<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
March 20, 2000
Date of report (Date of earliest event reported)
Commission File Number: 0-18108
FINET.COM, INC.
Exact name of registrant as specified in its charter)
DELAWARE
(State or jurisdiction of
incorporation or organization)
2527 CAMINO RAMON, SUITE 200
SAN RAMON, CA 94583
(Address of principal executive office)
94-3115180
(IRS Employer Identification Number)
Telephone Number: (925) 242-6550
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS
On February 22, 2000 FiNet.com, Inc. announced earnings for the fiscal
year ended December 31, 1999. A copy of the press release is attached
as Exhibit 99.1.
ITEM 7. EXHIBITS
EXHIBIT 99.1 Press Release dated February 22, 2000 in connection
with the earnings announcement.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934,
THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
FINET.COM, INC.
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<S> <C>
Date: March 20, 2000 /s/ GARY A. PALMER
------------------------------
GARY A. PALMER
(PRINCIPAL FINANCIAL OFFICER)
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<PAGE> 3
FINET.COM REPORTS RESULTS FOR THE PERIOD ENDING DECEMBER 31, 1999
Loan Origination Volumes Rise 26% and Revenues Increase 18% Over Prior
Period
SAN RAMON, CA, February 22, 2000 - FiNet.com Inc. (NASDAQ: FNCM) owner
and operator of
www.FiNet.com, "America's Home Finance Network," today announced
operating results for the three-month and eight-month periods ended
December 31, 1999. As of January 1, 2000, FiNet.com changed to a
calendar year reporting period from a fiscal year ending April 30. The
results represent the third consecutive increase in quarterly revenues
for the company.
Revenues for the three month period ended December 31, 1999 increased
18% to $2.79 million compared to $2.37 million in the three month
period ended October 31, 1999. Net loss for the period increased to
$13.0 million compared to $8.2 million in the previous period as a
result of increased expenses related to moving and other facilities
costs, increased use of consultants to complete technology projects,
increased warehousing interest expense and asset valuation adjustments.
Net loss per share was $0.14 compared to a loss of $0.09 in the three
months ended October 31, 1999 based on 93.2 million shares
outstanding.
During the period, loan origination volume rose by over 20% for the
second consecutive quarter. In addition, business-to-business volumes
increased 13%, accounting for 76% of loan origination volume.
"Despite an industry-wide decline in mortgage originations, FiNet.com
continues to grow revenues and loan origination volumes," stated Rick
Cossano, President & CEO of FiNet.com. "Since my arrival, we are
taking the necessary steps to aggressively cut costs, improve
productivity, maintain the momentum in growth, produce positive
cashflow from operations and target profitability within the next two
years. At the same time, I want to leverage our technological
expertise by using our iQualify technology to empower mortgage brokers
with the resources to close loans faster."
The Company also announced the following significant accomplishments:
The Lowestrate.com acquisition contributed 60% of Consumer Direct
mortgage originations and 15% of overall mortgage originations;
Home purchase transactions rose to 61% of total volume, as compared
to 58% in the previous period. This reduces FiNet.com's dependence
on the interest rate sensitive refinance sector of the market;
The Company reduced headcount approximately 25% in January;
Following a review of acquisition costs, virtually all consumer
marketing arrangements were terminated. The Company is identifying
and pursuing profitable consumer marketing arrangements; and
Robert Snow joined the Company as Executive Vice President, Business
to Business. Mr. Snow brings over twenty years of B2B experience
as well as over 100 top producing mortgage broker relationships to
FiNet.com. Previously, Mr. Snow was the top performing regional
vice president for Countrywide Home Loans.
<PAGE> 4
Rick Cossano, President & CEO will host a conference call to discuss
the results and outline his strategy for FiNet.com at 5:00 PM Eastern
Time. The conference call can be accessed by calling 415-247-8525. The
call will also be simulcast over the Internet on the Vcall web site at
http://www.vcall.com. Listeners should go to the web site ten minutes
before the call and download the necessary audio software. A replay of
the call will be available through February 29, 2000 by calling 800-633-
8284 from the continental U.S., and 858-812-6440 internationally. The
reservation number for the replay is 14343391.
About FiNet.com
FiNet.com, Inc., including its wholly owned subsidiaries (the
"Company") is a leading provider of e-commerce home financing services
that facilitate home ownership, including a variety of technology-based
products and automated services for consumers and mortgage broker
businesses. The Company offers online financing solutions directly to
consumers through its www.finet.com web site and to mortgage broker
businesses through Monument Mortgage and its web site www.monument.com.
Safe Harbor
Certain statements in this press release, including statements
regarding the anticipated development and expansion of the Company's
business, and the intent, belief or current expectations of the
Company, its directors or its officers, are "forward-looking"
statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995). Because such statements are subject to
risks and uncertainties, actual results may differ materially from
those expressed or implied by such forward-looking statements.
<PAGE> 5
FiNET.COM, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS*
(Amounts in thousands)
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<CAPTION>
October 31 December 31
1999 1999
---------- ----------
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 27,993 $18,626
Restricted cash 1,838 10,403
Marketable equity securities 2,700 2,674
Accounts receivable 2,888 2,363
Mortgages held for sale 42,280 78,691
Furniture, fixtures & equipment 3,475 4,471
Goodwill 1,704 1,757
Other 1,587 823
---------- ----------
Total assets $ 84,465 $119,808
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Warehouse and other lines of credit $ 37,925 $ 80,453
Accounts payable 137 2,379
Notes payable and capitalized leases 182 141
Accrued expenses and other liabilities 5,895 6,462
---------- ----------
Total liabilities $ 44,139 $ 89,435
Stockholders' equity:
Common stock $ 933 $ 934
Paid-in capital 100,966 100,943
Accumulated deficit (62,452) (73,208)
Other comprehensive income 879 1,704
---------- ----------
Total stockholders' equity $ 40,326 $ 30,373
---------- ----------
Total liabilities and stockholders' equity $ 84,465 $119,808
========== ==========
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* Includes discontinued business units.
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FiNET.COM, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS*
(Dollars and amounts in thousands - except per share amounts)
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<CAPTION>
3 Months Ended 8 Months Ended
October 31 December 31 December 31
1999 1999 1998 1999
------- ------- ------- ------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 2,371 $ 2,794 $16,859 $ 6,070
Cost of Revenues 2,220 4,261 14,042 8,423
------- ------- ------- ------
Gross Profit 151 (1,467) 2,817 (2,353)
Operating Expenses 8,382 11,504 12,542 22,975
------- ------- ------- ------
Loss from Operations (8,231) (12,971) (9,725) (25,328)
Other Expense/Pref. Dividend - - 3,102 -
------- ------- ------- ------
Net Loss $ (8,231) $(12,971) $(12,827) $(25,328)
======= ======= ======= =======
Basic and diluted
net loss per
common share $ (0.09) $ (0.14) $(0.37) $(0.28)
------- ------- ------- ------
Shares used in computing
basic and diluted share data 92,276 93,228 34,316 89,517
*Includes discontinued business units.
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Appendix R
Pro Forma Revenues
(Continuing Business Units Only)*
($000's)
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<CAPTION>
3 Months Ended
October 31 December 31
1999 1999
------- -------
Total FiNet.com Revenues
- ------------------------
<S> <C> <C>
Warehouse interest income $ 608 $ 1,147
Gain on sale of mortgage loans 848 620
Loan brokerage fees 249 201
Other 566
775
------- -------
Total Revenues 2,271 2,743
Cost of Revenues 2,002 3,633
------- -------
Gross Profit 269 (890)
Consumer Segment Revenues
-------------------------
Warehouse interest income 30 88
Gain on sale of mortgage loans (30) 88
Loan brokerage fees 249 201
Other 25 -
------- -------
Total Consumer Revenues 274 377
Cost of Revenues 513 872
------- -------
Gross Profit (239) (495)
Business-to-Business (B2B) Segment Revenues
-------------------------------------
Warehouse interest income 578 1,059
Gain on sale of mortgage loans 878 532
Other 23 -
------- -------
Total B2B Revenues 1,479 1,591
Cost of Revenues 1,489 2,252
------- -------
Gross Profit (10) (661)
*Excludes discontinued business units and corporate segment
</TABLE>
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Appendix E
Pro Forma Corporate Expenses
(Continuing Business Units Only)*
($000's)
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<CAPTION>
3 Months Ended
October 31 December 31
1999 1999
------- -------
FiNet.com Expenses
- ------------------
<S> <C> <C>
General & Administrative $ 4,203 $ 6,278
Marketing & Advertising 3,230 2,724
Depreciation & Amortization 302 377
Other 326 1,278
------- -------
Total Operating Expenses $ 8,061 $10,657
Warehouse Interest Expense $ 152 $ 829
*Excludes discontinued business units
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Appendix O
Other Data
(Continuing Business Units Only)
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<CAPTION>
Three Months Ended
October 31 December 31
1999** 1999
------- -------
Total FiNet.com*
- ---------------
<S> <C> <C>
Loans Closed 1,260 1,586
Revenues (per loan) $1,391 $1,730
Cost of Revenues (per loan) $1,589 $2,291
Marketing (per loan) $2,563 $1,716
Consumer Channel
----------------
Loans Brokered 130 281
Loans Funded 67 100
------- --------
Total Loans Closed 197 381
Revenues (per loan) $1,391 $ 990
Cost of Revenues (per loan) $2,604 $2,289
Marketing (per loan) $14,599 $5,120
Business to Business Channel
---------------------------
Loans Closed 1,063 1,205
Revenues (per loan) $1,391 $1,320
Cost of Revenues (per loan) $1,401 $1,869
Marketing (per loan) $ 333 $ 641
*Excludes discontinued business units and corporate segment
** Includes partial period data from Lowestrate.com
</TABLE>
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Appendix V
Loan Volumes
(Continuing Business Units Only)*
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<CAPTION>
Three Months Ended
October 31 December 31
1999** 1999
------- -------
Total FiNet.com
- ---------------
<S> <C> <C>
Number of unique visitors 458,498 502,031
Number of applications 2,835 2,654
Number of closed loans 1,260 1,586
Amount of closed loans ($000) 204,442 250,369
Refinance loans (% of # of loans) 42% 38%
California loans (% of # of loans) 81% 74%
Consumer Channel
----------------
Number of unique visitors*** 458,498 502,031
Number of applications 1,068 767
Number of closed loans 197 381
Amount of closed loans ($000's) 32,400 59,210
Refinance loans (% of # of loans) 42% 39%
California loans (% of # of loans) 54% 31%
Business-to-Business Channel
----------------------------
Number of applications 1,767 1,887
Number of closed loans 1,063 1,205
Amount of closed loans ($000's) 172,022 191,159
Refinance loans (% of # of loans 41% 38%
California loans (% of # of loans) 87% 86%
*Excludes discontinued business units
** Includes partial period data from Lowestrate.com
*** Unique visitors are user sessions non-inclusive of pages viewed.
One user can tally upwards of 10 page views during one unique user
session.
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