SACRAMENTO, Calif., Oct. 17, 2001 (PRIMEZONE) -- InsWeb Corp. (Nasdaq:INSW) today announced results for the quarter ended September 30, 2001, reporting revenues of $5.8 million. This compares to revenues of $4.2 million during the same quarter last year, and to $5.6 million during the previous quarter ended June 30, 2001.
InsWeb posted a net loss of $6.9 million, or $0.16 per share, during the quarter ended September 30, 2001. This compares to a net loss of $10.8 million, or $0.31 per share, for the third quarter last year, and to $7.2 million, or $0.17 per share, for the second quarter ended June 30, 2001.
"We are pleased to report revenues for the third quarter which are above our expectations and reflect gradually improving business conditions, with strong interest among consumers for InsWeb's online insurance offerings," said Hussein Enan, chief executive officer of InsWeb. "We continue to execute well on an operating basis, controlling our expenses and making solid progress across our key performance metrics. Our business continues to move in the right direction, and we remain on track to achieve profitability without the need for additional financing."
Revenue Highlights for the Quarter Ended:
Sept 30, 2001 June 30, 2001 Sept 30, 2000
---------- ---------- ----------
Transaction revenues:
Auto insurance $3,306,000 $3,412,000 $2,866,000
Term life insurance 1,411,000 1,144,000 544,000
Other insurance
offerings 241,000 189,000 228,000
---------- ---------- ----------
4,958,000 4,745,000 3,638,000
Auto insurance agency
revenues 449,000 444,000 130,000
Development and
maintenance fees 423,000 372,000 462,000
---------- ---------- ----------
Total revenues $5,830,000 $5,561,000 $4,230,000
========== ========== ==========
Marketing Metrics for the Quarter Ended:
Sept 30, 2001 June 30, 2001 Sept 30, 2000
---------- ---------- ----------
Visitor Sessions 3,384,000 3,437,000 2,899,000
Completed Shopping
Sessions 731,000 695,000 446,000
Direct marketing costs $4,608,000 $4,344,000 $4,206,000
Other Financial Highlights:
-- Cash and short-term investments amounted to $37 million at
Sept. 30, 2001;
-- Accounts receivable at quarter end were $3.2 million, and
represented 49 days sales outstanding;
-- There were 42.2 million common shares outstanding at Sept. 30,
2001; and
-- Total headcount is currently 184, compared to 188 at
June 30, 2001.
"Consumer demand continued at record levels, which we believe is a result of several factors, including auto insurers pushing through rate increases in recent months, and consumers re-assessing their insurance needs," said Mark Guthrie, president and chief operating officer of InsWeb. "Additionally, we continue to receive positive feedback from participating carriers regarding business from the InsWeb channel and are pleased to see our carrier partners resume plans to expand their offerings geographically. Our focus within our agency continues to remain on measured growth, and as demonstrated by the number of policies sold, we are having success in improving the efficiency of our existing agents and resulting close rates."
Operating Highlights
-- Consumer demand remained strong. The company recorded
approximately 3.4 million visitor sessions and 731,000 completed
shopping sessions during the quarter.
-- InsWeb renewed its online marketing distribution agreement with
Yahoo! and added Lycos, iWon.com, and AutoTrader, among others, as
new online distribution partners.
-- The Company's auto offering improved, with greater insurer
participation in more states.
-- The Company's term life offering is and has been a mature
marketplace that is providing the typical consumer an optimal
number of quotes. While there will be ongoing fluctuations in the
term life marketplace characteristics, the Company believes the
overall offering has continued to meet or exceed consumer
expectations.
-- The Company continued to make improvements in its agency offerings
and operating efficiencies, which resulted in a 21% increase in
closed policies in the third quarter compared with the second
quarter.
Auto Marketplace Characteristics for the Quarter Ended:
Sept 30, 2001 June 30, 2001 March 31, 2001
------------- ------------- --------------
Average Quotes Viewed 2.5 2.1 2.3
Average Instant Quotes
Viewed 2.1 1.6 1.8
Participating Auto
Insurers 24 25 23
Insurer / State
Combinations 266 252 216
Term Life Marketplace Characteristics for the Quarter Ended:
Sept 30, 2001 June 30, 2001 March 31, 2001
------------- ------------- --------------
Average Instant
Quotes Viewed 7.0 7.3 7.1
Participating Term
Life Insurers 14 16 15
Insurer / State
Combinations 488 534 557
Auto Agency Metrics for the Quarter Ended:
Sept 30, 2001 June 30, 2001 March 31, 2001
------------- ------------- --------------
Participating
Auto Insurers(1) 10 10 7
Insurer / State
Combinations (1) 39 35 16
New Policies Sold 3,604 2,971 2,897
(1) Auto Agency Metrics are a subset of the overall Auto Marketplace
Characteristics.
Definitions:
"Visitor Session"
Represents a consumer hit on the InsWeb site from any source;
"Completed Shopping Session"
Occurs when a consumer has completed one of InsWeb's quote forms;
"Direct Marketing Costs"
Represents expenses incurred by the company to drive consumer
traffic to InsWeb's online insurance marketplace;
"Average Quotes Viewed"
The average number of instant and/or e-mail quotes viewed by
consumers who have completed a quote form and requested quotes;
"Average Instant Quotes Viewed"
The average number of quotes appearing immediately on InsWeb's
Quote Page for consumers who have completed a quote form and
requested quotes;
"Insurer / State combinations"
Represents the total number of insurers providing quotes in each
state, summed across all states.
Business Outlook
The following forward-looking statements reflect InsWeb management's expectations as of October 17, 2001. Given the potential changes in general economic conditions and consumer spending, the emerging nature of the online marketplace, and various other risk factors, actual results may differ materially.
"While our cash consumption was flat with the previous quarter, ongoing cost controls are firmly in place and we expect to achieve reductions in the cash burn rate going forward, until we achieve cash flow break-even in 2003," said Bill Griffin, InsWeb's chief financial officer. "Based on continued strong consumer demand and our solid performance in the third quarter, we are expecting a somewhat better fourth quarter than previously anticipated; however, we continue to forecast a sequential decline in revenues to reflect a traditionally slower quarter for insurance during the holiday season."
Guidance for the quarter ending Dec. 31, 2001:
-- Completed shopping sessions for the quarter are expected to be
between 575,000 and 625,000;
-- Revenues are expected to be between $4.2 million and $4.8 million;
and
-- The company's net loss from operations is expected to be between
$5.6 million and $6.4 million, or between $0.13 per share and
$0.15 per share.
Guidance for the year ending Dec. 31, 2001:
-- Revenues are expected to be between $22.7 million and $23.3
million;
-- The company's net loss from operations is expected to be between
$25.2 million and $26.0 million, or between $0.60 per share and
$0.62 per share.
The company reaffirmed its cash flow breakeven target within the second half of 2003. "Our profitability target is based on a conservative model reflecting modest revenue growth and a continued focus on cost control," continued Mr. Griffin. "We continue to believe we will achieve our cash flow breakeven goal without the need for additional capital, and may reach our target ahead of schedule should consumer demand continue to grow and insurer participation in our marketplace continue to expand."
Board Approves Reverse Stock Split
InsWeb also announced that it has sought stockholder approval for a reverse split of the Company's outstanding common stock. The Company's Board of Directors has approved the reverse stock split but still must determine the exact ratio, within the parameters to be approved by the stockholders. The Company has mailed a proxy statement to stockholders declaring a special stockholders' meeting on October 29, 2001, at which time the proposal will be considered.
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 live customer service, interactive tools and independent research. Headquartered in Sacramento, Calif., InsWeb is accessible at www.insweb.com and through such prominent sites as MSN, Quicken.com, Lycos and Yahoo!
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 regarding: projected future revenues and financial position; optimism about consumer activity and the results of certain strategic initiatives; product and technological implementations; and projected expenditures and growth. 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 demand or acceptance; the willingness and capability of insurance companies to offer their products or instant quotes over the Internet; further changes in the Company's relationships with existing insurance companies and/or strategic partners; the Company's ability to attract and integrate new insurance companies and strategic partners; implementation of competing Internet strategies by existing and potential insurance Company participants; implementation and acceptance of new product or service offerings, such as policy fulfillment and other agency based services; the outcome of litigation in which the Company is a party; implementation and acceptance of new initiatives in the U.S. and abroad; insurance and financial services industry regulation; competition in all aspects of the Company's business; 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" is a registered service mark of InsWeb Corporation. All marks above are those of InsWeb Corporation, except for those of insurance carriers, 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 net loss per share)
(unaudited)
Three months ended Nine months ended
September 30, September 30,
-------------------- --------------------
2001 2000 2001 2000
-------- -------- -------- --------
Revenues:
Transactions $ 4,958 $ 3,638 $ 15,945 $ 14,211
Agency commissions 449 130 1,231 531
Development and
maintenance fees 423 462 1,371 3,065
-------- -------- -------- --------
Total revenues 5,830 4,230 18,547 17,807
Operating expenses:
Technology 3,523 5,951 11,400 18,954
Sales and marketing 7,185 6,168 20,653 27,409
General and
administrative 1,731 3,223 5,865 8,979
Amortization of
intangible assets 655 40 1,802 1,110
Amortization of
stock-based compensation 48 186 178 797
Impairment of goodwill
and other intangibles -- -- -- 4,418
Restructuring charge -- 638 -- 2,167
-------- -------- -------- --------
Total operating expenses 13,142 16,206 39,898 63,834
-------- -------- -------- --------
Loss from operations (7,312) (11,976) (21,351) (46,027)
Interest income
and other, net 369 1,160 1,727 3,490
-------- -------- -------- --------
Net loss before cumulative
effect of a change in
accounting principle (6,943) (10,816) (19,624) (42,537)
Cumulative effect of a
change in accounting
principle -- -- -- (1,635)
-------- -------- -------- --------
Net loss ($ 6,943) ($10,816) ($19,624) ($44,172)
======== ======== ======== ========
Net loss per share
- basic and diluted:
Net loss before
cumulative effect of
a change in
accounting principle ($ 0.16) ($ 0.31) ($ 0.47) ($ 1.22)
Cumulative effect of a
change in
accounting principle -- -- -- ($ 0.04)
-------- -------- -------- --------
Net loss ($ 0.16) ($ 0.31) ($ 0.47) ($ 1.26)
======== ======== ======== ========
Weighted average shares
used in computing net
loss per share
- basic and diluted 42,153 35,238 41,695 35,100
======== ======== ======== ========
INSWEB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(unaudited)
September 30, December 31,
2001 2000
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 14,009 $ 24,795
Short-term investments 23,139 26,331
--------- ---------
Total cash and short-term investments 37,148 51,126
Accounts receivable, net 3,165 2,935
Prepaid expenses and other current assets 1,305 3,852
--------- ---------
Total current assets 41,618 57,913
Property and equipment, net 5,613 8,666
Investment in joint venture 1,661 1,908
Intangible assets, net 11,293 295
Capitalized web development costs, net 888 1,203
Deposit and other assets 3,344 3,023
--------- ---------
Total assets $ 64,417 $ 73,008
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,154 $ 1,010
Accrued expenses 1,824 2,036
Deferred revenue 1,190 3,124
Restructuring accrual -- 86
--------- ---------
Total current liabilities 4,168 6,256
Note payable to strategic partner 1,258 1,312
Security deposit payable 1,125 1,020
Deferred rent 876 536
--------- ---------
Total liabilities 7,427 9,124
--------- ---------
Shareholders' equity:
Common stock 42 35
Additional paid-in capital 201,938 189,356
Other equity (108) (249)
Accumulated deficit (144,882) (125,258)
--------- ---------
Total shareholders' equity 56,990 63,884
--------- ---------
Total liabilities and
shareholders' equity $ 64,417 $ 73,008
========= =========