Property ManagementHomestore Announces First Quarter Results
Homestore (NASDAQ:HOMS - News) reported its financial results for the
quarter ended March 31, 2002 with first quarter revenue of $74.1 million, up 16 percent
from revenue of $63.8 million for the first quarter of 2001. The loss
from continuing operations was $(35.7) million, or $(0.30) per share
compared to a loss of $(99.8) million, or $(1.05) per share for the
first quarter 2001. The net loss for the quarter was $(34.8) million, or
$(0.29) per share compared to a loss of $(99.8) million, or $(1.05) per
share for the first quarter 2001.
The results for the current quarter reflect the classification of the
company"s ConsumerInfo division as discontinued operations. There was no
effect on the first quarter of 2001 since this division was not acquired
until the third quarter of 2001. The ConsumerInfo division was sold for
$130 million in cash on April 2, 2002. The gain on the sale of
approximately $10 million will be reflected in the company"s second
quarter results.
Included in Homestore"s results for the quarter were certain
non-recurring income and expenses. The company recorded other income for
the quarter of approximately $10.8 million from the Real Estate
Technology Trust, which provides technology services and products to
Cendant"s real estate franchisees. This non-recurring income arose from
the restructuring of certain commercial agreements with the Real Estate
Technology Trust. This was offset by the loss on the sale of marketable
securities and other assets of $(4.1 million) also included in other
income. The company also recorded one-time restructuring charges of $1.8
million in the first quarter primarily related to employee termination
benefits, facility closure charges and contract cancellation fees.
At March 31, 2002, Homestore had cash and cash equivalents available to
fund operations of $34.2 million, in addition to restricted cash of
approximately $90.3 million. As of April 2, 2002, after taking into
account the proceeds from the ConsumerInfo sale, Homestore had cash and
cash equivalents of approximately $91 million and approximately $158
million in restricted cash.
"The first quarter was challenging for Homestore as management resources
were diverted by the internal inquiry into our past accounting practices
and our thorough review of our business units. Thanks to the dedicated
effort of our employees, we have made progress in these first 120 days
in realigning our resources and focusing on our customers and core
products and services," said Mike Long, Homestore"s Chief Executive
Officer. "We began our second quarter as a more streamlined entity that
is keenly focused on the success of our customers."
"While the results of the quarter partially reflect our restructuring
efforts, they also include both non-recurring and one-time items," said
Lew Belote, Homestore"s Chief Financial Officer. "Consequently, these
reported results are not necessarily indicative of current or future
trends, so we are not yet in a position to give forward guidance to the
financial community."