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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 4, 2000
Date of report (Date of earliest event reported)
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INSWEB CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-26083 94-3220479
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or organization) Identification No.)
901 Marshall Street, Redwood City, California 94063
(Address of principal executive offices)
(650) 298-9100
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
A copy of the press release issued by InsWeb Corporation, a Delaware corporation
(the "Company") on April 18, 2000 is filed as Exhibit 99.1 to this Current
Report and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99.1 Press Release issued by the Company on April 18, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
InsWeb Corporation
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(Registrant)
Dated: May 4, 2000 By: /s/ Marian Taylor
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Name: Marian Taylor
Title: Senior Vice President, Secretary
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EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release issued by the Company on April 18, 2000
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INSWEB CORPORATION
FOR IMMEDIATE RELEASE
MEDIA RELATIONS CONTACT:
Greg Jones
InsWeb Corporation
650-817-0213
[email protected]
INVESTOR RELATIONS CONTACT:
Alex Wellins, Jennifer Jarman
the blueshirt group
415-217-7722
[email protected]
INSWEB CORPORATION REPORTS FIRST QUARTER RESULTS
- - FIRST QUARTER REVENUES INCREASE 160% TO $8.6 MILLION; A NET LOSS OF
$0.37 PER SHARE IS SLIGHTLY BETTER THAN FIRST CALL'S CONSENSUS
ESTIMATES
- - LOWER REVENUES ARE EXPECTED DUE TO A CARRIER'S NON-RENEWAL
- - THE COMPANY PLANS TO REDUCE WORKFORCE AND IMPLEMENT OTHER
COST-REDUCTION MEASURES
REDWOOD CITY, Calif., April 18, 2000 - InsWeb Corporation (Nasdaq: INSW), a
leading provider of online insurance services, today reported financial results
for the first quarter ended March 31, 2000. Revenues for the first quarter
totaled $8.6 million, an increase of 160% from revenues of $3.3 million in first
quarter 1999, and a sequential increase of 34% over revenues of $6.4 million in
fourth quarter 1999. InsWeb reported a net loss for the first quarter of $13.1
million, or $0.37 per share, slightly better than First Call's consensus
estimates. This compares to a net loss of $6.0 million, or $0.24 per pro forma
share, for the first quarter of the prior year.
During first quarter 2000, more than 772,000 shopping sessions were
completed at InsWeb, a 170% increase over the more than 286,000 shopping
sessions completed in first quarter 1999, and a sequential increase of 27% over
the more than 610,000 shopping sessions completed in fourth quarter 1999. InsWeb
recorded more than 3.9 million unique user sessions during the first quarter, an
increase of 225% over the approximately 1.2 million unique user sessions
recorded in the prior year quarter, and a sequential increase of 44% over the
2.7 million unique user sessions in fourth quarter 1999.
In the coming months, however, InsWeb said it expects a material
decline in revenues. State Farm Insurance, which currently accounts for
approximately 30% of all InsWeb revenues and is the Company's largest customer,
informed InsWeb last Friday, April 14, that it would not renew its participation
agreement with the Company. Effective May 1, State Farm will no longer
participate in InsWeb's marketplaces for auto, term life, homeowners,
condominium and renters insurance.
With State Farm's non-renewal, auto insurance coverage will no longer
be available to consumers in South Carolina and Vermont, and homeowners and
renters insurance will be available in fewer states. Term life offerings should
not be affected in any state.
"We believe that State Farm's non-renewal will materially reduce our
revenues for fiscal year 2000, which have grown significantly to this point,"
said Hussein Enan, Chief Executive Officer of InsWeb. "Our preliminary estimate
is that revenues for the second quarter of this year will be approximately $5
million. However, with more than $75 million in cash and short-term investments
on hand, we are confident that we will not require additional cash in the short
term. We are committed to managing our expenses efficiently. Effective
immediately, we are reducing our workforce by about 10%. We also intend to
reduce our sales and marketing expenses to align with revenue expectations,
while retaining our focus on the core business and aggressively pursuing key
initiatives that leverage our technology platform.
"We will work hard to replace the loss of State Farm with revenues from
other carriers. Naturally, we were surprised and disappointed to learn of State
Farm's decision. In speaking with State Farm representatives, we believe their
reasons for not renewing their contract with InsWeb were specific to their own
distribution model, and, in our view, do not jeopardize the viability of our
online marketplace concept."
In other recent business developments:
- - In March, InsWeb unveiled new technology that enables online consumers
to buy, bind, and print proof of auto coverage. The Company initially
launched this service in California, and expects to roll out the new
feature in other
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states later this year.
- - InsWeb continued to expand its agency operations. The Company is now
closing business on behalf of seven auto insurers in several western
states.
- - InsWeb recently integrated with three AOL-owned properties - Netscape
Netcenter, CompuServe and Digital City - as well as with Money.com and
Capital One. The Company now has more than 180 online marketing and
distribution partners, including other notable companies such as
Yahoo!, MSN, Snap and E*TRADE.
- - Earlier this month, InsWeb and joint venture partner SOFTBANK Finance
Corp. launched online marketplace InsWeb Japan K.K. (www.insweb.co.jp)
with five leading auto insurers in the world's second-largest insurance
market. InsWeb-branded Internet sites currently operate in the U.S. and
Japan, markets which together account for 56% of all personal and
commercial premiums worldwide.
- - The Company added four carriers to its auto and homeowners marketplaces
in the first quarter.
- - Also in the first quarter, InsWeb expanded its customer service
program, enabling consumers to access live, 24x7 support via online
chat, e-mail and toll-free telephone.
About InsWeb
InsWeb (www.insweb.com) enables online consumers to compare free,
multiple quotes sponsored by more than 50 of the nation's leading insurers.
Featuring auto, motorcycle, term life, health, homeowners, renters, condo and
pet insurance, InsWeb also provides live, 24x7 customer service, interactive
tools and research capabilities, and is accessible from more than 180 leading
sites, including Yahoo!, MSN, Snap.com, LookSmart, Netscape Netcenter and
E*TRADE. InsWeb's brand and technical platform supports InsWeb Japan K.K., a
joint venture co-founded with SOFTBANK Finance Corp. InsWeb is headquartered in
Redwood City, Calif.
# # #
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; optimism about the
results of certain strategic and consumer initiatives; 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 demand or acceptance; the willingness of insurance companies to offer
their products over the Internet; further changes in the Company's relationships
with existing insurance companies and/or strategic 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 acceptance of new product or
service offerings, such as binding online, policy fulfillment and other agency
based services; implementation and acceptance of new initiatives in the U.S. and
abroad, such as InsWeb Japan; insurance 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" is a registered service mark of InsWeb Corporation. All marks above are
those of InsWeb Corporation, except for those of insurance carriers, brokers,
agents, industry organizations, financial institutions, online partners, service
providers, other mentioned companies and educational institutions, which are the
marks of their respective entities.
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InsWeb Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands except for per share amounts)
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<CAPTION>
For the Three Months
Ended March 31,
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2000 1999
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(unaudited)
<S> <C> <C>
Revenues:
Transaction fees $ 7,090 $ 2,868
Development and maintenance fees 1,518 443
Other revenues 9 -
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Total revenues 8,617 3,311
Operating expenses:
Product development 2,780 1,551
Sales and marketing 14,303 3,849
General and administrative 4,809 2,392
Amortization of intangibles 782 782
Amortization of stock-based compensation 347 290
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Total operating expenses 23,021 8,864
Operating loss (14,404) (5,553)
Other income 50 -
Interest income (expense), net 1,277 (468)
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Net loss $ (13,077) $ (6,021)
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Loss per share - basic and diluted (0.37) (0.38)
Shares 34,912 15,976
Loss per share- proforma (0.37) (0.24)
Shares - Proforma 34,912 25,456
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Note: Proforma shares for periods prior to the Company's initial public offering
in July 1999 assume conversion of the then outstanding preferred shares.
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InsWeb Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands)
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<CAPTION>
March 31, December 31,
2000 1999
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 37,588 $ 25,689
Short-term investments 38,669 64,063
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Total cash and short-term investments 76,257 89,752
Accounts receivable 4,697 4,268
Prepaid expenses and other current assets 6,708 2,974
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Total current assets 87,662 96,994
Property and equipment, net 8,981 7,357
Investment in joint venture 1,482 1,450
Intangible assets, net 4,786 5,568
Long term investments 4,982 4,978
Deposits 1,959 1,934
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Total assets $ 109,852 $ 118,281
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,544 $ 289
Accrued expenses 5,871 5,160
Deferred revenue 309 183
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Total current liabilities 7,724 5,632
Note payable to strategic partner 1,460 1,464
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Total liabilities 9,184 7,096
Total stockholders' equity 100,668 111,185
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Total liabilities and stockholders' equity $ 109,852 $ 118,281
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