The Company's net loss for the period was $1.0 million, or $0.05 per basic and diluted share, compared with a net loss of $0.2 million or $0.01 per basic and diluted share in the year ago period. On a pro forma basis, second quarter net income per diluted share was $0.01 versus net income of $0.07 per diluted share for the same period a year ago.
Pat Lashinsky, President and CEO of ZipRealty, commented, "We were pleased to post solid results for the quarter in the current challenging residential real estate environment. We credit our value proposition and ability to execute, particularly during a period of investment in national expansion. To that point, hiring the right team in the right markets is our top priority. In addition, we are working to ensure that our agents and customers have the best tools available during the decision making process. To date, those features continue to drive record traffic and activity to our site, and combined with new market investments this year, we are confident that ZipRealty is uniquely positioned to continue to gain market share in a challenging market and to better drive value when the market turns. With that goal, I am pleased to announce that we will be entering the New York market by the end of the year. Our initial expansion into the Long Island and Westchester County markets will be the tenth and eleventh new markets during 2007 and approaches the high end of our stated goal of opening ten to twelve new markets this year."
ZipRealty announced the following operating metrics for the second quarter of 2007:
- At June 30, 2007, there were 2,070 ZipAgents employed, up from 1,669 at the end of the second quarter of 2006.
- The total value of real estate transactions closed increased to approximately $1.41 billion in the second quarter of 2007 versus $1.26 billion for the same period in 2006.
-- The total number of transactions closed increased approximately 12.3% to 3,988 from 3,552 during the same prior year period.
-- Average net revenue per transaction increased approximately 3.7% to $7,649 from $7,375 in the second quarter of 2006.
Balance Sheet & Liquidity
As of June 30, 2007, the Company had approximately $86.7 million of cash, cash equivalents and short-term investments, with no long-term debt.
Use of Non-GAAP Financial Measures
To supplement its financial statements presented in accordance with 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 is the primary basis 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.
2007 is expected to be a year of significant investment, as the Company plans to expand into ten to twelve new markets. Based on this plan and management's current outlook, the Company reiterates the following guidance from May 2007:
-- Revenues are expected to range from $105 to $110 million.
-- Average agent productivity is expected to approximate 0.6 to 0.7 closed transactions per agent per month, with average net revenue per transaction of approximately $6,500 to $7,000.
-- Agent count at the end of the year is expected to be between 2,200 and 2,400 agents.
-- The Company expects to report a full year GAAP net loss of between $10 and $13 million, or $0.45 to $0.60 per basic and diluted share, based on 23 million shares outstanding. The range of the pro forma loss is expected to be between $6 and $9 million, or $0.25 to $0.40 per basic and diluted share.
Conference Call Details
A conference call to discuss second quarter results and the Company's outlook for 2007 will be webcast live on Tuesday, August 7, 2007 at 5:00 pm. Eastern Time on the investor relations section of ZipRealty's website. Listeners may also access the call by dialing 800-817-2743. A replay of the conference call will be available through August 14, 2007 by dialing 888-203-1112, password 8879004.
About ZipRealty, Inc.
ZipRealty (ZipRealty.com) is a full-service residential real estate brokerage firm. The Company uses the Internet, proprietary technology and efficient business processes to provide home buyers and sellers with high-quality service and value. Founded in 1999, the Company operates in 28 major markets in 17 states and the District of Columbia. The Company's client-centric business strategy utilizes a sophisticated web site, which enables homebuyers and sellers to access comprehensive local Multiple Listing Services home listings data and other relevant information. The Company also utilizes a proprietary business management technology platform, which reduces costs and allows the Company to pass on significant financial savings to consumers. This Internet-enabled, technology-driven, employee-based model provides the Company with a distinct competitive advantage, allowing ZipRealty to consistently deliver outstanding service to clients.
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the federal securities laws, including, without limitation, statements regarding the residential real estate market conditions for the remainder of 2007, the advantages of the Company's platform in creating a unified infrastructure, culture and focus on customer service, growth of the Company's brand, the Company's future financial performance, and statements under "Financial Guidance" concerning expected investment and plans to open new markets, revenues, agent productivity, average net revenue per transaction, agent headcount, net loss and loss per share and shares outstanding for the year ending December 31, 2007. The 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 a continuing decline in the residential real estate market, including a decline in the number and/or sales prices of homes, 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, 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, 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 mortgage and insurance, internet content, privacy and other matters as well as rules of real estate industry organizations, competition, seasonality, geographic concentration, use by Internet service providers and personal computer users of more restrictive email filters, and other risk factors set forth in the Company's filings with the SEC, including but not limited to its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2007. 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.