Online real estate marketing and lead-generation company HouseValues Inc. (NASDAQ: SOLD) this week announced a $900,000 net loss for the third quarter ended Sept. 30, compared with a $500,000 net loss for the same quarter last year.
The Kirkland, Wash.-based company reported Monday that its total expenses and the net loss for the quarter include a $1.2 million charge related to the closure of a satellite sales and service center in Yakima, Wash.
The company closed that facility and laid off 100 workers, or about 30 percent of its workforce, in an effort to reduce operating expenses, according to documents filed with the U.S. Securities and Exchange Commission. The company expects to sublease the Yakima building.
HouseValues’ total expenses in the third quarter account for $400,000 in severance payments for the former employees and $100,000 to reimburse a government grant.
Earlier this year the company announced that it was discontinuing its mortgage lead-generation business to focus on its core services for real estate agents and brokerages.
HouseValues’ stock has been suffering, and closed at an all-time low of $3.61 per share on Oct. 22.
Also this week, HouseValues announced that it has acquired Realty Generator LLC, a technology company that offers lead-generation services to real estate brokerage companies, and a related company, Blackwater Realty LLC, on Nov. 1.
Under that agreement, HouseValues paid $10 million in cash and assumed liabilities, and is also required to pay Realty Generator based on the future performance of the acquired business through June 30, 2009, according to an SEC filing.
“Realty Generator provides a comprehensive management tool to real estate brokers, similar to HouseValues’ system currently provided to real estate agents. Realty Generator’s proprietary, Web-based lead-generation and cultivation platform allows brokers to purchase leads, manage the distribution of those leads to their agent teams, and monitor agent follow-through,” according to a description in the SEC document.
Realty Generator principals Thomas Ray and Justin Tracy will join the HouseValues team, according to the acquisition announcement, and will oversee the operation of that business
HouseValues reported revenue of $13.8 million in the third quarter, compared with $21.1 million in third-quarter 2006. Total expenses fell to $16.4 million for the quarter, compared with $22 million for the same quarter last year.
The company’s earnings before interest, taxes, depreciation and amortization, or EBITDA — which is a measure of revenue minus expenses that excludes certain other business costs — was $500,000 in the third quarter, compared with $1.6 million in third-quarter 2006.
“Revenue declined due to fewer customers and lower average revenue per customer. The company believes that agents reduced their investments in marketing as transaction volumes continued to slow in many major markets,” according to the earnings announcement.
“Customers with two or more years of tenure on the HouseValues system once again increased in the third quarter.”
The company acquired 250,000 shares of its common stock during the third quarter, and may acquire up to 1.75 million more shares under the company’s current share purchase program.
HouseValues ended the third quarter with $74 million in cash, cash equivalents and short-term investments.
An audio replay of the third-quarter earnings conference call is available to investors by calling (719) 457-0820 and entering 9408093#.
