Real estate media and technology supplier Homestore, Inc. has announced preliminary financial results for the quarter ended September 30, 2002.

Homestore expects third quarter revenue of approximately $64 million, down 3 percent, or $2 million, from the second quarter of 2002. The expected decline in revenue from the second quarter is a result of certain non-recurring revenue items in the previous quarter. Gross profit margin is expected to show improvement over the 68 percent the company reported in the second quarter 2002.

The net loss for the quarter is expected to be approximately $(40) million, compared to a net loss of $(52.3) million in the second quarter of 2002. The expected net loss in the third quarter will include a non-recurring restructuring charge of approximately $11 million, relating to the Company's continued cost reduction measures, and non-cash charges of approximately $28 million, consisting of depreciation, amortization and stock-based charges.

Total operating expenses in the third quarter, including cost of revenue, sales and marketing, product development and general and administrative expenses, are expected to decline by approximately $10 million, or 11 percent, from the second quarter. This represents the company's third consecutive quarter of substantial reductions in operating costs. Unrestricted cash and cash equivalents available to fund operations are $87.8 million at September 30, 2002.

"Our preliminary results indicate our continued progress in reducing our expense structure while stabilizing our revenues," said Mike Long, Homestore's Chief Executive Officer. "We believe these results confirm our commitment to serve real estate professionals and our ability to make strategic investments in products and services our customers need to be successful."

Homestore intends to release its third quarter results and will host a conference call and audio Webcast on Wednesday, November 13, 2002 at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). In order to participate in the call, investors may log on to http://homestore.com/investorrelations, click on "Conference Call," and then "Webcast." RealPlayer software is required and is obtainable at no cost. Please connect to the above site 10 minutes prior to the call to load any necessary audio software. A replay of the call will also be available in the same section of the company's Web site. A telephone replay will be available from 7:30 p.m. Eastern Time on November 13, 2002 until 12:00 a.m. Eastern Time November 20, 2002 at 706/645-9291, conference code 6305473.

Published: November 7, 2002

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