Loan origination system provider Ellie Mae reported net income of $1 million for the third quarter of 2011, down from a $1.7 million profit in 3Q10, but better than its losses of $40,000 in 2Q11 and
Third-quarter revenue of $14.7 million was up 23% from 3Q10's $11.9 million and income was impacted by $400,000 in one-time expenses associated with the Pleasanton, Calif.-based company's
According to financial statements Ellie Mae filed with the Securities and Exchange Commission on Oct. 28, DMD had total assets of $6.1 million and posted a net loss of $479,000 off revenue of $4.6 million in the first half of 2011. DMD posted an annual net loss of $342,000 in 2010.
DMD's customer list was valued at $1.2 million as of June 30. The lease on DMD's San Diego office space was extended in May, with average monthly payments of $25,000. DMD spent $2 million on research and development in the first half of 2011.
Ellie Mae reaffirmed its 2011 revenue outlook in the range of $51 to $53 million, which had previously been increased from initial estimates of $50 million to $52 million. Revenue for the first nine months of 2011 was $36.7 million, meaning the company would need to generate $14.3 million to $16.3 million in 4Q11 revenue to reach that target.
Ellie Mae reduced its net income projection to $100,000 to $1 million, or $0.01 to $0.05 per share, down from $2.1 million to $3.1 million in both the first and second quarters. The reduced income is a result of the increased amortization from the DataTrac acquisition.
On Oct. 28, analysts from Morgan Keegan adjusted their estimates of Ellie Mae's fiscal year 2011 annual revenue to $50.1 million to $51 million and adjusted earnings per share to $0.10, down from $0.23.
“We view this transaction as a solid deal that consolidates the market and positions Ellie Mae for accelerating growth in 2012,” lead analyst Jonathan Ruykhaver wrote. “With this acquisition, Ellie Mae will originate approximately 30% of all residential mortgages, versus around 20% today.”
There were 43,183 lender mortgage professionals who used Ellie Mae's Encompass loan origination system at least once during the quarter, up 10% from 3Q10 and
“Our bundled software and services offering is effectively addressing mortgage originators' heightened concerns about loan quality, regulatory compliance and operating efficiency with an attractive valuation proposition,” Ellie Mae President and CEO Sig Anderman said on a conference call with investors Wednesday.
The company's stock lock-up period recently expired, allowing the investors who held the Ellie Mae's stock before its initial public offering to begin selling their shares. Before the IPO, many employees held stock in the company and Ellie Mae reported five investors with 5% or more of the company's outstanding shares, including CoreLogic, which remains one of Ellie Mae's largest shareholders.
Trading volume of Ellie Mae stock totaled nearly 925,000 shares on Oct. 12, the day after the lock-up period expired. It was the highest volume of activity since 3.36 million shares were traded when the company went public on April 15. According to its most recent disclosure to the SEC, there are about 20.69 outstanding shares of common stock, giving Ellie Mae a market capitalization of approximately $109 million at Wednesday's closing price.
Looking to the future, Anderman applauded the
“We share the belief that this move, while not a cure-all sort of bullet, will help the economy in general and the housing industry in particular,” Anderman said. “We believe this should mean additional business for our customers and for us—although the levels of that new business, which should start appearing in Q1 of next year, is hard to predict.”
