Business Services Industry
ImproveNet Inc. Reports First Quarter 2000 Results; 66 Percent Increase over Fourth Quarter 1999 Revenues, Positive Gross Margins Announced in First Quarter as Public Company
Business Wire, May 2, 2000
Business Editors
REDWOOD CITY, Calif.--(BUSINESS WIRE)--May 2, 2000--ImproveNet
Inc. (Nasdaq:IMPV), a leading online destination for home improvement
services and information, today reported financial results for the
first quarter ended March 31, 2000, its initial reporting period as a
public company.
For the first quarter 2000, revenues were $1,292,000, up $512,000,
or 66 percent, compared to the fourth quarter 1999 and up $1,013,000,
or 363 percent, compared to the first quarter 1999. Service revenues
were $782,000, up $362,000, or 86 percent, compared to the fourth
quarter 1999 and up $626,000, or 401 percent, compared to the first
quarter 1999. Branding revenues were $510,000, up $150,000, or 42
percent, compared to the fourth quarter 1999 and up $387,000, or 315
percent, compared to the first quarter 1999. Pro forma gross revenues
(before deduction for funding contractual cooperative advertising and
related amortization of warrant-based compensation) were $1,992,000,
compared to $1,190,000 for the fourth quarter 1999 and $279,000 for
the comparable year-ago period.
For the first quarter 2000, gross profit was $238,000 or 18
percent of revenues, compared to a negative gross profit of ($373,000)
or (48 percent) of revenues for the fourth quarter 1999 and a gross
profit of $26,000 or 9 percent of revenues for the first quarter 1999.
Pro forma gross profit (calculated using pro forma gross revenues) was
$938,000 or 47 percent of pro forma gross revenues, compared to
$37,000 or 3 percent of pro forma gross revenues for the fourth
quarter 1999 and $26,000 or 9 percent of pro forma gross revenues for
the first quarter 1999.
For the first quarter 2000, the net loss was $15,366,000, or $1.12
per share, on 13,748,000 basic and diluted pro forma weighted average
shares outstanding, compared to a net loss of $17,356,000, or $1.52
per share, on 11,384,000 basic and diluted pro forma weighted average
shares outstanding for the fourth quarter 1999 and a net loss of
$2,626,000, or $0.57 per share, on 4,625,000 basic and diluted pro
forma weighted average shares outstanding for the same period last
year. Excluding non-cash amortization charges for stock and
warrant-based compensation of approximately $2,800,000 in both the
first quarter 2000 and the fourth quarter 1999 and $466,000 in the
first quarter 1999, net loss for the first quarter 2000 was
$12,566,000, or $0.91 per share, compared to $14,556,000, or $1.28 per
share, for the fourth quarter 1999 and $2,160,000, or $0.47 per share,
for the first quarter 1999.
The number of basic and diluted pro forma weighted average shares
outstanding was impacted by the issuance, primarily in the second half
of 1999, of convertible preferred stock in private offerings and the
issuance of 2,760,0000 common shares in the initial public offering on
March 15, 2000.
Commenting on the first quarter 2000 results, Ronald B. Cooper,
president and chief executive officer, stated, "We achieved a solid
quarter with strong revenue growth, positive gross margins, and
narrowed operating losses compared to the fourth quarter 1999 - all
ahead of plan. We also made consistent strides in strengthening our
market leadership as the online destination for home improvement
services and information by 1) delivering an unsurpassed home
improvement experience for the homeowner and contractor; and, 2)
leveraging existing and creating new commercial agreements with
leading companies and brands in home improvement products and related
services.
"From an operating standpoint, the number of jobs submitted, jobs
matched and jobs won all showed dramatic increases, reflecting our
increased market presence and ability to deliver a successful home
improvement experience.
1Q00 1Q00
vs. vs.
1Q00 4Q99 1Q99 4Q99 1Q99
Number of Visits 2,841,000 2,143,800 797,900 32.5% 256.1%
Number of Jobs 29,500 19,790 18,690 49.1% 57.8%
No. of Matched Jobs 18,130 9,350 7,010 93.9% 158.6%
Ratio Matched / Jobs 61.5% 47.2% 37.5% 30.3% 64.0%
No. of Jobs Won 1,810 1,160 390 56.0% 364.1%
Ratio Win / Matched 10.0% 12.4% 5.5% (19.4%) 81.8%
"One of the compelling attributes of our business model is that it
generates revenue streams from businesses and consumers all along the
home improvement process, including:
-- Lead and win fees from our network of home improvement
contractors
-- Online advertising and branding revenues from suppliers of
home improvement products and related services"
Business Highlights
ImproveNet's significant accomplishments during the first quarter
2000 include:
-- We activated approximately 31 partnerships featuring "Powered
by ImproveNet" or Find-A-Contractor services on their Web
sites, including agreements with Yahoo!, Cox Interactive,
Popular Mechanics, Today's Homeowner, Dow Jones (wsj.com),
Philips Lighting, Wickes Lumber, HomeServices.com, and
portions of RE/MAX, Prudential and Coldwell Banker. Our
existing shareholder partners - Allstate, Armstrong, Cendant's
Move.com, Dow, DuPont, GE, Masco, Microsoft's HomeAdvisor and
Owens Corning - contributed with increased job flow, better
home improvement content and site-positioning as well as
increased promotion of our services in direct mail, magazine
and TV advertising.
-- We continued the systematic `build-out' of our project support
infrastructure, which currently includes local staffing in 60
of 75 markets that reach more than 90 percent of the
owner-occupied homes in the United States as well as Personal
Project Advisors supporting homeowners and contractors
throughout the U.S.
-- We added significant content and tools to our consumer site,
ImproveNet.com. For example, we launched our new Bathroom and
Roofing Estimators, which along with our Kitchen Estimator
provide local labor and material cost estimating capability
for the three most popular home improvement projects. We also
established content links to Popular Mechanics, Today's
Homeowner and brandwise.com's consumer reports and research.
Finally, we expanded the content and services on
ImproveNetPro.com, our newly launched site for contractors,
architects and designers.
-- We completed the redundancy in hosting our two Web sites,
proactive monitoring of all critical systems on 24/7 schedule
and other initiatives to enhance controls over systems and
quality of service.
-- We completed our IPO on March 15, 2000, with an infusion of
approximately $39 million in net proceeds.
Cooper concluded, "We believe that we can transform the home
improvement industry by using the Internet and personalized service to
deliver an outstanding experience and value to our home owners, our
contractors and to our home improvement partners. We will continue to
execute our business model by investing, in a rational manner, to
consistently deliver a compelling value proposition and to leverage
our partnerships with the home improvement industry's best-known
brands. The first quarter was an important step in realizing our
vision and we are grateful for the broad support we continue to
receive."
About ImproveNet
ImproveNet Inc. (Nasdaq:IMPV) is a leading online destination [pilcrow
(paragraph sign)]
for comprehensive home improvement services and information. Through
its Web sites, homeowner/contractor matching system and targeted
advertising, the company provides a national marketplace for home
improvement products and services. ImproveNet helps homeowners,
service providers (contractors, architects and designers) and
suppliers of home improvement products and services optimize their
results through an efficient, online flow of information and
communications. Its online features are complemented by assistance
from a professional staff of personal project advisors and regional
and area managers who offer support throughout each phase of the home
improvement process. ImproveNet maximizes its service offerings
through partnerships with some of the world's best-known companies,
including shareholders such as Allstate, Armstrong, Cendant, Dow,
DuPont, GE, Masco, Microsoft and Owens Corning. ImproveNet is based in
Redwood City, Calif., and can be reached at ImproveNet.com,
ImproveNetPro.com and 888/544-8963.
Certain statements contained herein, including without
limitations, statements addressing the beliefs, objectives, estimates
or expectations of the Company or future results or events constitute
'forward-looking statements' within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known or unknown risks, including, but not limited
to, general economic and business conditions, matters relating to
multi-year commercial contracts, the Company's dependence on
availability of qualified service providers, the acceptance and use of
the Internet, and conditions in the home improvement industry. There
can be no assurance that the actual future results, performance, or
achievements expressed or implied by such forward-looking statements
will actually occur. Users of forward-looking statements are
encouraged to review the Company's registration statement on Form S-1,
dated March 15, 2000, and other federal securities law filings for a
description of important factors that may affect the Company's
businesses, results of operations and financial condition.
- tables to follow -
-0-
ImproveNet, Inc.
Summary of Operating Results
(Unaudited)
($ in thousands, except per share data)
Three Months
Ended
March 31
---------------------------
2000 1999
----------- -----------
Revenues:
Service revenues $ 782 $ 156
Branding revenues 510 123
----------- -----------
Revenues 1,292 279
Cost of revenues:
Cost of service revenues 1,007 192
Cost of branding revenues 47 61
----------- -----------
Cost of revenues 1,054 253
----------- -----------
Gross Profit 238 26
Operating expenses:
Sales and branding 10,464 1,745
Product development 1,240 146
General and administrative 1,584 297
Stock-based compensation 2,711 466
----------- -----------
Total operating expenses 15,999 2,654
----------- -----------
Loss from
operations (15,761) (2,628)
Interest income
and other 395 2
----------- -----------
Net Loss $ (15,366) $ (2,626)
=========== ===========
Pro forma basic
and diluted net loss
per common share $ (1.12) $ (0.57)
=========== ===========
Pro forma weighted
average number of
common shares
outstanding --
basic and diluted 13,748 4,625
=========== ===========
Pro forma net loss per share has been computed using the "as
converted" method which assumes the conversion of preferred stock
outstanding into common stock from the date of original issuance. The
preferred stock was converted into common stock at the time of the IPO
on March 15, 2000.
Summary of Selected Operations
(Unaudited)
($ in thousands)
Three Months
Ended
March 31
---------------------------
2000 1999
----------- -----------
Total Revenue Data:
Service revenues $ 782 $ 156
Amounts invoiced to
home improvement
suppliers for branding 1,210 123
----------- -----------
1,992 279
Amounts invoiced/accrued
for funding of cooperative
branding (616) -
Amounts amortized for
warrant stock-based comp (84) -
----------- -----------
Total net revenues $ 1,292 $ 279
=========== ===========
Summary Balance Sheet Data
($ in thousands)
March 31, December 31,
2000 1999
Balance Sheet Data: (unaudited) (audited)
Cash and cash
equivalents $ 69,014 $ 45,291
Working capital 65,681 39,891
Total assets 79,173 51,542
Long-term
liabilities 125 116
Stockholders' equity 70,400 43,862
--30--MRO/se*
CONTACT: ImproveNet, Inc.
Richard G. Reece, 650/701-8007
IRImproveNet@improvenet.com
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: BUILDING/CONSTRUCTION COMPUTERS/ELECTRONICS
CONSUMER/HOUSEHOLD INTERNET EARNINGS
COPYRIGHT 2000 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning
- 5 Rules for Immediate Annuities
- Death in the Family: 12 Things to Do Now
- Dumbest Things You Do With Your Money
- 6 Online Networking Mistakes to Avoid
- 401(k) Mistakes to Avoid
- 5 Economic Scenarios to Keep You Up at Night
- The Real ‘Best Places to Retire’
- Best Credit Cards for You
- 12 Tough Questions to Ask Your Parents
- The Real ‘Best Colleges’
- Home Buyer Tax Credit: How to Cash In
- Why You Shouldn't Bash Cash
- 8 Phony 'Bargains' and Better Alternatives
- Danger: 3 Debit Card Scams to Avoid
- 6 Myths About Gas Mileage
- 29 Fees We Hate Most
- Quick and Easy Ways to Boost Returns
- Best Stocks to Buy Now
- Lower Your Taxes: 10 Moves to Make Now
- New Jobs: 8 Lessons from Real-Life Career Switchers
- The New Job Market: Who Wins and Who Loses?
- Health Care Reform's Public Option: Everything You Need to Know
- Volunteer Work When Unemployed: Should You Work for Free?
- Whose Recovery Is This?
- Long-Term-Care Insurance: 4 Biggest Risks to Avoid
Content provided in partnership with
Most Recent Business Articles
- Multiple criteria evaluation and optimization of transportation systems
- Multi-criteria analysis procedure for sustainable mobility evaluation in urban areas
- A two-leveled multi-objective symbiotic evolutionary algorithm for the hub and spoke location problem
- Multi-criteria analysis for evaluating the impacts of intelligent speed adaptation
- The development of Taiwan arterial traffic-adaptive signal control system and its field test: a Taiwan experience
Most Recent Business Publications
Most Popular Business Articles
- 7 tips for effective listening: productive listening does not occur naturally. It requires hard work and practice - Back To Basics - effective listening is a crucial skill for internal auditors
- LIFO vs. FIFO: a return to the basics
- FAS 109: a primer for non-accountants - Financial Accounting Standards Board's "Statement 109: Accounting for Income Taxes"
- Using object-oriented analysis and design over traditional structured analysis and design
- Design a commission plan that drives sales - Sales Commissions
Presented by American Express