California-based InsWeb Corp. announced results for the fourth quarter ended Dec. 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 CEO 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.
Commenting on the company’s financial outlook, CFO Bill Griffin added, “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.”
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