877 1,034 3,276 3,259
-------- --------- -------- ---------
Total operating expenses 9,653 8,875 31,950 24,683
-------- --------- -------- ---------
Income (loss) from operations (643) 356 (1,099) 787
Interest income 47 108 196 287
Other income (expense), net - - - 6
-------- --------- -------- ---------
Income (loss) before income taxes (596) 464 (903) 1,080
Income tax benefit (44) - (44) -
-------- --------- -------- ---------
Net income (loss) $ (552) $ 464 $ (859) $ 1,080
======== ========= ======== =========
Net income (loss) per share:
Basic $ (0.12) $ 0.10 $ (0.18) $ 0.25
======== ========= ======== =========
Diluted $ (0.12) $ 0.08 $ (0.18) $ 0.21
======== ========= ======== =========
Weighted average shares used in
computing net income (loss) per
share:
Basic 4,703 4,495 4,677 4,331
======== ========= ======== =========
Diluted 4,703 5,515 4,677 5,108
======== ========= ======== =========
INSWEB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
[Amounts in thousands]
[unaudited]
September 30, December 31,
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 9,125 $ 10,777
Accounts receivable, net 2,410 2,428
Related party receivables 302 48
Prepaid expenses and other current assets 1,240 548
----------- -----------
Total current assets 13,077 13,801
Property and equipment 284 257
Other assets 281 75
----------- -----------
Total assets $ 13,642 $ 14,133
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,338 $ 2,118
Accrued expenses 1,107 1,426
Deferred revenue 267 246
----------- -----------
Total current liabilities 3,712 3,790
Commitments and contingencies
Shareholders' equity:
Common stock 8 8
Paid-in capital 206,655 206,208
Treasury stock (6,334) (6,334)
Accumulated deficit (190,399) (189,539)
----------- -----------
Total shareholders' equity 9,930 10,343
----------- -----------
Total liabilities and shareholders' equity $ 13,642 $ 14,133
=========== ===========
The following financial highlights and key metrics are provided as a
resource for our investors. Please refer to the Company's filings with the
Securities and Exchange Commission for additional information regarding our
business.
Three months Ended
----------------------------------------
September 30, June 30, September 30,
------------ ------------ ------------
2008 2008 2007
------------ ------------ ------------
Revenues:
------------ ------------ ------------
Auto $ 7,574,000 $ 7,266,000 $ 7,995,000
------------ ------------ ------------
Home/condo/renters $ 862,000 $ 1,015,000 $ 554,000
------------ ------------ ------------
Term life $ 377,000 $ 360,000 $ 611,000
------------ ------------ ------------
Agent Directory $ 134,000 $ 105,000 N/A
------------ ------------ ------------
All other $ 8,000 $ 5,000 $ 7,000
------------ ------------ ------------
Total transaction fees $ 8,955,000 $ 8,751,000 $ 9,167,000
------------ ------------ ------------
# of Consumers:
------------ ------------ ------------
Auto 2,245,000 2,033,000 1,802,000
------------ ------------ ------------
Home/condo/renters 212,000 211,000 150,000
------------ ------------ ------------
Term life 17,000 16,000 14,000
------------ ------------ ------------
Agent Directory 383,000 478,000 N/A
------------ ------------ ------------
Total 2,857,000 2,738,000 1,966,000
------------ ------------ ------------
Transaction revenue per consumer:
------------ ------------ ------------
Auto $ 3.37 $ 3.57 $ 4.44
------------ ------------ ------------
Home/condo/renters $ 4.06 $ 4.81 $ 3.69
------------ ------------ ------------
------------ ------------ ------------
Auto Segment B revenue per click $ 6.30 $ 6.26 $ 6.49
------------ ------------ ------------
Avg. times lead sold- (auto and
home) 3.93 3.66 N/M
------------ ------------ ------------
Agent network (auto and home):
------------ ------------ ------------
Agent Insider approved agents 6,775 6,402 4,902
------------ ------------ ------------
------------ ------------ ------------
Direct marketing costs: $ 6,497,000 $ 6,238,000 $ 5,899,000
------------ ------------ ------------
------------ ------------ ------------
Marketing costs per consumer:
------------ ------------ ------------
Total $ 2.27 $ 2.28 $ 3.00
------------ ------------ ------------
Excluding Agent Directory $ 2.59 $ 2.71 $ 3.00
------------ ------------ ------------
Direct marketing costs as a
percent of revenues: 72% 71% 64%
------------ ------------ ------------
------------ ------------ ------------
Cash and cash equivalents: $ 9,125,000 $ 10,674,000 $ 8,491,000
------------ ------------ ------------
Accounts receivable: $ 2,410,000 $ 2,360,000 $ 5,104,000
------------ ------------ ------------
Days sales outstanding (DSO): 24 31 43
------------ ------------ ------------
Staffing: 89 84 59
------------ ------------ ------------
Definitions:
"# of consumers" Represents consumers acquired from
marketing activities
"Per consumer information" Represents Revenues earned or marketing
costs incurred per consumer who has
started a quote form
"Segment B" Auto Insurance consumers classified as
non-standard (bad driving record, not
enough experience, or not permanently
insured for 3 years)
"Avg. times lead sold" Total # of times a lead is sold,
including leads sold by NetQuote on our
behalf
"Carrier-sponsored agents" Carriers buying leads through InsWeb on
behalf of their Agents
"AgentInsider approved agents" # of agents approved to buy leads
through AgentInsider
"Direct marketing costs" Represents expenses incurred by InsWeb
to drive the consumers to InsWeb's
online insurance marketplace
"N/M" Information not meaningful
"N/A" Information not available