SAN RAMON, Calif., May 16, 2002 (PRIMEZONE) -- FiNet.com, Inc. (Nasdaq:FNCM), and its wholly owned subsidiaries (the "Company") today released financial results for the quarter ended March 31, 2002.
Operational highlights of the quarter ended March 31, 2002:
-- Total loan production for Monument Mortgage, Inc. ("Monument
Mortgage") increased by 8% from $69.9 million to $75.5 million
compared to the quarter ended December 31, 2001.
-- Loan production recorded by Monument Mortgage's business-to-
business segment increased by 34% to $42.5 million, compared to
$31.7 million for the quarter ended December 31, 2001. As a
result, Monument Mortgage's business-to-business segment relative
contribution to total loan production increased to 56% from 45% in
the quarter ended December 31, 2001.
-- Loan production recorded by Monument Mortgage's business-to-
consumer segment decreased by 24% to $28.9 million, compared to
$38.2 million for the quarter ended December 31, 2001. As a
result, Monument Mortgage's business-to-consumer segment relative
contribution to total loan production decreased to 38% from 55% in
the quarter ended December 31, 2001.
-- Loan production recorded by Monument Mortgage's loan center
segment increased by 8,654% to $4.0 million, compared to
$46 thousand for the quarter ended December 31, 2001. As a result,
Monument Mortgage's loan center segment relative contribution to
total loan production increased to 5% from 0% in the quarter ended
December 31, 2001.
-- Mortgages held for sale as of March 31, 2002 increased to
$24.0 million, an increase of 187%, when compared to $8.4 million
for the quarter ended December 31, 2001.
-- Loan settlements for the quarter ended March 31, 2002 decreased to
$26.7 million, a decrease of 13%, when compared to $30.6 million
for the quarter ended December 31, 2001.
Financial highlights of the quarter ended March 31, 2002:
-- Revenue for the quarter ended March 31, 2002 decreased by 21% from
$1.6 million to $1.3 million compared to the quarter ended
December 31, 2001. The reduction in revenues is primarily
attributable to the proportional decrease in the amount of loan
settlements compared to the amount of loan production during the
same period. During the quarter ended March 31, 2002, Monument
Mortgage's business-to-business segment only sold $26.7 million
(i.e., only 63%) of its same period loan production; whereas
during the quarter ended December 31, 2001 Monument Mortgage's
business-to-business segment sold $30.6 million (i.e., 97%) of its
same period loan production.
-- Gross margin for the quarter ended March 31, 2002 decreased by
101% from $0.6 million to ($7) thousand compared to the quarter
ended December 31, 2001. The reduction in gross margin resulted
from the revenue reduction primarily derived from the decrease in
loan settlements and also from increased headcount of Monument
Mortgage's production units.
-- Operating expenses for the quarter ended March 31, 2002 declined
by 16% from $2.2 million to $1.8 million compared to the quarter
ended December 31, 2001. The reduction in operating expenses is
primarily attributable to a significant decrease in non-production
related employee headcount and a substantial decrease in
professional fees incurred.
-- Loss from operations for the quarter ended March 31, 2002
increased by 14% from $1.6 million to $2.2 million compared to the
quarter ended December 31, 2001.
-- Other income and expense for the quarter ended March 31, 2002
declined by 5% from $0.6 million to $0.6 million compared to the
quarter ended December 31, 2001. The decline in other income and
expense is attributable to FiNet's equity in loss of its equity-
method investee, CriticalPoint Software ("CriticalPoint).
Currently, FiNet records 100% of CriticalPoint's total losses.
As losses in CriticalPoint are recorded until the underlying
investments are reduced to zero, FiNet expects that losses in its
equity-method investee will continue to decline, if no additional
investment in CriticalPoint will be made.
-- Net loss per share for the quarter ended March 31, 2002 declined
by 9% from $0.23 per share to $0.25 per share compared to the
quarter ended December 31, 2001.
Financial condition as of March 31, 2002:
-- As a result of reduced revenues, net cash used in operating
activities during the quarter ended March 31, 2002 was $921
thousand, an increase of 429% from $174 thousand during the
quarter ended December 31, 2001. Net cash used by investing
activities during the quarter ended March 31, 2002 was
$68 thousand, an increase of 871% from $7 thousand during the
quarter ended December 31, 2001.
-- The total cash position of the Company as of March 31, 2002 was
$2.1 million, of which $0.7 million was immediately available and
$1.4 million was restricted.
"We are very pleased to see that our strategy is delivering improved results. We believe these results show that our focus on the business-to-business segment as our shortest path to profitability is proving to be correct. Loan production is up substantially, which means that revenues should increase accordingly. We were disappointed we could not materialize the benefits of this production increase during this first quarter of 2002, as we sold a smaller than usual percentage of the loan production. We intend to compensate this effect in the coming quarters," commented Dan Rawitch, FiNet's Chief Executive Officer.
"As part of our strategy, we are diversifying our sources of revenue, and we are very enthusiastic with the progress already achieved by the loan center segment. And we have continued to cut our costs, in spite of the growth of our combined business activities and our recent increase in production related headcount. We believe this trend, together with the other initiatives that we have recently announced to the market, namely the acquisition of RealEstate.com, are, in our opinion, positioning FiNet to deliver enhanced shareholder value," added Dan Rawitch.
About FiNet.com
FiNet.com, Inc., through its wholly owned subsidiaries (the "Company"), is a leading e-commerce provider of financing services that facilitate home ownership, including a variety of technology and loan products and automated services for mortgage broker businesses, real estate broker businesses and for consumers. The Company offers online solutions to mortgage broker businesses through Monument Mortgage at www.monument.com, to real estate broker businesses at www.homewardsolutions.com and residential financial services directly to consumers at www.finet.com.
Safe Harbor
Certain statements in this press release, including statements regarding an increase in wholesale originations and the finalization of additional credit facilities with third parties 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, including but not limited to expectations concerning the investment in CriticalPoint Software; the Company's ability to execute its strategy; the Company's ability continue to increase loan production, diversify its sources of revenue, reduce expenses or access credit facilities and sources of funding: and the Company's ability to obtain required approvals in connection with the acquisition of the RealEstate.com assets or successfully integrate those asset's into the Company's operations, the Company's actual results may differ materially from those expressed or implied by such forward-looking statements. Investors are encouraged to read the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2001, and the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, which are on file with the Securities and Exchange Commission.
FiNet.com, Inc.'s Subsidiary - Monument Mortgage, Inc.
Supplemental Segment Information - Unaudited
(Amounts in thousands)
Three Months Ended
------------------
Loan production March 31, 2002 December 31, 2001
--------------- -------------- -----------------
Business-to-business $ 42,528 $ 31,655
Business-to-consumer 28,911 38,237
Loan center 4,027 46
-------------- --------------
Total loan production $ 75,466 $ 69,938
============== ==============
Three Months Ended
------------------
Mortgages held for sale, net March 31, 2002 December 31, 2001
---------------------------- -------------- -----------------
Business-to-business $ 23,982 $ 8,365
Business-to-consumer N/A N/A
Loan center N/A N/A
-------------- --------------
Total mortgages held
for sale, net.. $ 23,982 $ 8,365
============== ==============
Three Months Ended
------------------
Loan settlements March 31, 2002 December 31, 2001
---------------- -------------- -----------------
Business-to-business $ 26,703 $ 30,599
Business-to-consumer N/A N/A
Loan center N/A N/A
-------------- --------------
Total loan settlements $ 26,703 $ 30,599
============== ==============
FiNet.com, Inc. and Subsidiaries
Consolidated Statements of Operations - Unaudited
(Amounts in thousands, except per share data)
Three Months Ended
------------------
March 31, 2002 December 31, 2001
-------------- -----------------
Revenues $ 1,263 $ 1,600
Cost of revenues 1,270 1,029
-------------- --------------
Gross profit (loss) (7) 571
Operating expenses:
General and administrative 1,502 1,745
Marketing and advertising 19 114
Depreciation and
amortization 280 264
Special charges 47 73
-------------- --------------
Total expenses 1,848 2,196
-------------- --------------
Loss from operations (1,855) (1,625)
Other income and expense:
Equity in loss of equity-
method investee (604) (615)
Income from derivative
instruments 30 2
Other interest income 10 21
-------------- --------------
Loss before income taxes (2,419) (2,217)
Income tax expense 6 (8)
Cumulative effect of change
in accounting principle -- --
-------------- --------------
Net loss available to
common shareholders $ (2,425) $ (2,209)
============== ==============
Basic and diluted net loss
per common share before
effect of change in
accounting principle (0.25) (0.23)
Cumulative effect of change
in accounting principle -- --
-------------- --------------
Basic and diluted net
loss per common share $ (0.25) $ (0.23)
============== ==============
Weighted average common
shares used in computing
basic and diluted net
loss per common share 9,527 9,523
============== ==============
FiNet.com, Inc. and Subsidiaries
Consolidated Balance Sheets
(Amounts in thousands, except per share data)
March 31 December 31
2002 2001
-------------- ------------
Assets (Unaudited)
Cash and cash equivalents $ 654 $ 1,640
Restricted cash 1,450 2,159
Accounts and notes
receivable, net 486 136
Mortgages held for sale, net 23,982 8,365
Fixed assets, net 1,210 1,422
Investment in equity-method
investee 1,619 2,223
Derivative instruments in
connection with equity-
method investee 84 123
Other assets 886 1,187
-------------- --------------
Total assets $ 30,371 $ 17,255
============== ==============
Liabilities and
Stockholders' Equity
Liabilities:
Warehouse and other lines
of credit $ 23,851 $ 8,292
Accounts and notes
payable 250 231
Accrued expenses and
other liabilities 4,913 4,953
-------------- --------------
Total liabilities 29,014 13,476
Stockholders' equity:
Preferred stock, par value
$0.01 per share
Authorized shares - 100
Issued and outstanding
shares - none -- --
Common stock, par value
$0.01 per share
Authorized shares - 49,900
Issued and outstanding
shares as of March 31, 2002
and December 31, 2001 -
9,534 and 9,523 shares,
respectively 1,029 1,029
Additional paid-in capital 109,928 109,925
Accumulated deficit (109,600) (107,175)
-------------- --------------
Total stockholders' equity 1,357 3,779
Total liabilities and
stockholders' equity $ 30,371 $ 17,255
============== ==============