SACRAMENTO, CA -- 07/24/08 --
InsWeb Corp. (NASDAQ: INSW), a leading
online insurance marketplace, today announced results for the second
quarter ended June 30, 2008.
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 (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 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
Investor Relations Contact:
Jennifer Jarman
The Blueshirt Group
415-217-7722
Email Contact
