Investor Presentation. June 2011

Transcription

1 Investor Presentation June

2 Safe Harbor This presentation contains forward-looking statements reflecting management's current forecast of certain aspects of InsWeb's future. It is based on current information, which we have assessed, but which h by its nature is dynamic and subject to rapid and even abrupt changes. Forward-looking statements can be identified by words such as believes, expects, projects and similar expressions, or by reference to a result or event for a future period regarding: projected future revenues, revenue growth, expenses, profitability and financial position; marketing and consumer acquisition; strategic initiatives aimed at accelerating growth and profitability, including strategic acquisitions; increased or decreased participation by insurance companies, agents and other purchasers of consumer leads; and product and technological implementations. InsWeb's actual results might differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with InsWeb's business, which include, but are not limited to: variations in consumer usage of the internet to shop for and purchase insurance; the willingness and capability of insurance companies or other insurance entities to offer their products or instant quotes on InsWeb's website or through InsWeb's licensed subsidiaries; changes in InsWeb's relationships with existing insurance companies or other customers, including, changes due to consolidation within the insurance industry; the effects of competition on InsWeb's consumer acquisition strategies; InsWeb's ability to attract and integrate new insurance providers and strategic partners; implementation and consumer acceptance of new product or service offerings; the outcome of litigation in which h InsWeb is a party; insurance and financial i services industry regulation; fluctuations in operating results; or other unforeseen factors. The forwardlooking statements should be considered in the context of these and other risk factors disclosed in the InsWeb's filings with the Securities and Exchange Commission. 2

3 What We Do A comparison shopping engine for insurance Consumers Research and find insurance providers online Insurance Providers Online channel to acquire customers 69% Auto * 17% Health * 6% Property * 6% Life * 1% Other * Network reaching critical mass 9 of 10 largest Auto carriers 6 of 10 largest Health insurers 14,000 out of 125,000 agents * Based on Q revenues 3

4 Company Overview Founded in 1995 Leading player in online lead generation for insurance 2010 Revenue of $42m; 6-year revenue CAGR of 19% Recent acquisition iti of Potrero Media augments revenue; broadens verticals, marketing channels Adjusted EBITDA and Net Income profitable; focus on cash generation 2010 Adjusted EBITDA of $3.4m; Free Cash Flow of $4.4m Strong, cash-rich, debt-free balance sheet Headquarters: Sacramento, CA with 74 employees 4

5 Investment Highlights Market Current $5b TAM - online insurance lead gen market Auto and Property - $4.5b Life and Health - $500m (Internal estimates) Position 2 nd largest online insurance distribution network (3 players control 90% of the market) Distributed 8m leads in 2010 Business Model Predictable and improving gross margins drive operating leverage Multiple high-quality traffic sources Barriers to Entry Critical mass of participating carriers and agents Proprietary, scalable technology infrastructure 5 patents; ~1,500 web domains Management Established management team; over 30% ownership 5

6 Insurance Advertising Spending Online US Online Advertising Spending by Financial Services and Insurance Companies, ($ in billions and % of total) Financial Services Insurance Insurance % of Financial Services 2006 $2.54 $ % 2007 $3.26 $ % 2008 $4.32 $ % 2009 $5.10 $ % 2010 $5.85 $ % 2011 $6.60 $ % Source: emarketer, July

7 Potrero Media Acquired in Q Specialize in Search Marketing Focus on the Health Insurance Vertical Complementary Talent Top Web Properties 7

8 How We Acquire Consumers Q % of Transaction Revenue by Consumer Source Margins managed through real-time bidding approach based on query of providers immediately available to purchase a lead 24% 45% 31% Direct to Consumers Form Hosting From Competitors Direct to Consumers: Consumers who started a shopping session on a website of InsWeb or its subsidiaries. Includes Marketing, Display Advertising, and Search Advertising From Competitors: Consumers who were acquired by InsWeb from its competitors Bankrate (NetQuote, Insureme, and Trouve) and ITSOL (Insuranceleads.com and AllWebLeads) - in the form of qualified leads. Form Hosting: Consumers who InsWeb acquired directly from non-competitor 3rd parties in the form of qualified leads. 8

9 Who Buys Our Leads Q % of Transaction Revenue by Lead Type 40% 13% 7% 40% 12k+ local agencies and agents Direct to Carriers Agent Insider / Broker CPC Advertising Aggregator Partners 9

10 Our Assets Robust distribution Strong Carrier Relationships Diverse and growing Agent Network of over 14,000 agents Sophisticated, proprietary technology platform 5 patents Real-time bidding for leads Revenue-maximizing algorithm for displaying advertisers Own approximately 1,500 domains MedHealthInsurance.com InsuranceRates.com com and others yet to be developed Significant NOLs $190m in Federal NOLs; $75m in State NOLs 10

11 Strong Carrier Partnerships Select Clients Auto Select Clients - Health Direct Relationships with 9 of the Top 10 Auto Insurance Carriers Direct Relationships with 6 of the Top 10 Health Insurance Carriers 11

12 AgentInsider Platform Launched Sept 2005 Top-ranked Insurance lead provider * Ranked #1 in Qualification Rates ** Ranked #1 in Volume Growth ** Ranked #2 in Conversion Rates ** Allows local agents to directly connect with InsWeb s consumers More than 7.5m auto, home and life leads sold to date * Leads360 Insurance Lead Provider Awards Ranked 34 National Insurance Lead Providers ** Qualification Rate: Percentage of leads were contactable and interested in the product or service the lead buyer was offering ** Volume Growth: Which lead providers increased the volume of leads they sold to the same client set between 2009 and 2010 ** Conversion Rate: Percentage of leads that generated revenue for Leads360 customers 12

13 AgentInsider Lead Volumes Over 7.5M leads sold since inception 700, , , , , , ,000 0 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q Q1 Q2 Q3 Q4 Q1

14 9 Active Reps Q111 AgentInsider Revenue (in Millions) Exceeded $4M for first time in Q Revenue growth of 12% per quarter since inception $4.5 $4.0 $3.5 $3.0 5 $2.5 5 $2.0 $ $ $0.5 $ Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410

15 Financial Overview Revenue 6 year CAGR of 19% Increased drivers through acquisition of Potrero Media Leverage in the model Steady OPEX and predictable gross margins, combined with scalable distribution network, provides strong operating leverage Focus on cash generation EBIT comprised largely of free cash flow Low capital requirements Virtually no inventory; DSO s Significant ifi NOL s Strong balance sheet Cash and short-term investments of $9.2m (as of 3/31/11) No debt 15

16 Annual Revenues (in Millions) $50 $40 $30 $25.0 $28.5 $33.2 $37.5 $35.1 $42.4 $20 $14.7 $10 $

17 Quarterly Revenues (in Millions) $15 $13.2 $13.9 $10 $9.5 $9.5 $8.9 $8.7 $8.0 $9.2 $10.5 $5 $0 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 Revenue 4 Qtr Moving Avg 17

18 Adj EBITDA & Cash Flow (in Millions) $2.5 $2.0 $1.5 $1.0 $0.5 $- $(0.5) $(1.0) $(1.5) $(2.0) Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q111 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% $(2.5) Adjusted EBITDA Cash Flow from Operations (Adjusted) EBITDA Margin -25% We define Adjusted EBITDA as net income (loss) excluding interest, taxes, depreciation, amortization, sharebased compensation, and other non-recurring gains and losses that are not related to the Company s continuing operations. 18

19 Leverage and Scalability of the Model Non-marketing OPEX relatively fixed Operating Expenses reduced in Q211 yields increased operating margins New lease effective 5/1/11 - savings of approximately $700,000 annually Reduced headcount (13%) effective 5/31/11 - savings of approximately $1,400,000 annually Sophisticated technology manages to minimum overall gross margin of 30% Growing distribution network of carriers and agents increases gross margins ($ and %) as leads are distributed more times Incremental gross margins drop directly to bottom-line 19

20 Growth Strategy Increasing Monetization Continued ability to control gross margins; incremental margin drops to the bottom-line Expanding Network Increasing the number of times a lead is distributed Acquisitions Seek out additional targets that complement the business and are expected to be quickly accretive 20

21 Investor Relations Contact Jennifer Jarman The Blueshirt Group, for InsWeb

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