SOURCE: InsWeb
InsWeb Reports Second Quarter 2008 Results
Reminder: Conference Call and Webcast Today at 5:00 pm ET; Dial-In: (800) 257-2101
SACRAMENTO, CA--(Marketwire - July 24, 2008) - InsWeb Corp. (
Revenues for the second quarter of 2008 were $8.8 million, an increase of approximately 8% as compared to $8.1 million in the second quarter of 2007. InsWeb reported a net loss for the second quarter of 2008 of $977,000, or $0.21 per diluted share. This compares to net income in the second quarter of 2007 of $214,000, or $0.04 per diluted share.
Adjusted EBITDA, a non-GAAP financial measure used by InsWeb's management and defined below, amounted to a loss of $518,000 in the second quarter of 2008, as compared to income of $715,000 in the second quarter of 2007.
"While we posted a modest year-over-year revenue increase of 8% in the seasonally slower second quarter, our financial performance reflects several unanticipated factors that had a short-term negative impact on our results. These include fluctuations in traffic and carrier participation levels, as well as previously disclosed post-employment contractual obligations and other non-recurring expenses. At the same time, we made strong progress across our key initiatives as we continued to add personnel dedicated to expanding our network of providers, welcomed a seasoned online advertising executive to our senior management team and signed two new syndication partners," stated InsWeb Chairman & CEO Hussein Enan.
"As we look at the second half of the year, we are reaffirming our guidance for 2008 revenue growth of approximately 25%. We are in the process of ramping traffic back up, but given the net loss in the second quarter and uncertainty regarding temporary disruptions in certain states by carriers undergoing rate revisions, we are unlikely to achieve our previous forecast for annual net income growth of 25% and are suspending our bottom-line guidance at this time. Notwithstanding these short-term issues, we had a strong first half of 2008 and have full confidence in our business and the Company's ability to grow profitably," 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
June 30, March 31, June 30,
--------- ---------- ----------
2008 2008 2007
--------- ---------- ----------
Net income (loss) $ (977) $ 670 $ 214
Less
Interest Income 60 89 107
Add
Provision (credit) for income taxes (9) 9 -
Share-based compensation expense 78 334 260
Depreciation and amortization of property,
equipment and intangible assets from
continuing operations 40 34 40
Non-recurring expenses 410 - 308
--------- ---------- ----------
Adjusted EBITDA from continuing
operations $ (518) $ 958 $ 715
========= ========== ==========
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 second quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, July 24, 2008. To participate on the live call, analysts and investors should dial 800-257-2101 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 (
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 Six months ended
June 30, June 30,
--------------------- ---------------------
2008 2007 2008 2007
--------- ---------- --------- ----------
Revenues:
Transactions $ 8,751 $ 8,063 $ 21,722 $ 16,106
Other 58 66 119 133
--------- ---------- --------- ----------
Total revenues 8,809 8,129 21,841 16,239
Operating expenses:
Direct marketing 6,238 4,597 15,543 9,125
Sales and marketing 1,433 1,327 2,728 2,805
Technology 811 777 1,627 1,653
General and administrative 1,373 1,323 2,399 2,225
--------- ---------- --------- ----------
Total operating expenses 9,855 8,024 22,297 15,808
--------- ---------- --------- ----------
Income (loss) from operations (1,046) 105 (456) 431
Interest income 60 107 149 179
Other income (expense), net - 2 - 6
--------- ---------- --------- ----------
Income (loss) before income
taxes (986) 214 (307) 616
Provision (credit) for income
taxes (9) - - -
--------- ---------- --------- ----------
Net income (loss) $ (977) $ 214 $ (307) $ 616
========= ========== ========= ==========
Net income (loss) per share:
Basic $ (0.21) $ 0.05 $ (0.07) $ 0.15
========= ========== ========= ==========
Diluted $ (0.21) $ 0.04 $ (0.07) $ 0.13
========= ========== ========= ==========
Weighted average shares used in
computing net income (loss) per
share:
Basic 4,689 4,340 4,665 4,208
========= ========== ========= ==========
Diluted 4,689 5,267 4,665 4,840
========= ========== ========= ==========
INSWEB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
[Amounts in thousands]
[unaudited]
June 30, December 31,
2008 2007
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 10,674 $ 10,777
Accounts receivable, net 2,360 2,428
Prepaid expenses and other current assets
(including related party receivable of $48
as of December 31, 2007) 469 596
----------- -----------
Total current assets 13,503 13,801
Property and equipment 270 257
Other assets 293 75
----------- -----------
Total assets $ 14,066 $ 14,133
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,288 $ 2,118
Accrued expenses 1,594 1,426
Deferred revenue 239 246
----------- -----------
Total current liabilities 4,121 3,790
Commitments and contingencies
Shareholders' equity:
Common stock 8 8
Paid-in capital 206,117 206,208
Treasury stock (6,334) (6,334)
Accumulated deficit (189,846) (189,539)
----------- -----------
Total shareholders' equity 9,945 10,343
----------- -----------
Total liabilities and
Shareholders' equity $ 14,066 $ 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
----------------------------------------
June 30, March 31, June 30,
------------ ------------ ------------
2008 2008 2007
------------ ------------ ------------
Revenues:
Auto $ 7,266,000 $ 11,197,000 $ 6,566,000
Home/Condo/Renters $ 1,015,000 $ 931,000 $ 373,000
Term Life $ 360,000 $ 485,000 $ 1,107,000
Agent Directory $ 105,000 $ 351,000 $ -
All other $ 5,000 $ 7,000 $ 17,000
------------ ------------ ------------
Total transaction fees $ 8,751,000 $ 12,971,000 $ 8,063,000
# of Consumers:
Auto 2,033,000 2,862,000 1,448,000
Home/Condo/Renters 211,000 184,000 70,000
Term Life 16,000 9,000 14,000
Agent Directory 478,000 719,000 N/M
------------ ------------ ------------
Total 2,738,000 3,774,000 1,532,000
Transaction revenue per consumer:
Auto $ 3.57 $ 3.91 $ 4.53
Home/Condo/Renters $ 4.81 $ 5.06 $ 5.33
Auto Segment B Revenue per Click $ 6.26 $ 6.70 $ 6.24
Avg. Times Lead Sold- (Auto and
Home) 3.7 3.7 N/M
Agent Network (Auto and Home):
Carrier Sponsored Agents N/A 2,390 N/M
AgentInsider Approved Agents 6,402 5,764 4,742
Direct Marketing Costs: $ 6,238,000 $ 9,305,000 $ 4,597,000
Marketing Costs Per Consumer:
Total $ 2.28 $ 2.47 $ 3.00
Excluding Agent Directory $ 2.71 $ 2.90 $ 3.00
Direct Marketing Costs as a
percent of Revenues: 71% 71% 57%
Cash and Cash Equivalents: $ 10,674,000 $ 12,161,000 $ 8,293,000
Account Receivable: $ 2,360,000 $ 3,548,000 $ 3,658,000
Day Sales Outstanding (DSO): 31 21 40
Staffing: 84 72 64
Definitions:
"# of consumers" Represents consumers acquired from marketing
activities
"Per Consumer Represents Revenues earned or marketing costs
Information" 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 Carriers buying leads through InsWeb on behalf of
Agents" their Agents
"AgentInsider approved # of agents approved to buy leads through
Agents" 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