Exhibit 99.1
InsWeb Reports Fourth Quarter and Year-End Financial Results
SACRAMENTO, Calif., February 4, 2004 – InsWeb Corp. (Nasdaq: INSW) today announced results for the fourth quarter ended December 31, 2003. Revenues for the fourth quarter totaled $4.1 million, compared to $6.4 million in the fourth quarter of 2002. During the quarter, InsWeb recognized a gain of $6.0 million relating to the sale of its remaining investment in Finance All K.K., a Japanese corporation.
“Fourth quarter revenues were a challenge as anticipated, due to traditional seasonal softness and the transitions in our auto insurance offering, as we adjust to carrier shifts in our marketplace and continue to retool our consumer marketing efforts to better serve our long-term goals,” said Mark Guthrie, president and chief executive officer of InsWeb. “We are proactively addressing the issues within our auto marketplace and have implemented new initiatives that improve the consumer experience by providing a greater opportunity to receive an auto insurance quote. On the consumer-marketing front, competition for the on-line consumer continues to be fierce; however, with the addition of an experienced consumer marketing executive and the expansion of our strategic marketing department this month, we are now well positioned to find additional cost-effective sources of consumer traffic. With these efforts we expect to demonstrate continued progress in narrowing our operating loss over the coming year.”
Hussein Enan, InsWeb’s chairman, commented, “We made solid progress during our fourth quarter with our newest auto insurance carriers, Liberty Mutual and Safeco Insurance Company, and are encouraged by the initial success of our new carrier sponsored web links that were launched in October. With continued validation of InsWeb’s auto insurance offering as a proven distribution channel for insurance carriers, the Company remains on track toward achieving long-term success as a prominent personal lines insurance distributor.”
For fiscal year 2003, InsWeb reported total revenues of $24.1 million and net income of $1.0 million, or $0.20 per share. Included in net income is a gain of $6.8 million, resulting from the sale of its investment in Finance All K.K., and $0.8 million received in the settlement of InsWeb’s litigation with eHealthInsurance.com. This compares to revenues of $25.6 million and a net loss of $4.6 million, or $0.65 per share, for fiscal year 2002. During fiscal 2002, InsWeb recorded non-cash charges totaling $5.5 million, which included an impairment charge of $3.7 million relating to prepaid marketing costs, a long-lived asset that resulted from InsWeb’s acquisition of selected assets of the Quicken-Insurance business unit from Intuit, as well as an additional charge of $1.8 million increasing the reserve for future lease obligations of previously exited facilities. In addition, fiscal 2002 operating results were benefited by a gain of $10.6 million, resulting from the renegotiation of an online marketing distribution agreement.
Financial Highlights:
• Contribution per consumer (transaction revenue earned per consumer who has started an application, less cost of direct marketing) was $2.82 for the quarter ended December 31, 2003, compared to $1.82 in the third quarter of 2003 and $2.01 in the comparable period last year. For the year, contribution per consumer was $2.11 for 2003, compared to $1.99 in 2002;
• Cash and short-term investments at December 31, 2003 amounted to $26.1 million. This includes the proceeds of $6.8 million received from the sale of InsWeb’s remaining interest in Finance All;
• Excluding the impact of the Finance All transaction, cash consumed during the fourth quarter was approximately $2.1 million;
• Accounts receivable at quarter end were $1.0 million, representing 35 days sales outstanding;
• Total staff at December 31, 2003 was 130, compared to 171 at September 30, 2003.
Other Developments:
• In February 2003, InsWeb purchased 2,241,440 shares of its common stock for approximately $3.8 million, or $1.70 per share, consisting of 1,169,898 shares held by Intuit Insurance Services, Inc. and 1,071,542 shares held by SOFTBANK America, Inc.;
• For the year 2003, InsWeb purchased, under its stock buyback program, 77,900 shares of common stock for a total cost of $362,000, or an average of $4.65 per share.
Commenting on the Company’s financial outlook, chief financial officer Bill Griffin stated, “While we anticipate a modest rebound in first quarter revenues coming off our seasonally slow fourth quarter, we expect our near-term run rate to continue to be impacted by the changes we are undergoing in our auto insurance marketplace. We have proactively reduced our cost structure through headcount reductions to better align with current revenue levels and expect to realize more than $3 million in non-marketing expense savings over the next year. We remain extremely comfortable with our cash position of over $26 million, and believe we have ample resources to meet our working capital needs for the foreseeable future.”
Revenue Highlights for the Quarter Ended:
| | Dec 31, 2003 | | Sep 30, 2003 | | Jun 30, 2003 | | Mar 31, 2003 | | Dec 31, 2002 | |
| | | | | | | | | | | |
Transaction revenues: | | | | | | | | | | | |
Auto insurance | | $ | 2,626,000 | | $ | 4,711,000 | | $ | 4,699,000 | | $ | 6,214,000 | | $ | 5,274,000 | |
Term life insurance | | 1,247,000 | | 1,123,000 | | 1,191,000 | | 909,000 | | 733,000 | |
Other insurance offerings | | 66,000 | | 97,000 | | 204,000 | | 105,000 | | 88,000 | |
| | 3,939,000 | | 5,931,000 | | 6,094,000 | | 7,228,000 | | 6,095,000 | |
Development and maintenance fees | | 201,000 | | 255,000 | | 230,000 | | 253,000 | | 291,000 | |
Total revenues | | $ | 4,140,000 | | $ | 6,186,000 | | $ | 6,324,000 | | $ | 7,481,000 | | $ | 6,386,000 | |
Marketing Metrics and Costs for the Quarter Ended:
| | Dec 31, 2003 | | Sep 30, 2003 | | Jun 30, 2003 | | Mar 31, 2003 | | Dec 31, 2002 | |
| | | | | | | | | | | |
Number of consumers – Auto | | 690,000 | | 1,657,000 | | 1,532,000 | | 1,900,000 | | 1,430,000 | |
Number of consumers – Term life | | 126,000 | | 124,000 | | 129,000 | | 149,000 | | 118,000 | |
Direct marketing costs | | $ | 1,475,000 | | $ | 2,530,000 | | $ | 2,192,000 | | $ | 2,933,000 | | $ | 2,835,000 | |
| | | | | | | | | | | | | | | | |
Auto Marketplace Characteristics for the Quarter Ended:
| | Dec 31, 2003 | | Sep 30, 2003 | | Jun 30, 2003 | | Mar 31, 2003 | | Dec 31, 2002 | |
| | | | | | | | | | | |
Average Quotes Viewed | | 3.1 | | 3.0 | | 2.7 | | 2.6 | | 2.5 | |
Participating Auto Insurers | | 26 | | 26 | | 23 | | 24 | | 24 | |
Agency – New policies sold | | 1,907 | | 2,744 | | 2,541 | | 2,587 | | 2,481 | |
Term Life Marketplace Characteristics for the Quarter Ended:
| | Dec 31, 2003 | | Sep 30, 2003 | | Jun 30, 2003 | | Mar 31, 2003 | | Dec 31, 2002 | |
| | | | | | | | | | | |
Average Quotes Viewed | | 5.7 | | 6.0 | | 5.5 | | 5.4 | | 5.8 | |
Participating Term Life Insurers | | 11 | | 12 | | 13 | | 12 | | 11 | |
Definitions:
“Number of Consumers” | | Represents a consumer who has started an InsWeb application; |
| | |
“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; |
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.
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, expenses and financial position; consumer activity and the results of certain strategic initiatives; increased or decreased participation by insurance companies; 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 on the Company’s website; further changes in the Company’s relationships with existing insurance companies, 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 companies and strategic partners; implementation of competing Internet strategies by existing and potential insurance Company participants; implementation and consumer 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; 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 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 ]
| | Three months ended
December 31, | | Year ended
December 31, | |
| | 2003 | | 2002 | | 2003 | | 2002 | |
| | | | | | | | | |
Revenues: | | | | | | | | | |
Transactions | | $ | 3,939 | | $ | 6,095 | | $ | 23,192 | | $ | 24,107 | |
Development and maintenance fees | | 201 | | 291 | | 939 | | 1,448 | |
Total revenues | | 4,140 | | 6,386 | | 24,131 | | 25,555 | |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Technology | | 2,252 | | 2,366 | | 9,014 | | 10,322 | |
Sales and marketing | | 3,109 | | 4,528 | | 16,225 | | 18,329 | |
General and administrative | | 1,402 | | 1,361 | | 5,883 | | 6,850 | |
Restructuring and other charges | | — | | 1,800 | | — | | 1,800 | |
Impairment of long-lived assets | | — | | 3,707 | | — | | 3,707 | |
Total operating expenses | | 6,763 | | 13,762 | | 31,122 | | 41,008 | |
Loss from operations | | (2,623 | ) | (7,376 | ) | (6,991 | ) | (15,453 | ) |
Interest expense | | (2 | ) | (51 | ) | (86 | ) | (465 | ) |
Interest and other income, net | | 6,241 | | 1,396 | | 8,123 | | 11,340 | |
Net income (loss) | | $ | 3,616 | | $ | (6,031 | ) | $ | 1,046 | | $ | (4,578 | ) |
| | | | | | | | | |
Net income (loss) per share: | | | | | | | | | |
Basic | | $ | 0.78 | | $ | (0.86 | ) | $ | 0.21 | | $ | (0.65 | ) |
Diluted | | $ | 0.73 | | $ | (0.86 | ) | $ | 0.20 | | $ | (0.65 | ) |
| | | | | | | | | |
Shares used in computing net income (loss) per share: | | | | | | | | | |
Basic | | 4,656 | | 7,023 | | 5,026 | | 7,035 | |
Diluted | | 4,959 | | 7,023 | | 5,279 | | 7,035 | |
INSWEB CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
[ Amounts in thousands ]
| | December 31,
2003 | | December 31,
2002 | |
| | | | | |
ASSETS | | | | | |
| | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 15,223 | | $ | 12,382 | |
Short-term investments | | 10,868 | | 16,541 | |
Total cash, cash equivalents and short-term investments | | 26,091 | | 28,923 | |
Accounts receivable, net | | 1,006 | | 2,236 | |
Prepaid expenses and other current assets | | 785 | | 1,232 | |
Total current assets | | 27,882 | | 32,391 | |
| | | | | |
Property and equipment, net | | 1,386 | | 2,197 | |
Other assets | | 614 | | 3,104 | |
Total assets | | $ | 29,882 | | $ | 37,692 | |
| | | | | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 524 | | $ | 888 | |
Accrued expenses | | 4,678 | | 5,605 | |
Deferred revenue | | 275 | | 575 | |
Marketing commitment | | 126 | | 2,306 | |
Note payable | | — | | 1,230 | |
Total current liabilities | | 5,603 | | 10,604 | |
| | | | | |
Shareholders’ equity: | | | | | |
Common stock | | 7 | | 7 | |
Paid-in capital, less treasury shares | | 197,988 | | 202,051 | |
Accumulated other comprehensive loss | | — | | (208 | ) |
Accumulated deficit | | (173,716 | ) | (174,762 | ) |
Total shareholders’ equity | | 24,279 | | 27,088 | |
Total liabilities and shareholders’ equity | | $ | 29,882 | | $ | 37,692 | |
