SAN RAMON, Calif., Aug. 14, 2002 (PRIMEZONE) -- FiNet.com, Inc. (Nasdaq:FNCM), and its wholly owned subsidiaries ("the Company") today announced its consolidated second quarter financial results for the three-month period ended June 30, 2002.
Revenues for the three-month period ended June 30, 2002 increased 131%, or $1.7 million, to $3.0 million compared to the three-month period ended March 31, 2002. Revenues increased 58%, or $1.1 million, compared to the three-month period ended June 30, 2001. The increase in revenues is primarily attributable to an increase in loan settlements during the three-month period ended June 30, 2002.
Monument Mortgage's business-to-business segment increased loan production by 25%, to $52.9 million, compared to $42.5 million for the three-month period ended March 31, 2002. As a result, the business-to-business segment's relative contribution to total loan production increased to 68% from 56% during the three-month period ended March 31, 2002.
Loan settlements for the three-month period ended June 30, 2002 increased to $64.1 million, an increase of 140%, compared to $26.7 million for the three-month period ended March 31, 2002.
Gross margin for the three-month period ended June 30, 2002 increased to $1.0 million from $3,000 over the prior three month period ended March 31, 2002, and increased 67%, or $0.4 million, compared to the three-month period ended June 30, 2001. The increase in gross margin is attributable to a 140% increase in loan settlements, which was offset by a 56% increase in expenses directly related to production during the three-month period ended June 30, 2002.
Loss from operations for the three-month period ended June 30, 2002 declined by 47%, or $0.9 million, to $1.0 million compared to $1.9 million for the three-month period ended March 31, 2002 and declined by 58%, or $1.4 million compared to the three-month period ended June 30, 2001.
Dan Rawitch, FiNet's Chief Executive Officer, commented, "We are very pleased with the progress of our business-to-business segment during the second quarter, which contributed primarily to our 131% increase in revenues over the previous quarter. We are also pleased with the notable improvement in gross margin during the quarter. It is encouraging that we were able to grow revenue while maintaining tight control of expenses. We believe that the non-conforming Alt-A mortgage market continues to expand, and that our focus on this niche market is paying off, as evidenced by the increased loan production of this product over the previous quarter."
Rawitch continued, "We are also pleased that our major stockholders continue to demonstrate their support and confidence in our overall business strategy, as evidenced by FiNet's recent $1.35 million private placement. As part of our strategy, we plan to use a portion of the proceeds from the private placement to integrate into our mortgage operations certain assets we plan to purchase from R.E. Ventures, Inc., in particular the www.realestate.com domain name. We believe that our acquisition and integration of these assets will complement Monument Mortgage's business initiatives in the mortgage industry by providing an easily identifiable online destination that will strengthen our efforts to provide state-of-the-art online financial solutions.
Because the Nasdaq Stock Market marketplace rules require that our shareholders approve the issuance of FiNet common stock in connection with the R.E. Ventures acquisition, the acquisition is subject to shareholder approval.
Other Financial Highlights:
Net loss available to common stockholders for the three-month period ended June 30, 2002 decreased 26%, or $0.7 million, to $1.7 million compared to the three-month period ended March 31, 2002, and decreased 26%, or $0.7 million, from $2.4 million compared to the three-month period ended June 30, 2001.
Net loss per share for the three month period ended June 30, 2002 was $0.18 per share, compared to a net loss of $0.25 per share in the three month period ended March 31, 2002 and compared to a net loss of $0.25 per share in the three month period ended June 30, 2001.
As a result of the Company's recent private placement of preferred stock and warrants to purchase common stock, net cash for the three-month period ended June 30, 2002 increased 69%, or $451,000 to $1.1 million compared to the three-month period ended March 31, 2002. The private placement proceeds were offset primarily by the Company's net loss.
The total cash position of the Company as of June 30, 2002 was $2.4 million, of which $1.1 million was immediately available and $1.3 million was restricted.
About FiNet.com
FiNet.com, Inc., through its wholly owned subsidiaries (the "Company") is a holding company that provides diversified mortgage banking and brokering services. Monument Mortgage is a provider of both traditional and online mortgage services to a diversified customer base consisting of mortgage lenders, mortgage brokers, real estate agents and consumers. Monument Mortgage offers its services to mortgage broker businesses through www.monument.com, to real estate broker businesses and to consumers through www.homewardsolutions.com and www.finet.com.
Safe Harbor
Certain statements in this press release, including statements regarding the acquisition and integration of the R.E. Ventures assets 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 Company's ability to execute its strategy, the Company's ability to continue to increase loan production diversify its sources of revenue, and the Company's ability to obtain required shareholders approvals in connection with the Company's proposed acquisition of R.E. Ventures assets or successfully integrate those assets 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 (as amended) for the year ended December 31, 2001, and the Company's Quarterly Report on Form 10-Q (as amended) 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 June 30, 2002 March 31, 2002
--------------- ------------- --------------
Business-to-business $ 52,887 $ 42,528
Business-to-consumer 21,798 28,911
Loan center 3,328 4,027
------------- --------------
Total loan production $ 78,013 $ 75,466
============= ==============
Mortgages held for sale, net June 30, 2002 March 31, 2002
---------------------------- ------------- --------------
Business-to-business $ 10,199 $ 23,982
Business-to-consumer N/A N/A
Loan center N/A N/A
------------- --------------
Total mortgages held for sale,
net $ 10,199 $ 23,982
============= ==============
Three Months Ended
Loan settlements June 30, 2002 March 31, 2002
---------------- ------------- --------------
Business-to-business $ 64,143 $ 26,703
Business-to-consumer N/A N/A
Loan center N/A N/A
------------- --------------
Total loan settlements $ 64,143 $ 26,703
============== ==============
FiNet.com, Inc. and Subsidiaries
Consolidated Statements of Operations - Unaudited
(Amounts in thousands, except per share data)
Three Months Ended
------------------
June 30, 2002 March 31, 2002 June 30, 2001
------------- -------------- -------------
Revenues $ 3,001 $ 1,263 $ 1,855
Cost of revenues 1,961 1,260 1,278
--------- --------- ---------
Gross profit 1,040 3 577
Operating expenses:
General and
administrative 1,695 1,512 2,051
Marketing and
advertising 38 19 131
Depreciation and
Amortization 264 280 492
Special charges - - 301
Other 47 47 -
--------- --------- ---------
Total expenses 2,044 1,858 2,975
--------- --------- ---------
Loss from operations (1,004) (1,855) (2,398)
Other income and expense:
Other interest income 21 10 18
--------- --------- ---------
Loss before equity in
losses of equity-method
investee (983) (1,845) (2,380)
Equity in loss of equity-
method investee (499) (604) -
Income (loss) from
derivative instruments (20) 30 (14)
--------- --------- ---------
Loss before income taxes (1,502) (2,419) (2,394)
Income tax expense
(benefit) (5) 6 18
--------- --------- ---------
Loss before cumulative
effect of change in
accounting principle (1,497) (2,425) (2,412)
Cumulative effect of change
in accounting principle - - -
--------- --------- ---------
Net loss (1,497) (2,425) (2,412)
In-substance preferred
dividend (162) - -
Preferred dividend (10) - -
--------- --------- ---------
Net loss available to
common shareholders $ (1,669) $ (2,425) $ (2,412)
========= ========= =========
Basic and diluted net loss
per common share before
effect of change in
accounting principle $ (0.18) $ (0.25) $ (0.25)
Cumulative effect of change
in accounting principle - - -
--------- --------- ---------
Basic and diluted net loss
per common share $ (0.18) $ (0.25) $ (0.25)
========= ========= =========
Weighted average common
shares used in computing
basic and diluted net
loss per common share 9,537 9,527 9,502
========= ========= =========
Six Months Ended
----------------
June 30, 2002 June 30 2001
------------- ------------
Revenues $ 4,264 $ 4,453
Cost of Revenues 3,221 2,922
----------- -----------
Gross profit 1,043 1,531
Operating expenses:
General and administrative 3,207 4,676
Marketing and advertising 57 227
Depreciation and
amortization 544 998
Special charges - 301
Other 94 -
----------- -----------
Total expenses 3,902 6,202
----------- -----------
Loss from operations (2,859) (4,671)
Other income and expense:
Other interest income 31 28
---------- ----------
Loss before equity in losses
of equity-method investee (2,828) (4,643)
Equity in loss of equity-method
Investee (1,103) -
Income (loss) from derivative
instruments 10 (14)
---------- ----------
Loss before income taxes (3,921) (4,657)
Income tax expense (benefit) 1 33
---------- ----------
Loss before cumulative effect of
change in accounting principle (3,922) (4,690)
Cumulative effect of change in
accounting principle - (93)
---------- ----------
Net loss (3,922) (4,783)
In-substance preferred dividend (162) -
Preferred dividend (10) -
---------- ----------
Net loss available to common
shareholders $ (4,094) $ (4,783)
========== ==========
Basic and diluted net loss per
common share before effect
of change in accounting
principle $ (0.43) $ (0.49)
Cumulative effect of change
in accounting principle - (0.01)
---------- ----------
Basic and diluted net loss
per common share $ (0.43) $ (0.50)
========== ==========
Weighted average common shares
used in computing basic and
diluted net loss per common
share 9,532 9,500
========== ==========
FiNet.com, Inc. and Subsidiaries
Consolidated Balance Sheets
(Amounts in thousands, except per share data)
June 30 December 31
2002 2001
---------- -----------
Assets (Unaudited)
Cash and cash equivalents $ 1,105 $ 1,640
Restricted cash 1,319 2,159
Accounts and notes receivable,
net 1,136 136
Mortgages held for sale, net 10,199 8,365
Fixed assets, net 997 1,422
Investment in equity-method
investee 1,120 2,223
Derivative instruments in
connection with equity-method
investee 64 123
Other assets 547 1,187
--------- ---------
Total assets $ 16,487 $ 17,255
========= =========
Liabilities and Stockholders'
Equity
Liabilities:
Warehouse and other lines of credit $ 9,843 8,292
Accounts and notes payable 495 231
Accrued expenses and other
liabilities 4,946 4,953
--------- ---------
Total liabilities 15,284 13,476
Stockholders' equity:
Preferred stock, par value $0.01
per share
Authorized shares - 100
Issued and outstanding
convertible shares as of
June 30, 2002 and
December 31, 2001 - 34 and 0,
respectively - -
Common stock, par value $0.01
per share
Authorized shares - 49,900
Issued and outstanding shares as
of June 30, 2002 and
December 31, 2001 - 9,542 and
9,523 shares, respectively 1,029 1,029
Additional paid-in capital 111,443 109,925
Accumulated deficit (111,269) (107,175)
--------- ---------
Total stockholders' equity 1,203 3,779
--------- ---------
Total liabilities and stockholders'
equity $ 16,487 $ 17,255
========= =========