Tree.com Provides Updated Q1 2009 Financial Outlook
CHARLOTTE, N.C., March 9, 2009 - Tree.com, Inc. (NASDAQ: TREE) today provides an update to its Q1 2009 financial outlook.
Chief Financial Officer Matt Packey states, "After seeing January's trends, we had initially expected Q1 to weaken from December's record volume levels. However, falling interest rates in February and ongoing governmental stimulus efforts have triggered another spike in refinance mortgage volume. Although lenders on our exchange continue to curb marketing spend with us, and transaction values in our real estate business remain weak, we are offsetting these trends with solid performance at LendingTree Loans, and continued cuts in our own advertising spending. Therefore, we currently expect Q1 EBITDA and net income (loss) to be roughly in-line with or slightly better than Q4-08 EBITDA and net income (loss). Clearly we continue to be at the mercy of the broader mortgage market, which remains highly volatile, so we are not optimistic that these positive market trends will continue beyond Q1 resulting in lower company performance in Q2 through Q4."
Source: Freddie Mac: Primary Mortgage Market Survey
Freddie Mac's Primary Mortgage Market Survey consists of the average of 125 lenders rates who contributed rates to Freddie Mac. The rates are based on a 30-year fixed rate mortgage with 20% down and 80% financed over the life of the loan.
Commenting on the full-year 2009 outlook Mr. Packey continued, "We assume in our outlook that we will have to increase marketing again in Q2 and beyond, which will substantially increase our costs and reduce our EBITDA and net income (loss). Offsetting this somewhat is a compensation restructuring program discussed in our last earnings call that will save the company $4 million in 2009, our initiatives to improve lender sales, and our ongoing focus on expenses generally."
About Tree.com, Inc.
Tree.com, Inc. (NASDAQ: TREE) is the parent of several brands and businesses in the financial services and real estate industries including LendingTree®, LendingTree Loans sm, GetSmart®, Home Loan Center, RealEstate.com, iNest®, and RealEstate.com, REALTORS®. Together, they serve as an ally for consumers who are looking to comparison shop loans, real estate and other financial products from multiple businesses and professionals who compete for their business.
Tree.com, Inc. is headquartered in Charlotte, N.C. and maintains operations solely in the United States. For more information, please visit www.tree.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
The matters contained in the discussion above may be considered to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of the Company and members of our management team. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: our ability to operate effectively as a separate public entity following our spin-off from IAC in August 2008; additional costs associated with operating as an independent company; volatility in our stock price and trading volume; our ability to obtain financing on acceptable terms; limitations on our ability to enter into transactions due to spin-related restrictions; adverse conditions in the primary and secondary mortgage markets and in the economy; adverse conditions in our industries; adverse conditions in the credit markets; seasonality in our businesses; potential liabilities to secondary market purchasers; changes in our relationships with network lenders, real estate professionals, credit providers and secondary market purchasers; breaches of our network security or the misappropriation or misuse of personal consumer information; our failure to provide competitive service; our failure to maintain brand recognition; our ability to attract and retain customers in a cost-effective manner; our ability to develop new products and services and enhance existing ones; competition from our network lenders and affiliated real estate professionals; our failure to comply with existing or changing laws, rules or regulations, or to obtain and maintain required licenses; failure of our network lenders or other affiliated parties to comply with regulatory requirements; failure to maintain the integrity of our systems and infrastructure; liabilities as a result of privacy regulations; failure to adequately protect our intellectual property rights or allegations of infringement of intellectual property rights; changes in our management; and deficiencies in our disclosure controls and procedures and internal control over financial reporting. These and additional factors to be considered are set forth under "Risk Factors" in our Annual Report on Form 10-K for the period ended December 31, 2008, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.
Contacts:
Jason Schugel (Investors)
877-640-4856
tree.com-investor.relations@tree.com
Allison Vail (Media)
704-943-8339
allison.vail@tree.com