HomeSeekers.com Reports Sequential Quarterly Revenue Growth of 59%, Record Gross Profits and Website Traffic

Business Wire, May 15, 2000

Business Editors/Hi-Tech Writers

RENO, Nev.--(BUSINESS WIRE)--May 15, 2000

HomeSeekers.com, Incorporated (NASDAQ: HMSK) today announced record financial results for the quarter ended March 31, 2000.

The company reported revenue for its second fiscal quarter of $4.3 million, an increase of 59% compared to revenue of $2.7 million for the immediately preceding quarter and an increase of 145% compared to the quarter ended March 31, 1999. The gross margin percentage increased to 72% for the March 2000 quarter, up from 65% for the quarter ended December 31, 1999. The increasing gross margin contributed to a sequential increase in gross profits of $1.3 million, or 77%, to $3.1 million for the March 2000 quarter, up from $1.8 million for the quarter ended December 31, 1999. Net cash loss for the March 2000 quarter was $3.1 million, or $.17 per share, compared to net cash loss for the immediately preceding quarter of $3.5 million, or $.21 per share.

Stated HomeSeekers.com Chairman and CEO, Greg Costley, "We are very pleased with the strong results for this quarter. While continuing our rapid growth, we were able to improve financial performance by increasing our gross profit margin and reducing our net cash loss. This combination of growth in both revenue and gross profit margin are key factors in our plan to be cash flow positive by December 2000. We had cash and cash equivalents of $6.3 million as of March 31, 2000 compared to $5.1 million of cash and cash equivalents as of December 31 ,1999. We were also able to reduce our cash used in operating activities from an average of $1.2 million per month for the quarter ended December 31, 1999 to an average of $1 million per month for the quarter ended March 31, 2000. This continues to be a key area of focus for us. We enhanced our cash position in fiscal 1999 by $15.8 million from proceeds of common stock, options and warrants. Our goal is to exceed that amount in the current fiscal year. To date, we have received proceeds of $7.6 million."

The record results in both revenue and gross profits occurred as the company reached historical highs in sales of its website solutions, targeted to real estate professionals. Over 25,000 professionals are now using HomeSeekers.com's website/webpage solutions. Further increases in revenues came from strategic relationships, such as the company's agreement with Countrywide Home Loans, which was announced in January.

Continued Costley, "We are very pleased by the momentum we have achieved in our XMLSweb(R) product sales. HomeSeekers.com's proprietary XMLSweb(R) technology replaces the MLS boards' existing and more expensive legacy systems with an Internet-based browser system. XMLSweb(R) uses the latest in XML and ASP technology, which allows for faster data retrieval and information management. This enables real estate professionals to access the full power of their MLS system from their office computer, their personal computer or their client's computer. We anticipate increased sales of our powerful MLS-related technology in the United States and internationally. Our agreement with the prestigious ORPI of France, announced in February 2000, is further evidence of the strength of this technology."

Traffic at the HomeSeekers.com site reached record levels in this quarter. For the first time in history, the number of user sessions exceeded 1.5 million in the month of March. Commenting on this increase in traffic, HomeSeekers.com President John Giaimo said, "we feel that this momentum will increase as we continue to offer consumers and professionals the information they need in a format they can use to improve the efficiency of the home seeking process."

Conference Call

Due to schedule conflicts, HomeSeekers.com Senior Management will host its conference call on Thursday, May 18, 2000 at 2:30 p.m., Eastern Time. Interested investors may participate in the call by dialing 1-800-263-9155 approximately 10 minutes before the call is scheduled to begin. Please use the following password 15250973. International participants may dial in on 1-212-676-5372. A replay will be available one hour after the completion of the conference call for 24 hours by dialing 1- 800-633-8284 for domestic calls and 1-858-812-6440 for international calls. The reservation number is 15250973. This conference call replay may also be viewed through Vcall on the internet at www.vcall.com.

Second Quarter Highlights

Current Status

HomeSeekers.com suite of technology solutions serves a network of approximately 130,000 agents through its XMLSweb multi-listing service product, and roughly 20,000 agents through its real estate industry publications. HomeSeekers.com has also created and is hosting websites/webpages for over 25,000 agents, and provides e-mail service to nearly 30,000 agents. With the recently announced acquisition of ISG/Formulator, HomeSeekers.com will add a significant time saving feature to its suite of products and services for real estate industry professionals. The company plans to cross-sell its other technologies into Formulator's existing customer base of over 40,000 agents.