Real estate information and technology company HouseValues today reported net income of $1.77 million for the first quarter, down 65.5 percent from $2.93 million in first-quarter 2005.

The company had revenue of $26.9 million for the first quarter, a 53 percent increase from first-quarter 2005. Earnings per diluted share were 6 cents, including a 3 cent charge related to stock compensation, compared with 11 cents per diluted share in first-quarter 2005.

Adjusted earnings before interest, taxes, depreciation and amortization, also known as EBITDA, dropped from $4.99 million in first-quarter 2005 to $4.29 million in first-quarter 2006.

“The company’s real estate lead-generation business grew modestly in the first quarter compared to the fourth quarter of 2005 even amidst the refocusing of sales resources to drive deeper penetration into markets that received less attention last year. HouseValues’ revenue growth of more than 80 percent in 2005 was not distributed in proportion to overall consumer demand. As such, the company sees a significant opportunity to grow revenue in under-penetrated markets, which include many of the nation’s largest metropolitan areas,” the company reported.

Revenue for the year is expected to range between $105 million to $115 million for the year, and adjusted EBITDA is expected to range between $18 million to $20 million. Net income, meanwhile, is expected to be between 24 cents and 30 cents per diluted share for the year.

Revenue from TheLoanPage, a HouseValues site, “was significantly higher than in the fourth quarter of 2005, reflecting the first full quarter of results since its acquisition,” according to the earnings announcement.

The company also had success in generating organic mortgage leads from existing real estate traffic late in the quarter, according to the announcement. “This new capability is expected to further increase the quality and quantity of leads provided to its mortgage customers.”

HomePages, a HouseValues site that features property listings and community information integrated with interactive mapping tools, “made a significant contribution to revenue growth in its first full quarter of operations. Over 10 percent of HouseValues’ real estate customers have purchased advertising subscriptions on HomePages,” according to the earnings announcement.

The company also reported a strong demand for its HouseValues.com and JustListed.com services, which generated “a record number of home buyer and seller inquiries being delivered to its network of real estate agent customers.”

For the second quarter of 2006, revenue is expected to be slightly lower than in the first quarter of 2006, due to a realignment of the company’s sales force to drive higher margin sales.

A replay of the earnings announcement is available at the company’s Investor Relations page at the http://www.housevaluesinc.com site. An audio replay of the call is available to investors beginning at 8 p.m. Eastern Time on Tuesday, May 9, through 11:59 p.m. Eastern Time on Wednesday, May 10. To listen to the audio replay, dial (719) 457-0820 and enter passcode 9659646.

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