DARIEN, Ill., July 25 /PRNewswire/ -- Quotesmith.com, Inc.,
(Nasdaq: QUOT), the online insurance broker which provides instant quotes from
more than 300 leading insurance companies, today announced financial results
for the second quarter ended June 30, 2001.
"We executed on our plan to reduce our net losses during the second
quarter and first half of this year primarily through reductions in marketing
expenses. We recently began to outsource portions of our back office
processing which we believe will yield significant unit cost reductions going
forward. Earlier this month, we launched our new comparative auto insurance
engine in Illinois and are now preparing our Web site to accept online
applications and e-signatures in order to speed up and simplify the buying
process," said Robert Bland, chairman and CEO. "Our business plan objectives
for the remainder of 2001 are to conserve capital, gun for profitability
through further marketing efficiencies and expense reductions and to expand
our new multi-company auto insurance engine into more key states."
Financial Results
Revenues for the second quarter ended June 30, 2001 were $2.1 million, an
11% decrease from revenues of $2.4 million reported for the first quarter of
2001 and a 56% decrease from revenues of $4.9 million reported for the same
period last year. Net loss for the second quarter increased to $2.6 million,
or $0.48 per share, compared with a net loss of $2.4 million, or $0.43 per
share reported for the first quarter of 2001 and a loss of $3.6 million, or
$0.56 per share, in the second quarter of 2000.
On a year-to-date basis, the Company reported revenues of $4.6 million for
the first six months of 2001 as compared to $8.8 million for the same period
in 2000. Net loss for the first six months of 2001 totaled $5.1 million, or
$0.89 per share, vs. $12.7 million, or $1.98 per share, for the first six
months of 2000.
As previously reported, Quotesmith.com shareholders approved a 3-for-1
reverse stock split on March 7, 2001. All share and per-share amounts in
this press release have been retroactively adjusted to reflect the stock
split.
Quotesmith.com ended the quarter with $21.7 million, or $4.06 per share,
in cash and short-term investments. Total debt outstanding, consisting solely
of capitalized lease liabilities, equaled $0.1 million, or $0.02 per share, as
of June 30, 2001.
Policies Sold Recap
For the second quarter, Quotesmith.com reported 5,314 policies sold,
representing a decrease of 56% from the 12,148 policies sold in the second
quarter of 2000. Paid policies for the first six months of 2001 amounted to
11,633, down 46% from the 21,536 paid policies reported in the like period of
2000.
Reduced Customer Acquisition Costs
For the first six months of 2001, Quotesmith.com reported continued
progress in lowering per-policy customer acquisition costs (total marketing
costs divided by total new policies sold) as a result of reduced U.S. media
rates and more efficient deployment of marketing dollars. The per-policy
acquisition cost in the first half of 2001 amounted to $466 and compares
favorably to $746 for the first half of 2000.
Share Repurchase Program
As part of a previously announced share repurchase program, Quotesmith.com
repurchased 170,000 shares in the second quarter of 2001 at an average price
of $2.88 per share. The company had 5,347,779 shares outstanding as of June
30, 2001. In the first quarter of 2001 the company repurchased a total of
404,124 shares at an average price of $1.81 per share.
New Chief Financial Officer
Quotesmith.com named Walter Kulikowski as its vice president and chief
financial officer effective May 14, 2001. Kulikowski came to Quotesmith.com
with a long and distinguished record of achievement in the financial
management of several Internet, telecom and financial institutions.
Kulikowski, 47, replaced David Vickers, who resigned to pursue other
interests.
Revised Financial Targets for 2001
Quotesmith.com is revising the financial targets for 2001 that were
announced on April 24, 2001. The Company intends to further reduce marketing
expenditures until its planned expansion into auto and certain additional
lines of the insurance business are further implemented and producing
satisfactory financial results. This planned reduction in marketing expenses
will cause revenue to decrease and should also reduce the amount of capital
drain as compared to previously projected amounts. Based upon these and other
factors, the Company now anticipates 2001 revenues of approximately $8 million
with a net loss of approximately $6.5 million vs. a loss range of $7 to
$8 million announced on April 24, 2001. The company is currently projecting
2001 year-end cash and investment balances of $18 to $19 million.
Quotesmith.com believes that its current capital structure, including cash
and investments of $21.7 million, is adequate to reach profitability without
the necessity of additional debt or equity financing.
The company does not provide confirmation or updates of its targets except
through public announcements.
New Products and Services
Personal Auto. In describing the current status of the rollout of
Personal Auto, Bland remarked, "Our entry into the personal auto insurance
brokerage market is a project of vital long-term importance to us because of
the huge size of the U.S. auto insurance market and because of the recurring
revenue opportunities associated with auto insurance. Earlier this month we
launched our brand new, multi-company auto insurance price comparison engine
in Illinois. We expect to rollout into more high population states as the
year progresses. Our goal on this ambitious project is to provide auto
insurance shoppers of all ages and profiles with a true panorama of
comparative information on a scale not seen before, on or off of the
Internet."
LTCompare(R). In February of this year Quotesmith.com launched its new
Web-based long-term care insurance price comparison and purchasing service
that promises to replace hours of research and lead to maximum savings for
beleaguered long-term care insurance buyers and their families. LTCompare now
provides instant quotes from about 15 household-name insurers and includes
one-click downloads of brochures, comparative buying guides and regulatory
information. Long-term care insurance is considered by many to be the most
expensive line of personal insurance and one of the most complex for families
to research. LTCompare should add a larger-ticket commission sale to the
Quotesmith.com Web site content portfolio.
QuotesmithPro(R). In an effort to leverage its existing technology and
create new revenue streams, Quotesmith.com also intends to launch
QuotesmithPro as a Web-based subscription service designed for use by
insurance agents, brokers, consultants and financial planners. QuotesmithPro
will help insurance professionals transition from the drudgery of having to
deal with multiple-company Web sites and outdated desktop systems by providing
an easy, fast and single-source information platform from which customer-ready
proposals can be produced in seconds. Subscription pricing for this new
service has not yet been set.
About Quotesmith.com
Quotesmith.com owns and operates the industry's largest and most
comprehensive insurance price comparison service. The Quotesmith.com
Insurance Commerce Platform allows insurance shoppers to instantly view the
best prices being offered by more than 300 leading companies, achieve maximum
savings and have the freedom to buy from the company of their choice.
Quotesmith.com provides personalized customer service assistance and policy
placement services for its customers and generates revenues from the receipt
of commissions and fees paid by insurance companies. Shares of Quotesmith.com
trade on the Nasdaq SmallCap Market Exchange under the symbol "QUOT."
Cautions about Forward-Looking Statements
This announcement may contain forward-looking statements that involve
risks, assumptions and uncertainties pursuant to the safe-harbor provisions of
the Private Securities Litigation Reform Act of 1995. This announcement also
contains forward-looking statements about events and circumstances that have
not yet occurred and may not occur. Expressions of future goals and similar
expressions including, without limitation, "may," "will," "believes,"
"should," "could," "hope," "expects," "expected," "does not currently expect,"
"anticipates," "predicts," "potential" and "forecast," reflecting something
other than historical fact, are intended to identify forward-looking
statements, but are not the exclusive means of identifying such statements.
Investors should be aware that actual results may differ materially from the
results predicted and reported results should not be considered an indication
of future performance. Reported Web site activity and/or quotes are not
necessarily indicative of any present or future revenue. The Company will not
necessarily update the information in this press release if any forward-
looking statement later turns out to be inaccurate. Potential risks and
uncertainties include, among others, Quotesmith.com's limited e-commerce
operating history, anticipated losses, unpredictability of future revenues,
potential fluctuations in quarterly operating results, seasonality, consumer
trends, competition, risks of system interruption, the evolving nature of its
business model, the increasingly competitive online commerce environment,
dependence on continuing growth of online commerce and risks associated with
capacity constraints and the management of growth. More information about
potential factors that could affect the company's financial results is
included in the company's Annual Report on Form 10-K for the year ended
December 31, 2000, which is on file with the United States Securities and
Exchange Commission. Some insurance companies appear at Quotesmith.com for
purely informational purposes only and pay no compensation to Quotesmith.com
and some insurers pay commissions or fees to Quotesmith.com based upon premium
volume or traffic activity produced by Quotesmith.com. Quote availability by
state or any other factor is subject to change without notice.
Quotesmith.com is a service mark of Quotesmith.com, Inc. All other names
are trademarks of their respective owners.