SOURCE: InsWeb

January 24, 2008 16:15 ET

InsWeb Reports Record Fiscal 2007 Financial Results and First Year of Profitability

2007 Total Revenues of $33.2 Million; 2007 Net Income of $2.4 Million; Reminder: Conference Call and Webcast Today at 5:00 pm ET; Dial-In: (800) 218-4007

SACRAMENTO, CA--(Marketwire - January 24, 2008) - InsWeb Corp. (NASDAQ: INSW), a leading online insurance marketplace, today announced results for the fourth quarter and year ended December 31, 2007.

Revenues for the fourth quarter of 2007 were $7.7 million, an increase of approximately 33% as compared to $5.8 million in the fourth quarter of 2006. Net income for the fourth quarter of 2007 was $1.3 million, or $0.23 per diluted share, which includes a one-time benefit of $985,000 related to a decrease in a lease loss accrual, compared to a net loss in the fourth quarter of 2006 of $0.3 million, or $0.08 per diluted share. The decrease in lease loss accrual relates to properties formerly used as the company's headquarters, which are subleased through September 2008.

Revenues for fiscal 2007 were a record $33.2 million, an increase of approximately 16% over the $28.5 million for fiscal 2006. Net income for fiscal 2007 was a record $2.4 million, or $0.46 per diluted share. This compares with a net loss of $3.4 million, or $0.82 per diluted share, for fiscal 2006.

Adjusted EBITDA, a non-GAAP financial measure used by InsWeb's management and defined below, amounted to $617,000 in the fourth quarter of 2007, compared to $692,000, including $35,000 in severance expense, in the third quarter of 2007. Adjusted EBITDA for fiscal 2007 was a record $2.7 million, compared to a loss of $4.9 million for fiscal 2006.

"Our record fiscal 2007 results and first year of profitability reflect our continued success in evolving our model and scaling our business. We are pleased to have posted four consecutive quarters of net income and sustained profitability in the fourth quarter despite traditional seasonality within the insurance industry during the holiday period," stated InsWeb Chairman & CEO Hussein Enan. "Since launching our AgentInsider® Agent Directory in the first week of January 2008, early results have been promising, as we have already registered approximately 450 Auto and Home agents and generated initial advertising and listings/subscription revenue, both of which represent new revenue streams for InsWeb. As we enter fiscal 2008, we believe the successful scaling of this offering will provide InsWeb with an opportunity for continued growth and expansion. Looking ahead, we expect our year-over-year growth in 2008 to exceed that of 2007, along with expanding profitability."

As previously reported, InsWeb is a defendant in a patent infringement lawsuit brought by Autobytel. InsWeb has been a business partner with Autobytel and/or its subsidiaries for more than 6 years and contends that the relevant functional aspects of InsWeb's technology has not materially changed since 1997, a date that precedes Autobytel's patent application by more than one year. As a business partner, Autobytel knew of InsWeb's business processes for many years without complaining of infringement. While this litigation is in the early stages, InsWeb's retained counsel believes the Company has meritorious defenses of non-infringement, patent invalidity and unenforceability. InsWeb intends to defend itself vigorously and pursue all available options with regard to this action.

Non-GAAP Financial Information

In evaluating InsWeb's business, the Company's management considers and uses Adjusted EBITDA as a supplemental measure of operating performance. Adjusted EBITDA refers to a financial measure that the Company defines as net income (loss) excluding net interest, taxes, depreciation, amortization, share-based compensation, severance, and other one-time gains and losses that are not related to the Company's continuing operations. This measure is an essential component of InsWeb's internal planning process because it facilitates period-to-period comparisons of the Company's operating performance by eliminating potential differences in net income (loss) caused by the existence and timing of non-cash charges and non-recurring gains and losses. Furthermore, Adjusted EBITDA reflects the key revenue and expense items for which InsWeb's operating managers are responsible and upon which the Company evaluates their performance.

                            InsWeb Corporation
              NON-GAAP FINANCIAL MEASURE AND RECONCILIATION
                              (In thousands)
                                (unaudited)


                               Three months ended       Twelve months Ended
                          ----------------------------- -------------------
                                                        December  December
                          December  September December  31, 2007  31, 2006
                          31, 2007  30, 2007  31, 2006    Year      Year
                          --------- --------- --------  --------- --------
Net income (loss)         $   1,341 $     464 $   (336) $   2,421 $ (3,370)
  Less
    Lease loss accrual          985         -        -        985        -
    Interest Income, net         91       108      139        378      425
    Gain on sale of
     InsWeb Insurance
     Services' property
     and casualty book of
     business                     -         -        -               2,044
  Add
    Provision for income
     taxes                       45         -        -         45        -
    Share-based
     compensation expense       276       264      185      1,114      431
    Depreciation and
     amortization of
     property and
     equipment from
     continuing
     operations                  31        37       45        153      222
    Severance expense             -        35        -        343      242
                          --------- --------- --------  --------- --------
    Adjusted EBITDA from
     continuing
     operations           $     617 $     692 $   (245) $   2,713 $ (4,944)
                          ========= ========= ========  ========= ========

Adjusted EBITDA is not a measurement of the Company's financial performance under U.S. GAAP and has limitations as an analytical tool. You should not consider it in isolation or as a substitute for the Company's U.S. GAAP net income (loss). The principal limitations of this measure are that: 1) it does not reflect the Company's actual expenses and may thus have the effect of inflating the Company's net income and net income per share; and 2) it may not be comparable to Adjusted EBITDA as reported by other companies.

Earnings Call Information

The InsWeb fourth quarter teleconference and webcast is scheduled to begin at 2:00 p.m., Pacific Time, on Thursday, January 24, 2008. To participate on the live call, analysts and investors should dial 800-218-4007 at least ten minutes prior to the call. InsWeb will also offer a live and archived webcast of the conference call, accessible from the "Investor Relations" section of the Company's Web site at http://investor.insweb.com/index.cfm.

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 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 with 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 expressing the intent, belief or current expectations of the Company and members of our management team regarding: projected future revenues, revenue growth, expenses, profitability and financial position; marketing and consumer acquisition; the results of strategic initiatives, including AgentInsider; increased or decreased participation by insurance companies; and product and technological implementations. 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 providers and strategic partners; implementation of competing Internet strategies by existing and potential competitors; implementation and consumer acceptance of new product or service offerings; the outcome of litigation in which the Company is a party; insurance and financial services industry regulation; 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 per share amounts ]
                              [ unaudited ]


                                    Three months ended      Year ended
                                       December 31,        December 31,
                                    ------------------  ------------------
                                      2007      2006      2007      2006
                                    --------  --------  --------  --------
  Revenues:
    Transaction fees                $  7,667  $  5,746  $ 32,940  $ 28,161
    Other                                 61        78       258       340
                                    --------  --------  --------  --------
  Total revenues                       7,728     5,824    33,198    28,501

  Operating expenses:
    Direct marketing                   4,543     3,275    19,567    18,576
    Sales and marketing                1,190     1,586     5,246     7,512
    Technology                           731       721     3,075     4,459
    General and administrative           954       719     4,213     3,799
    Lease loss accrual                  (985)        -      (985)        -
                                    --------  --------  --------  --------
  Total operating expenses             6,433     6,301    31,116    34,346
                                    --------  --------  --------  --------
  Income (loss) from operations        1,295      (477)    2,082    (5,845)
    Interest income                       91       139       378       425
  Other income (expense), net              -         2         6     2,050
                                    --------  --------  --------  --------
  Income (loss) before income taxes    1,386      (336)    2,466    (3,370)
  Provision for income taxes              45         -        45         -
                                    --------  --------  --------  --------
  Net income (loss)                 $  1,341  ($   336) $  2,421  ($ 3,370)
                                    ========  ========  ========  ========

 Net income (loss) per share:
     Basic                          $   0.29  ($  0.08) $   0.55  ($  0.82)
                                    ========  ========  ========  ========
     Diluted                        $   0.23  ($  0.08) $   0.46  ($  0.82)
                                    ========  ========  ========  ========

  Weighted-average shares used in
   computing net income (loss) per
   share:
     Basic                             4,552     4,099     4,387     4,092
                                    ========  ========  ========  ========
     Diluted                           5,753     4,099     5,295     4,092
                                    ========  ========  ========  ========




                            INSWEB CORPORATION
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                          [Amounts in thousands]
                                [unaudited]

                                                December 31,  December 31,
                                                    2007          2006
                                                ------------  ------------
ASSETS

Current  assets:
   Cash  and  cash  equivalents                 $     10,777  $      6,750
   Accounts  receivable,  net                          2,428         2,804
   Prepaid  expenses  and  other  current
    assets  (including  related  party
    receivable  of  $48  as  of  December
    31,  2007)                                           596           398
                                                ------------  ------------
           Total  current  assets                     13,801         9,952

Property  and  equipment                                 257           389
Other  assets                                             75           115
                                                ------------  ------------
           Total  assets                        $     14,133  $     10,456
                                                ============  ============

LIABILITIES  AND  SHAREHOLDERS'  EQUITY

Current  liabilities:
   Accounts  payable                            $      2,118  $      2,248
   Accrued  expenses                                   1,426         2,672
   Deferred  revenue                                     246           245
                                                ------------  ------------
           Total  current  liabilities                 3,790         5,165

Commitments  and  contingencies

Shareholders' equity:
   Common  stock                                           8             7
   Paid-in  capital                                  206,208       203,578
   Treasury  stock                                    (6,334)       (6,334)
   Accumulated  deficit                             (189,539)     (191,960)
                                                ------------  ------------
           Total  shareholders'  equity               10,343         5,291
                                                ------------  ------------
             Total  liabilities  and
              shareholders’  equity             $     14,133  $     10,456
                                                ============  ============






The following financial highlights and key metrics are provided as a
resource for our investors. Please refer to the Company’s filings with the
Securities and Exchange Commission for additional information regarding our
business.


                                             Three months ended
                                  ----------------------------------------
                                  December 31, September 30,  December 31,
                                      2007          2007          2006
                                  ------------  ------------  ------------

Revenues:
    Auto                          $  6,668,000  $  7,995,000  $  4,187,000
    All Other                     $  1,060,000  $  1,236,000  $  1,637,000
                                  ------------  ------------  ------------
    Total                         $  7,728,000  $  9,231,000  $  5,824,000

# of Consumers:
    Auto                             1,477,000     1,802,000       903,000
    All Other                          148,000       164,000       118,000
                                  ------------  ------------  ------------
    Total                            1,625,000     1,966,000     1,021,000

Revenues per Consumer:
    Auto                          $       4.51  $       4.44  $       4.64
    All Other                     $       7.16  $       7.54  $      13.87
                                  ------------  ------------  ------------
    Total                         $       4.76  $       4.70  $       5.70

Auto Segment B Revenue per Click  $       6.57  $       6.49  $       5.01
Avg. Times Lead Sold - (Auto and
 Home)                                     4.7           4.0          N/A*

Agent Insider Approved Agents            5,256         4,903         4,016


Direct Marketing Costs:           $  4,543,000  $  5,899,000  $  3,275,000
Direct Marketing Costs as
a percent of Revenues                       59%           64%           56%
Marketing Costs per Consumer      $       2.80  $       3.00  $       3.21


Cash and Cash Equivalents:        $ 10,777,000  $  8,491,000  $  6,750,000
Accounts Receivable:              $  2,428,000  $  5,104,000  $  2,804,000
Day Sales Outstanding (DSO):                44            43            45

Staffing:                                   62            59            95


Definitions:
"# of Consumers"                Represents consumers acquired from
                                marketing activities
"Per Consumer Information"      Represents Revenues earned or marketing
                                costs incurred per consumer who has
                                started an InsWeb quote form
"Segment B"                     Auto insurance consumers classified as
                                non-standard (bad driving record, not
                                enough experience, or not permanently
                                insured for 3 years)
"Avg Times Lead Sold"           Total # of times a lead is sold, including
                                leads sold by NetQuote on our behalf
"AgentInsider" Approved Agents  # of agents approved to buy leads through
                                AgentInsider
"Direct Marketing Costs"        Represents expenses incurred by InsWeb
                                to drive consumers to InsWeb's online
                                insurance marketplace

*N/A                            Information not available at that time

Contact Information

  • Investor Relations Contact:
    Molly Plyler
    The Blueshirt Group
    415-217-7722
    Email Contact