Quotesmith.com Inc., the online insurance broker that provides instant quotes from more than 300 leading companies, announced financial results for the second quarter ended June 30.
“Quotesmith.com delivered an outstanding quarter of progress and momentum,” said Robert Bland, chairman and CEO. “We slashed our net loss, grew revenues and made solid progress with our new customer revenue and acquisition cost economics. We are very optimistic about the future of online insurance as an exciting, new and emerging sector.”
Quotesmith.com CFO, Phillip Perillo, added, “We achieved excellent system leverage in our business model during the second quarter of 2002. Per transaction revenue (total revenues divided by policies sold) rose 25 percent to $504 in the second quarter vs. $404 last year, while our per-policy marketing costs decreased by 78 percent to $105 compared to $483 in the second quarter of 2001. We also achieved substantial traction in marketing by selling more than nine policies per thousand dollars of marketing spent compared to selling two policies for every thousand dollars spent in marketing during the second quarter of 2001.”
Revenues for the second quarter ended June 30, 2002 were $3.2 million, a 49 percent increase from revenues of $2.1 million reported for the second quarter of 2001. Net loss for the second quarter decreased to $222,000, or $0.04 per share, compared with a net loss of $2.6 million, or $0.48 per share reported for the second quarter of 2001.
On a year-to-date basis, the company reported revenues of $5.77 million for the first six months of 2002 as compared to $4.55 million for the same period in 2001. Net loss for the first six months of 2002 totaled $922,000, or $0.18 per share as compared to a net loss of $5.05 million, or $0.89 per share, for the first six months of 2001.
Quotesmith.com ended the quarter with $16.4 million, or $3.32 per share, in cash and short-term investments.
For the second quarter, Quotesmith.com reported 6,343 policies sold, representing an increase of 19 percent from the 5,314 policies sold in the second quarter of 2001. Policies sold for the first six months of 2002 amounted to 11,399, down two percent from the 11,633 paid policies reported in the like period of 2001.
Quotesmith.com is revising the financial targets for 2002 that were announced on Dec. 7, 2001 and reaffirmed on Jan. 23, 2002. The company previously anticipated 2002 revenues of $10 to $11 million, a net loss of less than $1 million and year-end cash and investment balances of $17 to $18 million. The company now anticipates 2002 revenues of $10 to $11 million, a net loss of $1.5 to $2 million and year-end cash and investment balances of $14 to $15 million. Depreciation and amortization charges for 2002 are expected to total $1.5 million. The increase in projected net loss is due to higher levels of planned technology spending and other operations costs.
Quotesmith.com believes that its current capital structure, including cash and short-term investments of $16.4 million, is adequate to reach profitability without the necessity of additional debt or equity financing.