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EXHIBIT 99.1
Dear Shareholder,
On behalf of LendingTree(R), Inc., I would like to take this opportunity to
highlight some of the noteworthy events that have occurred during the first half
of 2001 and take a look ahead at our future plans as we quickly approach our
most significant milestone - becoming profitable on a cash-operating basis
during the first quarter of 2002.
BUSINESS RESULTS
LendingTree continues to post record results, a confirming indicator of our #1
brand awareness in online lending among adults nationwide. A recent brand
awareness study conducted by a third party marketing research firm confirms
LendingTree as the market leader within the arena of online lending. LendingTree
brand awareness among adults nationwide is more than 2.5 times our perceived
direct competitors and is comparable to or exceeds the awareness of the top five
retail banks in the country. The results of this study translate into the
impressive numbers among many of our key operating metrics. During the first
half of 2001, we successfully transmitted more than 650,000 loan requests,
representing more than $52 billion in loan demand, to the lenders on our
network. Loans closed through the LendingTree marketplace in the first half of
this year grew to more than 140,000, representing more than $4.8 billion in
dollar volume, an increase of 141% and 159%, respectively, from the same period
in 2000. Since inception, LendingTree has processed more than four million
completed loan requests and facilitated more than ten billion dollars of closed
loans.
Our revenue grew to more than $28 million in the first half of 2001, an increase
of 130% over the same period last year. Contributing to the revenue growth is
the adoption of our Lend-Xsm technology by industry leaders such as Bank of
America, Freddie Mac, Wachovia, MSN, Costco Warehouse Club, and Delta Airlines.
Sales of Lend-Xsm technology during the first six months increased to $2.9
million, an increase of more than 470% compared the same period last year. A
recent industry report on the subject of online mortgage technology predicts
that LendingTree's technology "will emerge as the platform of choice" among
lenders for originating, decisioning and pricing loans. (Source: Forrester
Research: Resuscitating Mortgage Lending, May 2001)
LendingTree's cash operating loss (EBITDA) continues to decline as we move
closer to our goal of profitability. The EBITDA loss per share of $0.36 in the
first quarter of 2001 and $0.30 in the second quarter represent improvements
over the same periods in 2000 of 60% and 70%, respectively. Since the Company's
initial public offering in February 2000, LendingTree has met or exceeded First
Call's analyst consensus estimates for six consecutive quarters.
The LendingTree exchange continues to grow and, at the conclusion of the first
half of 2001, the number of member financial institutions was more than 130, an
increase of 29% over the same time last year. Additionally, participants include
six of the top ten banks in the United States.
We continue to improve the cost efficiency of attracting new customers. Our
variable marketing cost per transmitted loan request during the first half of
2001 was more than 75% below the same period last year. Our customer acquisition
strategy and our #1 brand awareness position are supported by our ongoing
advertising efforts.
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MAJOR INITIATIVES
We continue to improve and advance our Lend-Xsm technology platform. A major
enhancement made during the first half of 2001 was the release of Lend-Xsm
Version 4.1, which introduced our Automated Decision Engine (ADE). The new
functionality of Version 4.1 and ADE allows consumers to track their loan status
online and enables lenders to automatically decision and extend risk-based
offers, harness the Internet to accept and process loan applications from
traditional offline channels, and generate a significant reduction in processing
costs. During the first half of 2001, LendingTree signed 17 contracts for
Lend-Xsm technology and ADE licenses with leading companies, such as Freddie
Mac, Bank of America, CBS MarketWatch, Costco Warehouse Club, The Motley Fool,
HGTV, Home Security Mortgage, Nationwide Lending, Freedom Mortgage, Aames Home
Loans, and American Residential Mortgage.
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FINANCING
On March 7, 2001, LendingTree announced commitments in conjunction with a
financing package of $45 million consisting of $13.5 million in cash raised
through the sale of convertible preferred stock and an additional $7.5 million
from two lines of credit. The company also received the commitment for a $24
million line of common equity financing. On July 16, LendingTree closed a $15
million credit facility with GE Capital to support our working capital needs
over the next two years. This new facility, which is secured by accounts
receivable and has more favorable financing terms than previous facilities,
replaced an unused $5 million credit line that was part of the original $45
million package. These funds ensure the company will have more than adequate
financing to achieve profitability. Through June 30, the company had not
incurred any debt from these facilities and had not utilized any of the common
equity financing line.
IN BRIEF
LendingTree takes great pride in our strong, experienced management team.
Members of our team, including Rick Stiegler, Chief Technology Officer, and Lori
Collins, Senior Vice President of LendingTree.com, have won significant awards
and recognition this year. In addition, Tom Reddin was promoted to President and
Chief Operating Officer in July 2001 to recognize his continued leadership and
managerial success at LendingTree.
LendingTree continues to make great strides toward our long-term goal of being
the dominant lending exchange and our short-term goal of reaching profitability
during the first quarter of 2002 - progress that has helped our stock make
significant gains this year. LendingTree continues to facilitate an increasing
share of the rapidly growing online lending market, which last year represented
only two percent of the approximately $2 trillion consumer lending industry in
the United States. As the clear leader in our field, we expect to benefit from
further penetration of online lending in the years to come. Industry growth,
coupled with a relentless focus on our mission, business goals, and bottom-line
results, should yield additional value for our shareholders.
I look forward to communicating with you periodically to share more successes as
LendingTree continues to grow and lead this exciting and dynamic industry.
Best Regards,
Douglas Lebda
Founder and CEO
INVESTOR INQUIRIES
To receive copies of our most recent annual report and quarterly filings with
the Securities and Exchange Commission, along with other corporate information
about LendingTree, recent press releases, quarterly reports and additional
investor information, please visit the Investor Relations section of
LendingTree's Web site at www.lendingtree.com.
CORPORATE HEADQUARTERS
LendingTree, Inc.
11115 Rushmore Drive
Charlotte, NC 28277
704-541-5351 PHONE
704-541-1824 FAX