W) QUOT not your average two dollar stock.
Rated a WATCH
Reason for DD
Has four quarters of 20% rev growth
Business
Quotesmith.com Inc. is an Internet-based insurance service provider. The Quotesmith.com service enables consumers and business owners to obtain instant quotes from over 300 insurance companies, and the Company guarantees the accuracy of every quote. Combining the reach and efficiency of the Internet with its proprietary database and industry expertise developed over the past 16 years, the Company provides a complete "quote to policy delivery" insurance solution without the involvement of any commissioned salespeople.
Our first complete year of focusing on our Internet-based insurance service was 1997. We incurred operating losses of approximately $636,000 in 1997, $198,000 in 1998, $15 million for the year ended December 31, 1999 and $13.9 million for the six months ended June 30, 2000. Because we plan to continue to incur high levels marketing expenses in an attempt to increase our consumer base, we will need to generate significantly higher revenues to achieve profitability.
For the six month period ended June 30, 2000, approximately 90% of our revenue was derived from consumers purchasing life insurance through us. In addition, in recent years, term life insurance premiums have been declining. This decline has caused our average commission per equivalent face amount of a policy to decrease and has contributed to our operating losses since 1997. If term life insurance premiums continue to decline, it may become more difficult for us to become profitable.
While we obtain the information contained in our database directly from over 300 insurance companies being quoted and listed at our Web site, we currently hold agency contracts with 173 of these insurance companies. We typically seek formal agency appointment from an insurance company after we receive a purchase request for that insurance company's product from a consumer. In the past a number of insurance companies quoted on our Web site have refused to appoint us as an agent or refused to permit us to publish their quotes for various reasons, including: - - we do not meet with our customers on a face-to-face basis; - - some insurance companies may have exclusive relationships with other agents; - - we publicly market our service on a price-oriented basis which is not compatible with the insurance company's branding efforts; and - - a formal business relationship with us might be perceived negatively by the insurance company's existing distribution channels.
Competitors
Quicken InsureMarket, InsWeb Corporation and SelectQuote. Some of our competitors have relationships with major electronic commerce companies, including Quicken InsureMarket, which has a relationship with America Online, and InsWeb, which has relationships with Yahoo!, Snap and Infoseek.
News
Aug 9, 00 Quotesmith.com Named Best of Web for Term Life Insurance by FinanCenter.com
08/03 15:00 Quotesmith.com Chosen as One of 100 Best Web Sites for Small Business By Entrepreneur Magazine
Quotesmith.com Reports Second Quarter Financial Results
PR Newswire - July 19, 2000 15:51
Online Insurance Broker Posts Narrowed Net Loss, Highest Ever Revenues And Policy Sales
-- Revenues increased 27% over Q1 2000 to a record $4.9 million
-- Net loss narrowed to $3.6 million from Q1 2000 net loss of $9.1
million
-- Policies sold increased 29% over Q1 2000 to a record 12,148
-- Completed quotes totaled 977,000, a 28% decrease from Q1 2000
-- Marketing costs decreased 42% from Q1 2000 to $5.9 million
DARIEN, Ill., July 18 /PRNewswire/ -- Quotesmith.com, Inc., (Nasdaq: QUOT), the buyer-driven insurance exchange which provides instant quotes from more than 300 leading insurance companies, today announced financial results for the second quarter ended June 30, 2000.
Financial Results
Revenues for the second quarter ended June 30, 2000 were a record $4.9 million, a 27% increase over revenues of $3.9 million reported for the first quarter of 2000 and a 210% increase over revenues of $1.6 million reported for the same period last year. Net loss for the second quarter decreased to $3.6 million, or $0.19 per share, compared with a net loss $9.1 million, or $0.47 per share reported for the first quarter of 2000 and a loss of $1.7 million, or $0.12 per share, in the second quarter of 1999. On a year-to-date basis, the Company achieved record revenues of $8.8 million for the first six months of 2000, up 188% as compared to $3.1 million for the same period in 1999. Net loss for the first six months of 2000 totaled $12.7 million, or $.66 per share, vs. $3.1 million, or $.23 per share, for the first six months of 1999.
Quotesmith.com ended the quarter with $35.8 million, or $1.86 per share, in cash and short-term investments.
Robust New Customer Growth
For the second quarter, Quotesmith.com reported a record 12,148 policies sold, representing a sequential quarterly increase of 29% from the 9,388 policies sold in the first quarter of 2000 and an increase of 284% from the 3,165 policies sold in the second quarter of 1999. Paid policies for the first six months of 2000 amounted to a record 21,536, up 259% from the 6,000 paid policies reported in the like period of 1999.
Quotesmith.com chairman and CEO, Robert Bland, commented, "We had a solid quarter in all of our key areas. These financial results demonstrate that our unique propositions - get instant quotes from 300 insurance companies, view the lowest premiums, buy from the company of your choice - are resonating with insurance shoppers in a very positive way. Our plan is to continue to maintain a heads-down focus on delivering a faster, easier way to buy insurance for our customers by continuing to give them access to the widest and most informative market overview available from any single source. We believe that insurance, more than any other industry, is ideally suited for Internet distribution. We intend to continue to gun for growth, profitability, technical superiority, scalability and efficiency with every resource we've got."
Progress with Operating Cost Leverage
Operating costs per paid policy declined 37% to $151 in the second quarter vs. $241 in the first quarter of 2000. On a year-to-date basis, operational cost per paid policy plunged 47% to $190 for the first six months of 2000 as compared to $357 for the first six months of 1999. Declining operating costs per paid policy are due to several factors including the measurement of related expenses against a rising policy count, the shifting of specified customer service functions to certain insurance companies and increased automation.
Health Insurance Policy Sales Momentum
Sales of health insurance in the second quarter, including dental and Medicare supplement policies, surged 42% on a sequential quarterly basis to 1,119 policies vs. 786 for the first quarter of 2000. For the six months ended June 30, 2000, health insurance policy sales reached 1,905, up 1,844% from 98 reported in the like six- month period of last year. Commenting on the rapid rise of health insurance policy sales, Bland added, "We are very excited to see that health insurance sales have become our fastest-growing business. Our unique ability to provide instant quotes for 89 individual and family health insurers, 11 short term medical insurers, 39 dental insurers, 30 small group health insurers and 70 Medicare supplement insurers represents a significant core strength and competitive advantage because this information simply isn't available from any other single source. Going forward, we intend to aggressively expand our health insurance product line."
Commissions and fees derived from the sale of individual term life policies comprised 92% of total revenue during the second quarter of 2000, which is higher than recent quarters due to an influx of paid term life business resulting from the implementation of Regulation XXX earlier in the year. Commissions and fees from auto and health insurance accounted for the balance of the non-term life revenue.
Second Half Outlook
Quotesmith.com intends to further reduce marketing expenditures until its planned expansion into auto and certain additional lines of the insurance business are fully implemented. This planned reduction in marketing expenses will slow the short-term revenue growth rate and should reduce the amount of capital drain as compared to previously projected amounts. Quotesmith.com believes that it will achieve revenues of approximately $17 million in 2000 vs. $8.4 million for 1999. Quotesmith.com projects a net loss in 2000 of approximately $23 million.
Analysts and Other
31-May-00 11:00 -- 12:00 ET
Quotesmith.com (QUOT) 2 15/16 +5/16: Advest Inc initiates coverage with a STRONG BUY rating.
20-Apr-00 11:00 -- 12:00 ET
Quotesmith.com (QUOT) 4 1/16 -1/4: -- Update -- Stephens Inc downgrades to NEUTRAL from MKT OUTPERFORM rating with a price target of $5; believes QUOT will trade sideways for foreseeable future due to revenue estimates coming down and announcement of new auto program.
20-Apr-00 09:30 -- 10:00 ET
Quotesmith.com (QUOT) 4 3/8 +1/16: ABN AMRO downgrades to BUY from TOP PICK rating and price target of $21 as company beat Q1 EPS expectations but term life quote volumes were below projections; remains encouraged by QUOT's long-term prospects.
Numbers
Rev 1.5M to 2.4M to 3.0M to 3.9M to 4.9M Jun00
EPS (0.13) to (0.23) to (0.35) to (0.48) to (0.19) Jun00
52-Week Low on 16-Aug-2000 $1.625
Recent Price $2.25
52-Week High on 13-Sep-1999 $12.625
Market Capitalization $43.3M
Shares Outstanding 19.2M
Float 8.30M
Daily Volume (3-month avg) 143.3K
Daily Volume (10-day avg) 91.0K
Price/Book (mrq) 1.18
Price/Earnings N/A
Price/Sales (ttm) 2.97
Debt/Equity (mrq) 0.00
Total Cash (mrq) $35.8M
Cash per 10Q - $ 4,093,654
Fixed maturity investments - available for sale at fair value $31,670,525
Short Interest As of 8-Aug-2000 Shares Short 102.0K
Percent of Float 1.2%
Shares Short (Prior Month) 199.0K
INSW Number for comparision
Price/Book (mrq) 1.02
Price/Earnings N/A
Price/Sales (ttm) 2.87
Insiders
Institutions hold 17% down from 21% in prior quarter
More buys at high prices than sell in 2000, but BLAND, ROBERT & MAUREEN JT are selling 175,000 shares - $0.40 - - 8/28/00
Internet Posts of Note
Apparently the customers like the experience at QUOT enough to by their insurance at QUOT on the Internet in substantial numbers. 11,500 bought in 2nd quarter of 2000. 18,000 liked the experience in 1999 and the company appears on track to more than double that number in 2000. Apparently the customers are voting for QUOT with their pocketbooks, so I would presume that the experience is good. It's hard to argue with success. 8/31/00 on yahoo
QUOT appears to have a good shot at emerging as the dominent seller of insurance on the Internet, exactly at the time QUOT's competitors are exiting the business altogether, laying off employees or shifting business models. QUOT's mgt. team and technical superiority seem well positioned. 8/25/00 on yahoo
State Farm non-renewing participation agreement. INSW will get killed tomorrow. 30% of revenue just disappeared. 4/18/00 on the RB INSW board
Chart
Ugly 200/50/10 chart. Seems to be building a base around $2.
Links
Summary
Intuit concentrating on mortgages and very little in QUOT area. Was a BUY until I saw the PR filing to unload two days worth of volume. I hear their ad all the time. Made 10A% last year. Very cheap, but will probably go lower. I was betting the rise in INSW would move QUOT. Won’t get delisted to cash on hand. I see a buyout coming maybe like SDLI. Their president filed to sell before buyout announced. Hmmmm. Got to sleep on it.
Jack |
