Tree.com 2Q Profits from Discontinued Operations

Tree.com reported a GAAP net profit of $7.1 million for 2Q13, down from $25.8 million for the same period in 2012. However, if only the company’s continuing operations were accounted for, it would have posted a 2Q13 net loss of $2 million, worse than the $273,000 loss in 1Q13 but better than the $2.9 million loss in 2Q12. The GAAP loss in 1Q12 was $2.7 million.

Discontinued operations include the former Home Loan Center Inc. business sold to Discover in June 2012. The HLC sale was the driver of the 2Q12 profits.

During 2Q13, Tree.com received the final $10 million payment on the sale, which brought the company’s working capital to nearly $73 million as of June 30.

Revenue in its mortgage leads business was up 31% over the first quarter to $33.5 million. In 2Q12, there was $11.4 million of mortgage leads revenue.

"In an environment where the broader market for refinancing is decreasing and purchase application volume remains relatively flat, we achieved significant increases in lead flow across both products.

“Additionally, demand for our leads continues to grow, which we see as a sign that our leads have become a more integral part of lenders' marketing mix. We grew our network of lenders by 18% in the quarter and an impressive 31% of our existing lenders increased their spending with us by more than 20%,” said Doug Lebda, chairman and CEO of Tree.com.