ZipRealty, Inc. (Nasdaq: ZIPR) today announced financial results
for its fourth quarter and full-year ended December 31, 2008. For
the fourth quarter, net revenues were $25.1 million, an 18.3%
increase from the $21.2 million reported in the fourth quarter last
year. The Company�s net loss for the period was $2.7 million, or
$0.14 per share, compared to a net loss of $5.9 million, or $0.26
per share, in the year-ago period. The pro forma loss per share,
excluding the effect of stock-based compensation and one-time
items, was $0.18 for the fourth quarter of 2008 versus $0.22 loss
per share for the same period a year ago.
Pat Lashinsky, President and CEO of ZipRealty, commented, �We
were very pleased that, despite historic economic challenges in
2008, ZipRealty marked its tenth consecutive year of revenue
growth. We credit our ongoing investments in technology and people,
which have driven high customer satisfaction levels, market share
gains and agent efficiency.� Lashinsky continued, �In the near
term, we continue to be cautious about the overall residential real
estate market, as various regions of the country are in different
stages of rationalizing price and inventory. However, we remain
excited about our market position and strategic momentum and
believe we have significant opportunity to innovate and grow over
the long term.�
Lashinsky concluded, �Throughout the current downturn, ZipRealty
has maintained a strong liquidity position and an unwavering
commitment to outstanding customer service. We believe that our
focus on the real estate consumer and providing a great customer
experience, supercharged by prudent investments in our technology,
will position ZipRealty to prosper and profit from an eventual
industry recovery.�
In 2008, net revenues increased for the tenth consecutive year
to $107.5 million, a 3.5% increase from the $103.9 million reported
in 2007. The Company�s net loss for the year was $13.3 million, or
$0.64 per share, compared to a net loss of $14.9 million, or $0.66
per share, in the prior year. The pro forma loss per share was
$0.52 for the year versus a $0.34 loss per share last year. The
cash used in operating activities was $11.6 million in 2008
compared to $5.7 million in 2007.
The Company announced the following operating metrics for the
fourth quarter of 2008:
- The total value of real estate
transactions closed increased to approximately $1.07 billion in the
fourth quarter of 2008 versus $921 million in the same period in
2007.
- The total number of transactions
closed was 4,335, compared to 3,035 in the fourth quarter last
year.
- Average net transaction revenue
per close decreased approximately 16.5% to $5,690 from $6,818 in
the fourth quarter of 2007.
- At December 31, 2008, there were
2,816 ZipAgents employed, up from 2,180 agents at the end of the
fourth quarter of 2007.
The following operating metrics pertain to the full-year 2008
results:
- The total value of real estate
transactions closed increased to $4.64 billion from $4.62 billion
in 2007.
- The total number of transactions
closed increased approximately 22.9% to 17,156 from 13,962 in the
prior year.
- Average net transaction revenue
per close for the year was $6,145, compared to $7,241 in 2007.
Balance Sheet & Liquidity
As of December 31, 2008, the Company had approximately $49.4
million of cash, cash equivalents and short-term investments, with
no long-term debt.
Use of Non-GAAP Financial Measures
To supplement its financial statements presented in accordance
with Generally Accepted Accounting Principles (�GAAP�), ZipRealty
uses a non-GAAP measure of net income (loss) it refers to as �pro
forma net income (loss)� that excludes certain items including
stock-based compensation, non-cash income taxes, and certain
one-time items, if any. A reconciliation of this non-GAAP measure
to GAAP is provided in the attached tables. These non-GAAP
adjustments are provided to enhance the user's overall
understanding of ZipRealty�s current financial performance and its
prospects for the future. ZipRealty believes these non-GAAP results
provide useful information to both management and investors by
excluding certain items it believes are not indicative of its core
operating results and thus presents a more meaningful basis for
comparison between periods. Further, this non-GAAP method involves
key information management uses for planning and forecasting its
future operations. The presentation of this additional information
should not be considered in isolation or as a substitute for
results prepared in accordance with GAAP.
Outlook
In 2009, the Company plans to limit expansion to 1 to 2 new
markets, including the previously announced entry into the Portland
market in early 2009, as it focuses resources on optimizing the
return on investment in all of its markets. Based on this plan and
management�s current information, the Company anticipates the
following:
- Revenues for the full-year 2009
are expected to grow in the mid-single to low double digits over
2008 levels.
- The Company expects the 2009
full-year GAAP net loss to be narrower than the 2008 net loss of
$14.7 million excluding legal settlement.
Conference Call Details
A conference call to discuss fourth quarter and year-end
financial results and the Company�s outlook for 2009 will be
webcast live on Thursday, March 12, 2009 at 5:00 p.m. Eastern Time
on the investor relations section of ZipRealty�s website,
www.ziprealty.com. Listeners may also access the call by dialing
888-778-9052. A replay of the conference call will be available
through March 19, 2009 by dialing 888-203-1112, password
4124376.
About ZipRealty, Inc.
ZipRealty is a full-service residential real estate brokerage
firm. The Company utilizes its user-friendly website and employee
real estate agents to provide homebuyers and sellers with
high-quality service and value. ZipRealty's website provides users
with access to comprehensive local Multiple Listing Services home
listings data, as well as other relevant market and neighborhood
information. The Company's proprietary business management system
and technology platform help to reduce costs, allowing the Company
to pass on significant savings to consumers as permitted by law.
Founded in 1999, the company operates in 35 major markets in 21
states and the District of Columbia. For more information on
ZipRealty, visit www.ziprealty.com or call 1-800-CALL-ZIP.
Cautionary Language
This release contains forward-looking statements within the
meaning of the "safe harbor" provisions of the federal securities
laws, including, without limitation, statements that we remain
cautious about the overall residential real estate market and
excited about our market position and strategic momentum, that we
believe we have a significant opportunity to innovate and grow the
business in the future, and that we are confident that maintaining
strong liquidity, an unwavering commitment to customer service, and
prudent investments in our people, technology and brand will
position the company to prosper and profit as the market recovers.
Forward-looking statements also include those appearing under the
heading �Outlook,� including limiting expansion to 1 or 2 new
markets, and certain ranges of revenue and narrowing of GAAP income
(loss). The forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those projected. The risks and uncertainties include but are
not limited to our history of losses and expectation of future
losses, volatility in the real estate market, macroeconomic
challenges, including a loss of consumer confidence and high
unemployment, a continuing decline in the residential real estate
market, including an increase in sales of distressed properties and
a decline in the number and/or sales prices of homes, changes in
interest rates, the ability of home buyers to obtain mortgage
financings on acceptable terms, the impact of tight credit on the
housing market, the impact of federal and/or state efforts designed
to bolster the housing and credit markets, the Company�s ability to
hire, retain and train qualified agents and key personnel, the
Company�s access to MLS listings and leads from third parties that
it does not control, the newness and scalability of the Company�s
business model, legal challenges to the Company�s compensation
plans, including expense policies, under federal and state wage and
hour laws, the Company�s ability to manage growth in terms of
personnel, expansion into new markets, information and control
systems and legal restrictions, the Company�s ability to comply
with often complex federal and state laws and regulations
concerning real estate brokerage, other core services such as
insurance, internet content, privacy and other matters as well as
rules of real estate industry organizations, competition,
management transitions, use by Internet service providers and
personal computer users of more restrictive email filters,
seasonality, geographic concentration, and other risk factors set
forth in the Company's Form 10Q for its recently completed third
quarter ended September 30, 2008. The forward-looking statements
included in this release are made as of today�s date and, except as
otherwise required by law, ZipRealty does not intend to update
these forward-looking statements to reflect events or circumstances
after the date hereof.
ZipRealty, Inc. Consolidated Statements of Operations
(unaudited) (in thousands, except per share amounts and
operating data) �
Three Months Ended �
Twelve Months
Ended December 31, December 31, 2008 �
2007 2008 �
2007 � Net transaction revenues $
24,667 $ 20,694 $ 105,427 $ 101,100 Referral and other revenues �
383 � � 476 � � 2,023 � � 2,762 � Net revenues � 25,050 � � 21,170
� � 107,450 � � 103,862 � � Operating expenses Cost of revenues
15,293 12,589 62,702 58,613 Product development 2,191 1,991 8,678
7,320 Sales and marketing 9,676 9,950 40,571 38,256 General and
administrative 3,045 3,627 12,789 15,409 Litigation (recovery), net
� (1,980 ) � - � � (1,355 ) � 3,550 � Total operating expenses �
28,225 � � 28,157 � � 123,385 � � 123,148 � � Loss from operations
� (3,175 ) � (6,987 ) � (15,935 ) � (19,286 ) � Other income
(expense), net Interest income 457 1,072 2,518 4,401 Other income
(expense), net � - � � (1 ) � 75 � � 1 � Total other income
(expense), net � 457 � � 1,071 � � 2,593 � � 4,402 � � Loss before
income taxes (2,718 ) (5,916 ) (13,342 ) (14,884 ) � Provision for
income taxes � - � � - � � - � � - � � Net loss $ (2,718 ) $ (5,916
) $ (13,342 ) $ (14,884 ) � � Net loss per share: Basic and diluted
$ (0.14 ) $ (0.26 ) $ (0.64 ) $ (0.66 ) � Weighted average common
shares outstanding: Basic and diluted 20,049 23,194 20,917 22,586 �
Supplemental operating data (unaudited) Number of ZipAgents
at beginning of period 2,814 2,263 2,180 1,794 Number of ZipAgents
at end of period 2,816 2,180 2,816 2,180 � Total value of real
estate transactions closed during period (in billions) $ 1.07 $
0.92 $ 4.64 $ 4.62 � Number of transactions closed during period
(1) 4,335 3,035 17,156 13,962 � Average net revenue per transaction
during period (2) $ 5,690 $ 6,818 $ 6,145 $ 7,241 � (1) The term
"transaction" refers to each representation of a buyer or seller in
a real estate purchase or sale. (2) Average net revenue per
transaction equals net transaction revenues divided by number of
transactions with respect to each period. �
Pro forma net income
(loss) and pro forma net income (loss) per share
Pro forma net income (loss) and
pro forma net income (loss) per share have been computed to give
effect to excluding stock-based compensation expense, non-cash
income taxes, and certain one-time items, if any. Management
believes that pro forma net income (loss) for the three and twelve
months ended December 31, 2008 and 2007 provides useful information
to investors because it excludes the impact of items it believes
are not indicative of its core operating results and thus presents
a more consistent basis for comparison between periods.
�
Three Months Ended Twelve Months Ended December
31, December 31, 2008 2007 2008
2007 GAAP net loss as reported $ (2,718 ) $ (5,916 ) $
(13,342 ) $ (14,884 ) Stock-based compensation 1,012 889 3,912
3,751 Non-cash income taxes - - - - One-time item; litigation
(recovery), net � (1,980 ) � - � � (1,355 ) � 3,550 � Pro forma net
loss $ (3,686 ) $ (5,027 ) $ (10,785 ) $ (7,583 ) � Pro forma net
loss per share: Basic and diluted $ (0.18 ) $ (0.22 ) $ (0.52 ) $
(0.34 ) � Pro forma weighted average common shares outstanding:
Basic and diluted 20,049 23,194 20,917 22,586
ZipRealty,
Inc. Consolidated Balance Sheets (unaudited) (in
thousands, except per share amounts) � �
December 31,
December 31, 2008 2007 Assets Current
assets: Cash and cash equivalents $ 18,500 $ 7,818 Short-term
investments 30,889 72,649 Accounts receivable, net of allowance
1,625 1,170 Prepaid expenses and other current assets � 3,442 � �
3,267 � � Total current assets 54,456 84,904 � Restricted cash 130
90 Property and equipment, net 4,516 5,366 Intangible assets, net
89 119 Other assets � 776 � � 340 � � Total assets $ 59,967 � $
90,819 � � �
Liabilities and Stockholders' Equity Current
liabilities: Accounts payable $ 2,169 $ 2,095 Accrued expenses and
other current liabilities � 6,706 � � 10,495 � � Total current
liabilities 8,875 12,590 � Other long-term liabilities � 441 � �
503 � � Total liabilities � 9,316 � � 13,093 � � � Stockholders'
equity:
Common stock: $0.001 par value;
23,709 and 23,651 shares issued and 20,273 and 23,641 shares
outstanding, respectively
24 24 Additional paid-in capital 148,502 144,499 Common stock
warrants 4 209 Deferred stock-based compensation - (3 ) Accumulated
other comprehensive income (loss) (246 ) 188 Accumulated deficit
(80,483 ) (67,141 ) Treasury stock at cost: 3,436 and 10 shares,
respectively � (17,150 ) � (50 ) Total stockholders' equity �
50,651 � � 77,726 � � Total liabilities and stockholders' equity $
59,967 � $ 90,819 �
ZipRealty, Inc. Consolidated
Statements of Cash Flows (unaudited) (in thousands) �
Twelve
Months Ended December 31, 2008 �
2007 �
Cash flows from operating activities Net loss $ (13,342 ) $
(14,884 ) Adjustments to reconcile net loss to net cash used in
operating activities Depreciation and amortization 2,786 2,828
Stock-based compensation expense 3,912 3,751 Provision for doubtful
accounts (3 ) (1 ) Amortization of short-term investment premium
(discount) (266 ) (420 ) Amortization of intangible assets 30 30
Loss on disposal of property and equipment 107 10 Equity in net
loss of non-consolidated companies - 4 Changes in operating assets
and liabilities Accounts receivable (452 ) 612 Prepaid expenses and
other current assets (175 ) (87 ) Other assets (436 ) (122 )
Accounts payable 74 (89 ) Accrued expenses and other current
liabilities (3,789 ) 2,704 Other long-term liabilities � (62 ) �
(10 ) Net cash used in operating activities � (11,616 ) � (5,674 )
�
Cash flows from investing activities Restricted cash (40 )
- Purchases of short-term investments (12,859 ) (48,830 ) Proceeds
from sale and maturity of short-term investments 54,451 57,179
Purchases of property and equipment (1,980 ) (4,048 ) Investment in
non-consolidated companies � - � � 13 � Net cash provided by
investing activities � 39,572 � � 4,314 � �
Cash flows from
financing activities Proceeds from stock option exercises 21
203 Proceeds from common stock warrant exercises - 450 Acquisition
of treasury stock (17,500 ) (50 ) Proceeds from reissue of treasury
stock � 205 � � - � Net cash provided by (used in) financing
activities � (17,274 ) � 603 � Net increase (decrease) in cash and
cash equivalents � 10,682 � � (757 ) � Cash and cash equivalents at
beginning of period �
7,818 � �
8,575 � �
Cash and cash equivalents at end of period $ 18,500 � $ 7,818 �
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