SAN RAMON, Calif., Oct. 31, 2002 (PRIMEZONE) -- FiNet.com, Inc. (Nasdaq:FNCM), and its wholly owned subsidiaries ("the Company") today announced that the Company has received a Nasdaq determination letter dated October 23, 2002. The Company also announced its consolidated third quarter financial results for the three-month period ended September 30, 2002.
Nasdaq Determination Letter
The Nasdaq determination letter notifies the Company that it has failed to comply with either the minimum $2,000,000 net tangible assets or the minimum $2,500,000 stockholders' equity requirements for continued listing as set forth in Marketplace rule 4310(c)(2)(B). The letter states that as a result of its failure to maintain the minimum requirements, the Company's securities will be delisted from The Nasdaq SmallCap Market at the opening of business on October 31, 2002.
Once delisted, the Company expects that its stock will trade on the Nasdaq-operated Over-the-Counter Bulletin Board ( OTCBB ). There can be no assurance that there will be a market maker for the Company's securities or that an active market will develop.
Third Quarter Financial Results
Revenues for the three-month period ended September 30, 2002 decreased 40%, or $1.2 million, to $1.8 million compared to the three-month period ended June 30, 2002. Revenues remained constant compared to the three-month period ended September 30, 2001. The decrease in revenues is primarily attributable to a substantial decrease in loan settlements during the three-month period ended September 30, 2002.
The business-to-business segment decreased loan production by 17%, to $43.8 million, compared to $52.9 million for the three-month period ended June 30, 2002. The business-to-business segment's relative contribution to total loan production remained the same compared to the three-month period ended June 30, 2002.
Loan settlements for the three-month period ended September 30, 2002 decreased to $39.0 million, a decrease of 39%, compared to $64.1 million for the three-month period ended June 30, 2002.
Gross margin for the three-month period ended September, 2002 decreased to $(0.2) million from $1.0 million from the prior three month period ended June 30, 2002, and decreased 133%, or $0.8 million, compared to the three-month period ended September 30, 2001. The decrease in gross margin is attributable to a 39% decrease in loan settlements.
Loss from operations for the three-month period ended September 30, 2002 increased by 180%, or $1.8 million, to $2.8 million compared to $1.0 million for the three-month period ended June 30, 2002 and increased by 27%, or $0.6 million compared to the three-month period ended September 30, 2001.
Other Financial Highlights
Net loss available to common stockholders for the three-month period ended September 30, 2002 increased 167%, or $2.5 million, to $4.0 million compared to the three-month period ended June 30, 2002, and increased 82%, or $1.8 million, from $2.2 million compared to the three-month period ended September 30, 2001. Net loss also included a write-off amount of $0.9 million representing the remaining equity balance of FiNet's Equity-Method Investee. FiNet's senior management along with its Board of Directors made a determination that a decline in fair value of its investment occurred and it is other-than-temporary.
Net loss per share for the three-month period ended September 30, 2002 was $0.42 per share, compared to a net loss of $0.18 per share in the three-month period ended June 30, 2002 and compared to a net loss of $0.23 per share in the three month period ended September 30, 2001.
The total cash position of the Company as of September 30, 2002 was $2.3 million, of which $1.0 million was immediately available and $1.3 million was restricted.
About FiNet.com
FiNet.com, Inc., is a financial services holding company. Monument Mortgage, Inc., a wholly owned subsidiary conducts diversified mortgage banking and brokering operations and 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 and to real estate broker businesses and to consumers through www.homewardsolutions.com and www.finet.com.
Safe Harbor
Certain statements in this press release, 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 the Company's ability to trade its common stock in the Nasdaq-operated Over-the-Counter Bulletin Board, 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/A (as amended) for the year ended December 31, 2001, and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 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 Sept. 30, 2002 June 30, 2002 March 31, 2002
--------- --------- ---------
Business-to-business $ 43,813 $ 52,887 $ 42,528
Business-to-consumer 20,423 21,798 28,911
Loan center 1,590 3,328 4,027
--------- --------- ---------
Total loan production $ 65,826 $ 78,013 $ 75,466
========= ========= =========
Three Months Ended
Mortgages held for
sale, net Sept. 30, 2002 June 30, 2002 March 31, 2002
--------- --------- ---------
Business-to-business $ 8,064 $ 10,199 $ 23,982
Business-to-consumer N/A N/A N/A
Loan center N/A N/A N/A
--------- --------- ---------
Total mortgages held
for sale, net $ 8,064 $ 10,199 $ 23,982
========= ========= =========
Three Months Ended
Loan settlements Sept. 30, 2002 June 30, 2002 March 31, 2002
--------- --------- ---------
Business-to-business $ 39,044 $ 64,143 $ 26,703
Business-to-consumer N/A N/A N/A
Loan center N/A N/A N/A
--------- --------- ---------
Total loan settlements $ 39,044 $ 64,143 $ 26,703
========= ========= =========
FiNet.com, Inc. and Subsidiaries
Consolidated Statements of Operations - Unaudited
(Amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 30 June 30 Sept. 30 Sept. 30
2002 2002 2001 2002 2001
------- ------- ------- ------- -------
Revenues $ 1,779 $ 3,001 $ 1,760 $ 6,043 $ 6,213
Cost of revenues 1,980 1,961 1,141 5,201 4,063
------- ------- ------- ------- -------
Gross profit (loss) (201) 1,040 619 842 2,150
Operating expenses:
General and
administrative 2,197 1,695 1,575 5,404 6,251
Marketing and
advertising 31 38 63 88 290
Depreciation and
amortization 220 264 1,179 764 2,177
Special charges 49 -- -- 49 301
Other 63 47 -- 157 --
------- ------- ------- ------- -------
Total expenses 2,560 2,044 2,817 6,462 9,019
------- ------- ------- ------- -------
Loss from operations (2,761) (1,004) (2,198) (5,620) (6,869)
Other income and
expense:
Other interest income 7 21 20 38 48
------- ------- ------- ------- -------
Loss before equity
in losses of
equity-method
investee (2,754) (983) (2,178) (5,582) (6,821)
Equity in loss
of equity-method
investee (1,120) (499) -- (2,223) --
Income (loss)
from derivative
instruments (65) (20) 1 (54) (13)
------- ------- ------- ------- -------
Loss before
income taxes (3,939) (1,502) (2,177) (7,859) (6,834)
Income tax
expense (benefit) 13 (5) 2 14 35
------- ------- ------- ------- -------
Loss before
cumulative effect
of change in
accounting
principle (3,952) (1,497) (2,179) (7,873) (6,869)
Cumulative effect
of change in
accounting principle -- -- -- -- (93)
------- ------- ------- ------- -------
Net loss (3,952) (1,497) (2,179) (7,873) (6,962)
In-substance
preferred
dividend (42) (162) -- (204) --
Preferred dividend (19) (10) -- (29) --
------- ------- ------- ------- -------
Net loss available
to common
shareholders $(4,013) $(1,669) $(2,179) $(8,106) $(6,962)
======= ======= ======= ======= =======
Basic and diluted
net loss per
common share
before effect of
change in
accounting
principle (0.42) (0.18) (0.23) (0.85) (0.72)
Cumulative effect of
change in
accounting
principle -- -- -- -- (0.01)
Basic and diluted
net loss per
common share $ (0.42) $ (0.18) $ (0.23) $ (0.85) $ (0.73)
======= ======= ======= ======= =======
Weighted average
common shares
used in computing
basic and diluted
net loss per
common share 9,570 9,527 9,509 9,544 9,503
======= ======= ======= ======= =======
FiNet.com, Inc. and Subsidiaries
Consolidated Balance Sheets
(Amounts in thousands, except per share data)
Sept. 30 Dec. 31
2002 2001
--------- ---------
Assets (Unaudited)
Cash and cash equivalents $ 956 $ 1,640
Restricted cash 1,367 2,159
Accounts and notes receivable, net 216 136
Mortgages held for sale, net 8,064 8,365
Fixed assets, net 784 1,422
Investment in equity-method investee -- 2,223
Derivative instruments in
connection with equity-method investee -- 123
Other assets 608 1,187
--------- ---------
Total assets $ 11,995 $ 17,255
========= =========
Liabilities and Stockholders' Equity
Liabilities:
Warehouse and other lines of credit $ 8,352 $ 8,292
Accounts and notes payable 685 231
Accrued expenses and other liabilities 5,326 4,953
--------- ---------
Total liabilities 14,363 13,476
Stockholders' equity:
Preferred stock, par value $0.01 per share
Authorized shares - 100
Issued and outstanding convertible
shares as of September 30, 2002
and December 31, 2001 - 43 and 0
shares, respectively -- --
Common stock, par value $0.01 per share
Authorized shares - 49,900
Issued and outstanding shares as
of September 30, 2002 and December 31,
2001 - 9,609 and 9,523 shares,
respectively 1,029 1,029
Additional paid-in capital 111,884 109,925
Accumulated deficit (115,281) (107,175)
--------- ---------
Total stockholders' equity (2,368) 3,779
--------- ---------
Total liabilities and
stockholders' equity $ 11,995 $ 17,255
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