SOURCE: InsWeb

January 26, 2006 06:30 ET

InsWeb Reports Fourth Quarter and Fiscal 2005 Results

SACRAMENTO, CA -- (MARKET WIRE) -- January 26, 2006 -- InsWeb Corp. (NASDAQ: INSW) today announced results for the fourth quarter and year ended December 31, 2005. Revenues for the fourth quarter were $5.8 million, compared to $3.9 million in the fourth quarter of 2004 and $6.9 million in the third quarter of 2005. InsWeb's net loss for the fourth quarter was $2.1 million, or $0.51 per share. This compares to a net loss in the fourth quarter of 2004 of $2.2 million, or $0.46 per share, and to a net loss of $1.4 million, or $0.34 per share in the third quarter of 2005.

For fiscal year 2005, InsWeb reported total revenues of $25.0 million and a net loss of $5.9 million, or $1.40 per share. This compares to revenues of $14.7 million and a net loss of $8.9 million, or $1.90 per share, for fiscal year 2004.

"Our fourth quarter results reflect traditional seasonality within the personal lines insurance industry, coupled with the increased cost of acquiring consumers through online advertising during the holiday period. On a year over year basis, we experienced strong revenue growth as we continued to benefit from the evolution of our business model," said Hussein Enan, chairman and CEO of InsWeb. "Since launching our AgentInsider™ lead generation program in September, we have made solid progress, ending the year with nearly 1,500 registered and participating local personal lines insurance agents and five major insurance carriers who have contracted to promote or sponsor the program for their captive or independent agents. Increasing participation in this program continues to be our top priority as we begin the new year, and we believe the successful scaling of this offering will provide the opportunity for continued growth and expansion in 2006."

Financial Highlights and Metrics:

Revenues:                         Dec 31, 2005  Sept 30, 2005 Dec 31, 2004
                                   -----------   -----------   -----------

Transaction fee revenues:
    Auto insurance                 $ 4,461,000   $ 5,509,000   $ 3,118,000
    Term life insurance              1,129,000     1,219,000       569,000
    Other insurance offerings          133,000        71,000        54,000
                                   -----------   -----------   -----------
                                     5,723,000     6,799,000     3,741,000
Development and maintenance fees        96,000        99,000       123,000
                                   -----------   -----------   -----------
           Total revenues          $ 5,819,000   $ 6,898,000   $ 3,864,000
                                   ===========   ===========   ===========



Direct Marketing                  Dec 31, 2005  Sept 30, 2005 Dec 31, 2004
(Consumer Acquisition):            -----------   -----------   -----------

Direct marketing costs             $ 4,181,000   $ 4,365,000   $ 2,452,000
Direct marketing as a percent
 of revenues                                72%           63%           63%
Number of consumers                  1,272,000     1,584,000       740,000
Marketing cost per consumer        $      3.29   $      2.76   $      3.31
Total revenue per consumer         $      4.57   $      4.35   $      5.22

Definitions:

"Direct marketing costs"        Represents expenses incurred by InsWeb to
                                drive consumer traffic to InsWeb's online
                                insurance marketplace;

"Number of consumers"           Represents a consumer who has started an
                                InsWeb application;

"Per consumer information"      Represents transaction revenue earned or
                                marketing costs incurred per consumer who
                                has started an application.


Auto Marketplace:                 Dec 31, 2005 Sept 30, 2005  Dec 31, 2004
                                   -----------   -----------   -----------

Auto insurance revenues            $ 4,461,000   $ 5,509,000   $ 3,118,000
Number of consumers                  1,179,000     1,496,000       635,000
Revenue per consumer               $      3.78   $      3.68   $      4.91
Number of lead submitting consumers    198,000       235,000       131,000
Revenue per lead submitting
 consumer                          $     22.53   $     23.44   $     23.80
A significant share of InsWeb's Auto marketplace revenues are derived from its two initiatives to sell consumer leads to local insurance agents, InsWeb's internal program (AgentInsider) and a third party agent network. The success of AgentInsider will be dependent on the rate of registration and the degree of participation by local personal lines insurance agents throughout the country. As the AgentInsider program grows, InsWeb will become less reliant on the third party agent network. During the fourth quarter of 2005, revenues from this third party intermediary represented 27% of auto insurance revenues, compared to 31% in the third quarter of 2005, and 18% in the fourth quarter of 2004.
Term Life Marketplace:            Dec 31, 2005 Sept 30, 2005  Dec 31, 2004
                                   -----------   -----------   -----------

Term life insurance revenues       $ 1,129,000   $ 1,219,000   $   569,000
Number of consumers                     67,000        62,000        83,000
In August 2004, InsWeb launched its Term Life agency in an effort to increase revenue per customer within the InsWeb Term Life marketplace. During the initial implementation of the Term Life agency, the Company recognized commission revenue on a ratable basis over the term of the related policy. Beginning in the second quarter of 2005, the Company began recognizing commission revenue when the policy is sold, net of an estimate for future cancellations based on the Company's historical cancellation data.

Other Highlights:

--  Cash and short-term investments at December 31, 2005 were $10.3
    million;
--  Accounts receivable at quarter end were $2.3 million, representing 40
    days sales outstanding;
--  Total staff was 122 as of December 31, 2005, compared to 119 as of
    September 30, 2005.
    
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.

For further information regarding InsWeb Corporation, please review the Company's filings 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 regarding: projected future revenues, expenses and financial position; marketing and consumer acquisition; 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 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 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" 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 net loss per share]
                                  [unaudited]

                                   Three months ended      Year ended
                                       December 31,        December 31,
                                   ------------------  ------------------
                                     2005      2004       2005     2004
                                   --------  --------  --------  --------
Revenues:
   Transactions                    $  5,723  $  3,741  $ 24,650  $ 13,987
   Development and
    maintenance fees                     96       123       365       673
                                   --------  --------  --------  --------
Total revenues                        5,819     3,864    25,015    14,660

Operating expenses:
   Technology                         1,233     1,228     5,354     5,416
   Sales and marketing                5,923     3,901    21,977    13,868
   General and administrative           846       993     4,023     4,544
                                   --------  --------  --------  --------
Total operating expenses              8,002     6,122    31,354    23,828
                                   --------  --------  --------  --------
Loss from operations                 (2,183)   (2,258)   (6,339)   (9,168)
Interest income                         109        80       398       305
Other (expense) income                    -       (40)        -       (70)
                                   --------  --------  --------  --------
Net loss                          ($  2,074)($  2,218)($  5,941)($  8,933)
                                   ========  ========  ========  ========

Net loss per share - basic and
 diluted:
   Net loss                       ($   0.51)($   0.46)($   1.40)($   1.90)
                                   ========  ========  ========  ========


Weighted average shares used in
 computing net loss per share -
 basic and diluted (1)                4,066     4,775     4,234     4,711
                                   ========  ========  ========  ========

(1)  Shares used in the computation of net loss per share of common stock
     are based on the weighted average number of shares outstanding in
     each period.



                               INSWEB CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                             [Amounts in thousands]
                                    [unaudited]
                                                  December 31, December 31,
                                                       2005        2004
                                                     ---------   ---------
ASSETS

Current assets:
   Cash and cash equivalents                         $   9,073   $   9,334
   Short-term investments                                1,233       8,145
                                                     ---------   ---------
      Total cash and short-term investments             10,306      17,479
   Accounts receivable, net                              2,297       1,025
   Prepaid expenses and other current assets               545         707
                                                     ---------   ---------
         Total current assets                           13,148      19,211

Property and equipment                                     524         814
Other assets                                               346         450
                                                     ---------   ---------
         Total assets                                $  14,018   $  20,475
                                                     =========   =========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                  $   2,655   $   1,248
   Accrued expenses                                      3,094       3,456
   Deferred revenue                                        128          56
                                                     ---------   ---------
      Total current liabilities                          5,877       4,760

Commitments and contingencies

Shareholders' equity:
   Common stock                                              7           7
   Paid-in capital                                     203,059     202,961
   Treasury stock                                       (6,334)     (4,596)
   Accumulated other comprehensive loss                     (1)         (8)
   Accumulated deficit                                (188,590)   (182,649)
                                                     ---------   ---------
      Total shareholders' equity                         8,141      15,715
                                                     ---------   ---------
         Total liabilities and shareholders'         $  14,018   $  20,475
          equity                                     =========   =========

Contact Information

  • Investor Relations Contact:
    Jennifer Jarman
    The Blueshirt Group
    415-217-7722
    Email Contact