Autobytel Inc. Reports Third Quarter 2002 Financial Results
IRVINE, Calif.--Oct. 24, 2002--Autobytel Inc. , a leading Internet automotive marketing services company, today announced third quarter 2002 financial results.Highlights for the quarter:
| -- | Generates $3.1 Million in Cash, Finishes Quarter With $26.5 Million |
| -- | Narrows Pro Forma Net Loss to $200,000 |
| -- | Pro Forma EBITDA At 600,000, or $0.02 Per Share, Fourth Consecutive Positive Quarter |
| -- | Launches Pilot Program With Major OEM, Adds More Than 11,000 Enterprise Dealer Relationships |
| -- | Dealer Sales Closing Rates Up 35% Since Beginning of Year |
"We are pleased to report our first quarter of positive cash flow," said Jeffrey Schwartz, president and CEO of Autobytel. "Generating $3.1 million in the third quarter of 2002 is a milestone achievement in the seven-year history of Autobytel. It's a sure sign that improving operations are resulting in improved financial performance."
Autobytel's cash balance as of Sept. 30, 2002 was $26.5 million. During the third quarter, the company generated $3.1 million in cash.
On a Generally Accepted Accounting Principles (GAAP) basis, revenue for the third quarter ended Sept. 30, 2002, totaled $19.3 million, an increase of 6% compared with revenue of $18.2 million for the quarter ended Sept. 30, 2001. It decreased 7% from $20.8 million reported for the second quarter ended June 30, 2002.
Revenue for the third quarter of 2001 excludes Autoweb results prior to the acquisition on Aug. 14, 2001. Pro forma earnings before interest, taxes, depreciation, amortization and non-recurring charges (pro forma EBITDA) for the third quarter of 2002 were $600,000, or $0.02 per share. This compares with pro forma EBITDA of $(1.9) million, or $(0.07) per share, for the third quarter ended Sept. 30, 2001.
Pro forma EBITDA was $400,000, or $0.01 per share, for the second quarter ended June 30, 2002.
On a GAAP basis, the company reported a net loss for the third quarter ended Sept. 30, 2002 of $2.1 million or $(0.07) per share. This compares with a net loss for the quarter ended Sept. 30, 2001 of $3.2 million or $(0.13) per share, and a net loss for the second quarter ended June 30, 2002 of $600,000 or $(0.02) per share.
Pro forma net loss before a non-recurring charge (pro forma net loss) was $200,000 or $(0.01) per share. The non-recurring charge was $1.9 million for obsolete international software.
"Narrowing our net loss to $200,000 puts us on track for breakeven in the fourth quarter," said Schwartz.
Highlights for the Third Quarter
Revenues: Autobytel reported third quarter revenues of $19.3 million, of which $14 million was related to Program Fees, $2.3 million was related to Enterprise Sales, $2 million was related to Advertising, and $1 million was related to Other Products and Services.
Pro Forma Operating Expenses: Total pro forma operating expenses in the third quarter were $18.7 million. Sales and marketing expenses totaled $11.6 million, including customer acquisition costs. Product development and technology costs totaled $4.9 million. General and administrative costs totaled $2.2 million.
Non-recurring Charge: The company took a non-recurring charge of $1.9 million for previously capitalized software that was originally intended to be used for global Web site development.
Unique Visitor Count: Autobytel's four Web site properties, Autobytel.com, Autoweb.com, Carsmart.com and AutoSite.com, received unique average monthly site visitors in excess of 4.1 million in the third quarter of 2002 according to Nielsen Net Ratings. This was a significant increase over the 3.6 million average monthly visitors in the second quarter of 2002 and represented the highest rate of average monthly site visitors.
Purchase Requests: The company delivered approximately 800,000 Purchase Requests during the third quarter of 2002. Revenue per Purchase Request increased sequentially 14%, from $17.92 in the second quarter to $20.38 in the third quarter.
Dealer Count: The company reported approximately 20,600 dealer relationships in the third quarter, 5,600 of which were program dealer relationships. Average monthly dealer fees were approximately $800. The company's remaining 15,000 dealer relationships were accounted for under its enterprise sales category.
In this category, the company reported adding a pilot program with a major OEM during the third quarter of 2002 representing more than 11,000 enterprise dealer relationships. The program is renewable in one-month increments.
Headcount: As of Sept. 30, 2002, the company had 227 employees, essentially the same as in the second quarter of 2002.
Quality Initiatives: Autobytel furthered its commitment to unmatched product quality by launching three new programs during the quarter. The company's proprietary Quality Verification System(SM) is designed to ensure that dealers receive Purchase Requests only from serious car buyers.
The Dealer Management Report program provides dealers with direct customer feedback to help them improve their sales closing ratios. The Dealer Opportunity Report tracks and ranks each dealer relationship to optimize each customer contact made by the company's sales force. As a result of these recent initiatives, dealer closing ratios are already showing a marked improvement.
"With our close rates up 35% since the beginning of this year, we have dramatically reduced the average cost for dealers of selling cars with Autobytel, which now stands around $120 per sale. This progress has had a positive impact on every aspect of our business," said Schwartz.
Pro Forma Results
The pro forma operating results for the third quarter of 2002 exclude the following items on the company's Consolidated Statements of Operations:
-- Restructuring and other charges and benefits
-- Depreciation, amortization and stock-based compensation
A reconciliation of GAAP to pro forma is included in the attached Consolidated Statements of Operations.
Business Outlook
The company expects to report revenues of $80 million for the full fiscal year 2002, with pro forma EBITDA of $0.07 per share, and expects to be cash neutral to cash positive for the fourth quarter of 2002.
Conference Call
In conjunction with Autobytel's third quarter 2002 earnings release, there will be a conference call broadcast live over the Internet today, Oct. 24, 2002, at 4:30 p.m. EDT. Links to the webcast conference call follow: http://www.irconnect.com/abtl/pages/conference.mhtml
The webcast will be archived within 24 hours of the end of the call until the next quarter's earnings announcement. To listen to the archived webcast go to: http://www.irconnect.com/abtl/pages/conference.mhtml
About Autobytel
Autobytel, a leading Internet automotive marketing services company, helps retailers sell cars and manufacturers build brands through marketing and CRM (customer relationship management) programs.
Autobytel owns and operates the popular Web sites Autobytel.com, Autoweb.com, Carsmart.com and AutoSite.com, as well as AIC (Automotive Information Center), a leading provider of automotive marketing data and technology. Autobytel generated an estimated four percent of all domestic new vehicle sales -- $17 billion in car sales in 2001 -- for dealers through its services.
Autobytel is the largest syndicated car-buying content network, reaching millions of unique visitors as they are making their vehicle buying decisions. Autobytel content and technology has potential exposure to more than 90 percent of total Web traffic(a).
(a) Jupiter Media Metrix October 2001 Digital Media Audience Report (Autobytel Inc. sites is the unduplicated audience of the Autobytel and Autoweb properties and Carsmart.com. The car-buying and ownership category as defined by Autobytel. Autobytel Inc. provides content to Yahoo! Inc., AOL websites, MSN.com and Lycos.com. The unduplicated audience of these four sites accounts for over 90 percent of total traffic.)
Autobytel Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per-share data)
ASSETS
Sept. 30, Dec. 31,
2002 2001
(unaudited)
Current assets:
Domestic cash and cash equivalents $26,480 $30,006
International cash and cash equivalents - 28,784
Restricted cash 28 3,047
Accounts receivable, net of allowance for
doubtful accounts and customer credits
of $4,253 and $7,109, respectively 7,998 8,519
Prepaid expenses and other current assets 3,086 4,419
Total current assets 37,592 74,775
Property and equipment, net 2,283 2,889
Capitalized software, net 2,467 4,319
Investment in unconsolidated subsidiary 4,684 -
Goodwill, net 8,367 8,644
Other assets 96 154
Total assets $55,489 $90,781
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,651 $9,108
Accrued expenses 4,425 9,005
Deferred revenues 3,807 4,708
Customer deposits 83 92
Other current liabilities 255 300
Total current liabilities 13,221 23,213
Long-term liabilities 319 -
Total liabilities 13,540 23,213
Minority interest - 7,173
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 11,445,187
shares authorized; none outstanding - -
Common stock, $0.001 par value; 200,000,000
shares authorized; 31,191,678 and
30,969,377 shares issued and
outstanding, respectively 31 31
Additional paid-in capital 203,613 203,280
Accumulated other comprehensive loss (41) (2,438)
Accumulated deficit (161,654) (140,478)
Total stockholders' equity 41,949 60,395
Total liabilities and stockholders' equity $55,489 $90,781
Note: Balances as of Sept. 30, 2002, exclude consolidation of
Autobytel.Europe.
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per-share data)
(Unaudited)
Third Quarter Ended Sept. 30, 2002(a)
Pro Forma
GAAP Adjustments Pro Forma(b)
Revenues:
Program fees $14,022 $- $14,022
Enterprise sales 2,253 - 2,253
Advertising 2,025 - 2,025
Other products and services 981 - 981
Total revenues 19,281 - 19,281
Operating expenses:
Sales and marketing 11,628 (35) (c) 11,593
Product and technology
development 5,733 (793) (c) 4,940
General and administrative 2,206 (41) (c) 2,165
Domestic restructuring and
other charges 1,858 (1,858) (d) -
Total operating
expenses 21,425 (2,727) 18,698
Loss from operations (2,144)
Pro forma EBITDA (b) 2,727 583
Interest income, net 96 - 96
Foreign currency exchange
gain (loss) 10 - 10
Equity loss in unconsolidated
subsidiaries (64) - (64)
Income (loss) before
minority interest
and income taxes (2,102) 2,727 625
Minority interest - - -
Income (loss) before income
taxes (2,102) 2,727 625
Provision for income taxes - - -
Depreciation, amortization
and stock compensation
expense 869 (c) 869
Pro forma net loss before
non-recurring charges $1,858 $(244)
Net loss $(2,102)
Loss from operations/Pro forma
EBITDA per share:
Basic $(0.07) $0.02
Net loss/Pro forma net loss
before non-recurring
charges per share:
Basic $(0.07) $(0.01)
Shares used in computing
income (loss) per share:
Basic 31,170,164 31,170,164
Third Quarter Ended Sept. 30, 2001(a)
Pro Forma
GAAP Adjustments Pro Forma(b)
Revenues:
Program fees $13,162 $- $13,162
Enterprise sales 1,843 - 1,843
Advertising 1,313 - 1,313
Other products and services 1,864 - 1,864
Total revenues 18,182 - 18,182
Operating expenses:
Sales and marketing 11,968 (40) (c) 11,928
Product and technology
development 5,567 (622) (c) 4,945
General and administrative 3,345 (124) (c) 3,221
Domestic restructuring and
other charges 1,254 (1,254) (e) -
Total operating
expenses 22,134 (2,040) 20,094
Loss from operations (3,952)
Pro forma EBITDA (b) 2,040 (1,912)
Interest income, net 717 - 717
Foreign currency exchange
gain (loss) (33) - (33)
Equity loss in
unconsolidated subsidiaries - - -
Income (loss) before
minority interest
and income taxes (3,268) 2,040 (1,228)
Minority interest 31 - 31
Income (loss) before income
taxes (3,237) 2,040 (1,197)
Provision for income taxes 1 - 1
Depreciation, amortization
and stock compensation
expense 786 (c) 786
Pro forma net loss before
non-recurring charges $1,254 $(1,984)
Net loss $(3,238)
Loss from operations/Pro
forma EBITDA per share:
Basic $(0.15) $(0.07)
Net loss/Pro forma net loss
before non-recurring
charges per share:
Basic $(0.13) $(0.08)
Shares used in computing
income (loss) per share:
Basic 25,795,700 25,795,700
Notes:
(a) Results include Autoweb from the date of acquisition on Aug. 14,
2001.
(b) The Pro Forma Consolidated Statements of Operations are not
presentations in accordance with GAAP (Generally Accepted
Accounting Principles) as they exclude the effects of notes (c)
through (e).
(c) Adjustments for depreciation and amortization expense of $869 in
the third quarter of 2002 and depreciation, amortization and stock
compensation expense of $786 in the third quarter of 2001. No
stock compensation expense was incurred in the third quarter of
2002.
(d) Adjustment for the write-off of previously capitalized software
related to the development of global baseline technology.
(e) Adjustment for restructuring charges related to the integration of
Autoweb into Autobytel as a result of the acquisition of Autoweb
on Aug. 14, 2001.
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per-share data)
(Unaudited)
Nine Months Ended Sept. 30, 2002(a)
Pro Forma
GAAP Adjustments Pro Forma(b)
Revenues:
Program fees $44,875 $- $44,875
Enterprise sales 6,980 - 6,980
Advertising 5,421 - 5,421
Other products and services 3,569 - 3,569
Total revenues 60,845 - 60,845
Operating expenses:
Sales and marketing 37,124 (103) (c) 37,021
Product and technology
development 17,209 (2,496) (c) 14,713
General and administrative 7,667 (140) (c) 7,527
Goodwill impairment - - -
Autobytel.Europe
restructuring, impairment
and other international
charges 15,015 (15,015) (e) -
Domestic restructuring and
other charges 1,800 (1,800) (g) -
Total operating
expenses 78,815 (19,554) 59,261
Loss from operations (17,970)
Pro forma EBITDA (b) 19,554 1,584
Loss on sale of investment
in Autobytel.Europe (4,168) 4,168 (i) -
Interest income, net 600 - 600
Foreign currency exchange
gain (loss) (2) - (2)
Equity loss in
unconsolidated subsidiaries (496) - (496)
Income (loss) before
minority interest
and income taxes (22,036) 23,722 1,686
Minority interest 866 - 866
Income (loss) before income
taxes (21,170) 23,722 2,552
Provision for income taxes 6 - 6
Depreciation, amortization
and stock compensation
expense 2,739 (c) 2,739
Pro forma net loss before
non-recurring charges $20,983 $(193)
Net loss $(21,176)
Loss from operations/Pro
forma EBITDA per share:
Basic $(0.58) $0.05
Net loss/Pro forma net loss
before non-recurring
charges per share:
Basic $(0.68) $(0.01)
Shares used in computing
income (loss) per share:
Basic 31,125,944 31,125,944
Nine Months Ended Sept. 30, 2001(a)
Pro Forma
GAAP Adjustments Pro Forma(b)
Revenues:
Program fees $37,537 $- $37,537
Enterprise sales 4,843 - 4,843
Advertising 2,031 - 2,031
Other products and services 6,152 - 6,152
Total revenues 50,563 - 50,563
Operating expenses:
Sales and marketing 38,147 (158) (c) 37,989
Product and technology
development 14,169 (1,083) (c) 13,086
General and administrative 10,965 (1,172) (c) 9,793
Goodwill impairment 21,614 (21,614) (d) -
Autobytel.Europe
restructuring, impairment
and other international
charges 11,202 (11,202) (f) -
Domestic restructuring and
other charges 3,115 (3,115) (h) -
Total operating
expenses 99,212 (38,344) 60,868
Loss from operations (48,649)
Pro forma EBITDA (b) 38,344 (10,305)
Loss on sale of investment
in Autobytel.Europe - - -
Interest income, net 2,790 - 2,790
Foreign currency exchange
gain (loss) 425 - 425
Equity loss in
unconsolidated subsidiaries (500) - (500)
Income (loss) before
minority interest
and income taxes (45,934) 38,344 (7,590)
Minority interest 2,008 - 2,008
Income (loss) before income
taxes (43,926) 38,344 (5,582)
Provision for income taxes 29 - 29
Depreciation, amortization
and stock compensation
expense 2,413 (c) 2,413
Pro forma net loss before
non-recurring charges $35,931 $(8,024)
Net loss $(43,955)
Loss from operations/Pro
forma EBITDA per share:
Basic $(2.19) $(0.46)
Net loss/Pro forma net loss
before non-recurring
charges per share:
Basic $(1.98) $(0.36)
Shares used in computing
income (loss) per share:
Basic 22,191,514 22,191,514
Notes:
(a) Results include Autoweb from the date of acquisition on Aug. 14,
2001.
(b) The Pro forma Consolidated Statements of Operations are not
presentations in accordance with GAAP (Generally Accepted
Accounting Principles) as they exclude the effects of notes (c)
through (i).
(c) Adjustments for depreciation, amortization and stock compensation
expenses of $2,739 and $2,413 in the nine months ended 2002 and
2001, respectively.
(d) Adjustment for impairment of goodwill related to our acquisition
of A.I.N. Corp.
(e) Adjustment for the change in Autobytel.Europe's capital structure
and impairment of our investment in Autobytel.Europe.
(f) Adjustment for the restructuring of Autobytel.Europe, the
write-off of obsolete international software and the write-off of
investments in European joint ventures.
(g) Adjustment for the write-off of previously capitalized software
related to the development of global baseline technology, charges
related to our reduction in work force, excess facilities and
costs related to an abandoned transaction net of benefits related
to arbitration recovery and the reduction of legal fees and
negotiated settlements.
(h) Adjustment for the restructuring of our automotive operations
group, contract termination costs related to online advertising
and our aftermarket program, as well as the write-off of
previously capitalized software related to our aftermarket program
and restructuring charges related to the integration of Autoweb
into Autobytel as a result of the acquisition of Autoweb on Aug.
14, 2001.
(i) Adjustment for loss recognized on reduction of ownership in
Autobytel.Europe from 76.5% to 49%.
Autobytel Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share and per-share data)
(Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30,
2002 2001 2002 2001
Cash flows from operating
activities:
Net loss $(2,102)$(3,238)$(21,176)$(43,955)
Adjustments to reconcile net
loss to net cash provided by
(used in) operating activities:
Non-cash charges:
Depreciation and amortization 870 725 2,719 2,228
Provision for bad debt and customer
credits 2,249 2,067 6,610 5,992
Loss on disposal of property and
equipment 61 19 50 290
Compensation expense recorded for
fair market value of stock
options in excess of
exercise price - 61 20 185
Autobytel.Europe restructuring and
impairment - - 15,015 -
Loss on recapitalization of
Autobytel.Europe - - 4,168 -
Equity losses in unconsolidated
subsidiaries 63 - 495 500
Minority interest - (31) (866) (2,008)
Impairment of goodwill - - - 21,614
Write-down of capitalized software
costs 1,858 - 1,858 3,455
Write-off of investments in foreign
entities - - - 2,142
Write-down of property and equipment - - - 242
Contract termination costs - (697) - -
Changes in assets and liabilities:
Accounts receivable 9 (308) (5,861) (4,135)
Prepaid expenses and other current
assets 949 2,570 1,317 3,082
Other assets - - 58 2
Accounts payable (22) 110 (4,419) 880
Accrued expenses 189 (1,907) (3,576) (3,664)
Restructuring liabilities (47) (2,147) (228) 2,723
Deferred revenues (604) 279 (901) (678)
Customer deposits (3) (51) (9) (49)
Other current liabilities (83) 53 12 (138)
Long-term restructuring and other
liabilities (47) (435) 319 (482)
Net cash provided by (used in)
operating activities 3,340 (2,930) (4,395) (11,774)
Cash flows from investing
activities:
Deconsolidation of Autobytel.Europe - - (28,163) -
Acquisition of business, net of cash
acquired - 5,697 - 5,697
Investment in foreign entities - - - (413)
Investment in unconsolidated
subsidiary - - (400) -
Notes receivable from foreign entity - - - (88)
Repayment of notes receivable from
foreign entity - - - 292
Purchases of property and equipment (192) (1,616) (915) (1,985)
Proceeds from sale of property and
equipment 3 - 156 -
Capitalized software costs (83) (728) (1,412) (4,493)
Net cash provided by (used in)
investing activities (272) 3,353 (30,734) (990)
Cash flows from financing
activities:
Net proceeds from sale of common
stock 95 66 313 123
Net proceeds from sale of subsidiary
company stock - - - 2,000
Net cash provided by financing
activities 95 66 313 2,123
Effect of exchange rates on cash (25) 1,743 (513) (1,721)
Net increase (decrease) in cash and
cash equivalents 3,138 2,232 (35,329) (12,362)
Cash and cash equivalents, beginning
of period 23,370 67,351 61,837 81,945
Cash and cash equivalents, end of
period $26,508 $69,583 $26,508 $69,583
Supplemental disclosure of cash flow
information:
Cash paid (refunded) during the
period for income taxes $- $(25) $6 $1
Cash paid during the period for
interest $1 $2 $1 $4