More cost-cutting at HouseValues Inc. helped the provider of online tools for real estate professionals and real estate search sites for consumers trim first quarter losses to $1.2 million, company officials said Tuesday.
That’s an improvement from the fourth quarter, when HouseValues posted a $9.8 million net loss, including $9.3 million in charges related to the reduced carrying value of goodwill and long-lived assets after the company exited the mortgage lead-generation business last year.
In a regulatory filing, HouseValues said first quarter revenue declined 8 percent from the previous quarter, to $11.2 million. Losses before interest, taxes, depreciation and amortization (EBITDA) were $100,000, compared to an $800,000 fourth quarter EBITDA gain.
First quarter cost-cutting measures included a 23 percent reduction in the company’s workforce to 173 employees. Those reductions followed on the heels of 100 layoffs in late 2007 and the closure of the company’s Yakima, Wash. sales and service center.
HouseValues executives said they expect the remainder of 2008 to be challenging, but that the company’s $63 million cash position will help the company emerge from the downturn poised for growth.
“While many real estate markets are in turmoil today, consumers will continue to buy and sell homes, they are increasingly going online to do so and the majority will continue to seek the expertise of real estate professionals,” Chief Executive Officer Ian Morris told investors in a conference call. “By supporting our customers and enhancing our offerings as we ride out the cycle, we are positioning HouseValues for long-term leadership in a category still ripe with opportunity.”
HouseValues, which also provides media buying services to real estate professionals, generates leads through consumer Webs sites including JustListed.com, HouseValues.com, and HomePages.com.
Morris said that salesperson productivity was at a two-year high during the quarter, and customer retention at an 18 month-high. The company enjoyed a 92.5 percent monthly customer retention rate during the first quarter, with 9,500 clients generating an average of $370 in revenue each, he said.
Last year, HouseValues bought Realty Generator LLC, a lead generation and lead management system for real estate brokerage companies. In January, the company made a $2.75 million investment in real estate social networking site ActiveRain.
This year HouseValues has used its surplus to repurchase and retire 397,175 shares at an average cost of $2.51, and the company is authorized to repurchase as many as 1.4 million additional shares.
In an interview with Inman News, Morris called the acquisition of Realty Generator "very exiting," because the company had created powerful customer relationship management (CRM) tools for brokers that weren’t being actively marketed. HouseValues will not only step up marketing efforts to brokers, but plans to incorporate some of Realty Generator’s CRM features into HouseValue’s MarketLeader solution for real estate agents in the second half of this year, Morris said
"They do a really nice job of providing the brokers and agents with software to manage their Web sites, get consumers to sign up for listings notifications and updates, and making agents aware of how serious they (potential clients) are, and who’s in their virtual store, so to speak," Morris said. "You might have someone that was on the Web site two years ago suddenly come back, and it will tap the agent" and tell them what homes they are looking at.
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