InsWeb Reports 3Q Financial Results

Calif.-based InsWeb Corp. announced results for the third quarter ended Sept. 30, 2002. Revenues for the third quarter totaled $6.0 million, compared to $5.8 million in the third quarter of 2001. InsWeb recorded a net loss of $2.3 million, or $0.33 per share, compared to a net loss of $6.9 million, or $0.99 per share for the third quarter of last year.

“Our third quarter revenues were in line with our expectations and roughly flat with the prior quarter,” said Mark Guthrie, president and CEO of InsWeb. “On an overall operating basis, we continued to control expenses, posting an 8 percent decrease compared to the second quarter and a 36 percent decrease compared to the same period last year. With relatively steady revenues and declining expenses, we were able to improve our loss per share to $0.33, compared to $0.38 for the second quarter.”

Guthrie added, “Average auto quotes viewed by consumers increased to 2.7 from 2.5 in the prior quarter as a result of improved participation by our Agency insurer partners. This, in turn, enabled us to sell a significant number of new auto policies through which we expect to build a future revenue stream from the annual renewals of these policies. This expansion of our auto insurance offering, combined with a consistent term life offering, and the continued improvements in our operating efficiencies, positions us well for achieving sustainable growth and profitability.”

Quarterly highlights include:

· Contribution per shopping session (revenue earned per shopping session less cost of direct marketing) was $4.04 in the third quarter, compared to $1.10 in the third quarter of last year;

· Cash consumed during the third quarter amounted to $2.2 million;

· Cash and short-term investments were $30.9 million at Sept. 30, 2002;

· Accounts receivable at quarter end were $2.5 million, and represented days sales outstanding;

· Total headcount at Sept. 30, 2002 was 170;

· InsWeb continues to receive favorable media recognition as the online insurance leader and was recently named the top-rated online auto insurance offering by the leading consumer ratings and recommendations magazine;

· InsWeb launched the Auto Insurance Index, believed to be the first of its kind and designed to identify and track general pricing trends of personal auto insurance sold through the Internet. Based on data from InsWeb’s vast knowledge base, the index revealed that prices for auto insurance nationwide have risen roughly 16 percent annually since the first quarter of 2000.

Business Outlook:

The following forward-looking statements reflect InsWeb management’s expectations as of Oct. 16, 2002. 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.

Guidance for the quarter ending Dec. 31, 2002:

· Completed shopping sessions for the quarter are expected to be between 700,000 and 750,000;

· Revenues are expected to be between $5.2 million and $5.7 million; and

· The company’s net loss from operations is expected to be between $2.4 million and $2.8 million, or a loss of between $0.34 and $0.40 per share.

“The fourth quarter is a traditionally slower quarter for personal lines insurance, which leads us to forecast a moderate decline in revenues on a sequential basis,” said Bill Griffin, InsWeb’s CFO. “We anticipate that this decrease in revenue, which will be partially offset by a corresponding decrease in marketing costs, will result in an increase, quarter-over-quarter, in our loss per share.”

Griffin added, “With a solid financial position of $30.9 million in cash and short-term investments, InsWeb is well-positioned to capitalize as the market leader in the growing opportunity for online insurance.”

Topics Auto Profit Loss