EMERYVILLE, Calif.--(BUSINESS WIRE)--May 7, 2008--ZipRealty, Inc.
(Nasdaq: ZIPR) today announced financial results for its first quarter
ended March 31, 2008. For the quarter, net revenues were $20.6
million, an 11.8% decrease from the $23.4 million reported in the
first quarter of 2007. The Company's net loss for the period was $7.3
million, or $0.31 per share compared with a net loss of $3.1 million
or $0.14 per share in the year ago period. The pro forma loss per
share, excluding the effect of stock-based compensation and certain
one-time items, was $0.24 for the first quarter compared with $0.10
loss per share for the same period a year ago.
Pat Lashinsky, President and CEO of ZipRealty, commented, "During
the first quarter, we experienced better than expected bottom-line
results as we adapted to conditions and executed well despite a
challenging residential real estate environment. Contributing to our
performance was a modest increase in transactions at lower average
prices, due in part to a shift toward less traditional transactions
including foreclosure, bank REO and short sale transactions. Results
for the period were also driven by ongoing expense management which
has carried over from the fourth quarter." Lashinsky continued,
"Importantly, we are on track to achieve our 2008 earnings guidance,
and we believe our focus on execution, which clearly delivered
benefits this quarter, will position us to drive operating leverage
going forward."
ZipRealty announced the following operating metrics for the first
quarter of 2008:
-- At March 31, 2008, there were 2,285 ZipAgents employed, up
from 1,875 agents at the end of the first quarter 2007. On a
sequential quarterly basis, agent count increased by 105 from
December 31, 2007.
-- The total value of real estate transactions closed decreased
to approximately $884 million in the first quarter of 2008
versus $1.044 billion for the same period in 2007.
-- The total number of transactions closed was 3,121, compared to
3,110 in the first quarter last year.
-- Average net revenue per transaction decreased approximately
8.6% to $6,447 from $7,291 in the first quarter of 2007.
Balance Sheet & Liquidity
As of March 31, 2008, the Company had approximately $72.4 million
of cash, cash equivalents and short-term investments, with no
long-term debt. As reported in early April 2008, the Company
repurchased all of the shares of its common stock held by Pyramid
Technology Ventures in a privately negotiated transaction for
approximately $17.4 million, which reduced its cash balance
accordingly.
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.
Financial Guidance
The Company's expectations for the business are consistent with
guidance communicated in early March 2008. However, as a result of the
repurchase of shares from Pyramid Ventures, guidance has been revised
to reflect the impact attributable to the reduction in interest income
that would have been earned on the funds used to repurchase the shares
and per share amounts have been revised to reflect the impact of the
decrease in weighted average shares outstanding for the full year.
In 2008, the Company plans to limit expansion to two to four new
markets, including the Long Island, New York market opened in the
first quarter, as it focuses resources on optimizing the return on
investment in all of its markets. Based on this plan and management's
current outlook, the Company anticipates the following:
-- Revenues for the full year are expected to range from $114.0
to $118.0 million.
-- The Company expects to report a full year GAAP net loss of
between $8.9 and $10.4 million, or $0.42 to $0.50 per basic
and diluted share, based on 20.9 million shares outstanding.
The range of the pro forma net loss is expected to be between
$4.9 and $6.4 million, or $0.23 to $0.30 per basic and diluted
share.
Conference Call Details
A conference call to discuss first quarter results will be webcast
live on Wednesday, May 7, 2008 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 888-254-2798. A replay
of the conference call will be available through May 14, 2008 by
dialing 888-203-1112, password 8426866.
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. Founded in 1999, the company
operates in 34 major markets in 19 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 about the Company
being on track with its 2008 earnings guidance, revised to reflect the
impact due to the repurchase of shares from Pyramid Technologies
Ventures, the Company's focus on execution, its position to drive
operating leverage going forward, plans to limit expansion to two to
four new markets, including the Long Island, New York market opened in
the first quarter, and the Company's anticipated revenues and GAAP and
pro forma net losses for 2008 included under the heading "Financial
Guidance." 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 the Company's limited operating history and limited
profitability, the Company's access to MLS listings and leads from
third parties that it does not control, a continuing decline and
volatility in the residential real estate market, including a decline
in the number and/or sales prices of homes, economic events or trends
in housing prices, interest rates, the newness and scalability of the
Company's business model, the Company's ability to hire, retain and
train qualified agents and key personnel, 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
10-K for fiscal year 2007, and other filings with the SEC including
our quarterly Form 10-Qs and periodic Form 8-Ks. 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
March 31,
-----------------
2008 2007
-------- --------
Net transaction revenues $20,121 $22,675
Referral and other revenues 503 707
-------- --------
Net revenues 20,624 23,382
-------- --------
Operating expenses
Cost of revenues 12,342 13,075
Product development 2,146 1,681
Sales and marketing 10,028 8,847
General and administrative 3,682 3,968
Litigation 625 -
-------- --------
Total operating expenses 28,823 27,571
-------- --------
Loss from operations (8,199) (4,189)
-------- --------
Other income (expense):
Interest income 911 1,088
Other income (expense), net 27 (4)
-------- --------
Total other income (expense), net 938 1,084
-------- --------
Loss before income taxes (7,261) (3,105)
Provision for income taxes - -
-------- --------
Net loss $(7,261) $(3,105)
======== ========
Net loss per share:
Basic $ (0.31) $ (0.14)
Diluted $ (0.31) $ (0.14)
Weighted average common shares outstanding:
Basic 23,450 22,008
Diluted 23,450 22,008
Supplemental operating data (unaudited)
Number of ZipAgents at beginning of period 2,180 1,794
Number of ZipAgents at end of period 2,285 1,875
Total value of real estate transactions closed
during period (in billions) $ 0.88 $ 1.04
Number of transactions closed during period (1) 3,121 3,110
Average net revenue per transaction during period
(2) $ 6,447 $ 7,291
(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 months ended March 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
March 31,
-----------------
2008 2007
-------- --------
GAAP net loss as reported $(7,261) $(3,105)
Stock-based compensation 1,009 823
Non-cash income taxes - -
One-time item; litigation settlement 625 -
-------- --------
Pro forma net loss $(5,627) $(2,282)
======== ========
Pro forma net loss per share:
Basic $ (0.24) $ (0.10)
Diluted $ (0.24) $ (0.10)
Pro forma weighted average common shares
outstanding:
Basic 23,450 22,008
Diluted 23,450 22,008
ZipRealty, Inc.
Consolidated Balance Sheets (unaudited)
(In thousands)
March 31, December 31,
---------- ------------
2008 2007
---------- ------------
Assets
Current assets:
Cash and cash equivalents $ 16,924 $ 7,818
Short-term investments 55,516 72,649
Accounts receivable, net 1,953 1,170
Prepaid expenses and other current assets 2,963 3,267
---------- ------------
Total current assets 77,356 84,904
Restricted cash 90 90
Property and equipment, net 4,920 5,366
Intangible assets, net 111 119
Other assets 360 340
---------- ------------
Total assets $ 82,837 $ 90,819
========== ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,708 $ 2,095
Accrued expenses and other current
liabilities 7,971 10,495
---------- ------------
Total current liabilities 10,679 12,590
Other long-term liabilities 486 503
---------- ------------
Total liabilities 11,165 13,093
---------- ------------
Stockholders' equity:
Common stock: $0.001 par value; 23,660 and
23,651 shares issued and 23,650 and 23,641
shares outstanding at March 31, 2008 and
December 31, 2007, respectively 24 24
Additional paid-in capital 145,452 144,499
Common stock warrants 168 209
Deferred stock-based compensation - (3)
Accumulated other comprehensive income 480 188
Accumulated deficit (74,402) (67,141)
Treasury stock, at cost (50) (50)
---------- ------------
Total stockholders' equity 71,672 77,726
---------- ------------
Total liabilities and stockholders' equity $ 82,837 $ 90,819
========== ============
CONTACT: for ZipRealty, Inc.
Investor Relations:
Tom Ryan/Don Tomoff
866-947-4663
or
Media:
Marcus Gamo/Aimee Grove
415-277-4925
ziprealty@allisonpr.com
SOURCE: ZipRealty, Inc.
