Autobytel Inc. Reports First-ever Profitable Quarter- Net Income $0.5 Million
IRVINE, Calif.--Jan. 30, 2003--Autobytel Inc. , a leading Internet automotive marketing services company, today announced financial results for its fourth quarter and fiscal year ended Dec. 31, 2002.Highlights for the quarter:
| -- | First profitable quarter with net income totaling $0.5 million on a GAAP basis |
| -- | Cash generation of $1.1 million; cash balance of $27.6 million |
| -- | EBITDA at $1.0 million, or $0.03 per share |
| -- | Strong growth in advertising and enterprise segments |
"The business is now generating profits and cash," said Jeffrey Schwartz, president and CEO of Autobytel Inc. "Hitting the net income milestone is the high-point of 2002, which was our year of fixing and building. As we move into 2003, we have a stronger base from which to leverage and extend the business.
"Our operating metrics are improving significantly and our customer relationships are solid. I feel very confident about our prospects in the coming year."
Autobytel reported net income for the fourth quarter ended Dec. 31, 2002 of $0.5 million, or $0.01 per share. This compares with a net loss for the quarter ended Dec. 31, 2001 of $(0.9) million, or $(0.03) per share, and a net loss for the third quarter ended Sept. 30, 2002 of $(2.1) million, or $(0.07) per share.
While the company has reported pro forma earnings before interest, taxes, depreciation, amortization and non-recurring charges (pro forma EBITDA) in the previous four quarters, this is the first quarter in its history of positive EBITDA without adjustments, and positive net income on a Generally Accepted Accounting Principles (GAAP) basis.
During the fourth quarter, Autobytel generated $1.1 million in cash, marking its second consecutive quarter of cash generation. The company generated $4.2 million in cash in the second half of fiscal year 2002, as compared with using $9.6 million in cash in the first half of 2002. The company's cash balance as of Dec. 31, 2002 was $27.6 million.
Revenue for the fourth quarter ended Dec. 31, 2002 totaled $20.0 million, slightly down from revenue of $20.5 million for the quarter ended Dec. 31, 2001 and a 4% sequential increase from third quarter 2002 revenues of $19.3 million.
EBITDA for the fourth quarter of 2002 totaled $1.0 million, or $0.03 per share. This compares with pro forma EBITDA of $0.2 million, or $0.01 per share, for the fourth quarter ended Dec. 31, 2001. For the third quarter ended Sept. 30, 2002, pro forma EBITDA was $0.6 million or $0.02 per share. There were no charges excluded from EBITDA for the fourth quarter of 2002.
For fiscal year 2002, the net loss was $(20.7) million, or $(0.67) per share compared with a fiscal 2001 loss of $(44.9) million, or $(1.84) per share.
For fiscal year 2002, revenues were $80.9 million, a 14% increase over 2001 revenues of $71.1 million.
Fiscal year 2002 pro forma EBITDA was $2.6 million, or $0.08 per share, versus a fiscal year 2001 pro forma EBITDA loss of $(10.1) million, or $(0.41) per share. Fiscal year 2001 pro forma EBITDA, and quarterly results for the first three quarters of 2002, were impacted by various non-recurring charges. A reconciliation of GAAP to pro forma is included in the attached Consolidated Statements of Operations.
"Growing revenues 14% year over year is a sign of accomplishment, especially as it reflects the strength of our enterprise and advertising segments. During the year, we grew enterprise revenues nearly 60% and advertising revenues -- in a year generally acknowledged as soft -- by over 80%," said Schwartz.
Highlights for the Fourth Quarter
Revenues: Autobytel reported fourth quarter revenues of $20.0 million, of which $13.1 million was related to Program Fees, $3.5 million was related to Enterprise Sales, $2.5 million was related to Advertising, and $0.9 million was related to Other Products and Services.
Operating Expenses: Total operating expenses in the fourth quarter were $19.7 million. Sales and marketing expenses totaled $12.0 million, including customer acquisition costs. Product development and technology costs totaled $5.5 million. General and administrative costs totaled $2.2 million.
Unique Visitor Count: Autobytel's four Web site properties -- Autobytel.com, Autoweb.com, Carsmart.com and AutoSite.com -- received about 3.6 million average unique monthly visitors in the fourth quarter of 2002 according to Nielsen Net Ratings, and ranked as the most visited car-buying and research network in December 2002. This was a significant increase over the 3.0 million average unique monthly visitors in the fourth quarter of 2001. In the fourth quarter of 2002, Autobytel content and technology had potential exposure to more than 94 percent of the active Digital Media Universe(a).
Purchase Requests: The company delivered approximately 800,000 Purchase Requests during the fourth quarter of 2002, of which about 600,000 were delivered to program dealers and the remaining 200,000 to enterprise dealers. Revenue per Purchase Request for program dealers increased about 5% sequentially, from $20.38 in the third quarter to $21.38 in the fourth quarter.
Dealer Count: The company reported approximately 20,250 dealer relationships in the fourth quarter, about 5,400 of which were program dealer relationships and about 150 of which were Retention Performance Marketing (RPM) dealer relationships. The remaining 14,700 dealer relationships were included in the enterprise sales category.
Headcount: As of Dec. 31, 2002, the company had 229 employees, essentially the same as in the third quarter of 2002.
Quality Initiatives: Autobytel continued achieving improved efficiencies during the quarter through its proprietary Quality Verification System(SM), Dealer Management Report and Dealer Opportunity Report. The Quality Verification System(SM) is designed to ensure that dealers receive Purchase Requests only from serious car buyers. The Dealer Management Report provides dealers with direct customer feedback to help them improve their sales closing ratios. The Dealer Opportunity Report works to optimize each customer contact made by the company's sales force.
"As a result of our quality-improvement initiatives, dealer closing ratios rose 33% during 2002," said Schwartz. "For the quarter, the average cost to sell a car through Autobytel was $128 -- compared to about $475 using traditional media."
Business Outlook
The company expects organic revenue growth of 5% to 10% in 2003 over 2002, and positive net income and positive cash flow for 2003. The company will update EPS guidance during the year.
Conference Call
In conjunction with Autobytel's fourth quarter and year 2002 earnings release, there will be a conference call broadcast live over the Internet today, Jan. 30, 2003, at 4:30 p.m. EST (1:30 p.m. PST). Links to the Webcast conference call follow:
http://www.irconnect.com/abtl/conf/4q2002.mhtml
The Webcast will be archived within 2 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/conf/4q2002.mhtml
About Autobytel Inc.
Autobytel, a leading Internet automotive marketing services company, helps retailers sell cars and manufacturers build brands through marketing, advertising and CRM (customer relationship management) programs. The company owns and operates the automotive Web sites Autobytel.com, Autoweb.com, Carsmart.com and popular automotive research center, AutoSite.com, as well as AIC (Automotive Information Center), a leading provider of automotive marketing data and technology.
Autobytel is the Internet's largest new-car buying service and, in 2002, generated more than a billion dollars a month in car sales for dealers through its services. Autobytel is also among the largest syndicated car-buying content networks, reaching millions of unique visitors as they are making their vehicle buying decisions. Autobytel content and technology has potential exposure to more than 94 percent of the active Digital Media Universe(a).
(a) Nielsen//NetRatings Q4 2002 Digital Media Universe Report (Autobytel is the unduplicated audience of the Autobytel, Autoweb.com, CarSmart and Autosite.com Brands. Autobytel provides content to the Yahoo!, AOL and MSN portals and various automotive manufacturers' sites. The unduplicated audience of these Brands has an active reach of more than 94 percent of the Digital Media Universe).
FORWARD-LOOKING STATEMENT DISCLAIMER
The statements contained in this news release that are not historical facts are forward-looking statements under the federal securities laws. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed in, or implied by, such forward-looking statements. Autobytel undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those expressed in, or implied by, the forward-looking statements are changes in general economic conditions, the economic impact of past or future terrorist attacks or military actions, increased dealer attrition, pressure on dealer fees, increased or unexpected competition, that actual costs and expenses exceed the charges taken by the company, changes in laws and regulations and other matters disclosed in Autobytel's filings with the Securities and Exchange Commission. Investors are strongly encouraged to review the company's annual report on Form 10-K for the year ended Dec. 31, 2001, and other filings with the Securities and Exchange Commission for a discussion of risks and uncertainties that could affect operating results and the market price of the company's stock.
Autobytel Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
ASSETS
Dec. 31, Dec. 31,
2002 2001
(unaudited)
Current assets:
Domestic cash and cash equivalents $27,543 $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 $4,214 and $7,109, respectively 6,757 8,519
Prepaid expenses and other current assets 3,495 4,419
Total current assets 37,823 74,775
Property and equipment, net 2,088 2,889
Capitalized software, net 2,105 4,319
Investment in unconsolidated subsidiary 4,745 --
Goodwill, net 8,367 8,644
Other assets 96 154
Total assets $55,224 $90,781
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,529 $9,108
Accrued expenses 4,795 9,005
Accrued restructuring -- current 223 --
Deferred revenues 3,651 4,800
Other current liabilities 349 300
Total current liabilities 12,547 23,213
Accrued restructuring -- non-current 255 --
Total liabilities 12,802 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; 31,195,681 and 30,969,377
shares issued and outstanding,
respectively 31 31
Additional paid-in capital 203,623 203,280
Accumulated other comprehensive loss (40) (2,438)
Accumulated deficit (161,192) (140,478)
Total stockholders' equity 42,422 60,395
Total liabilities and stockholders'
equity $55,224 $90,781
Note: Balances as of Dec. 31, 2002 exclude consolidation of the
financial position of Autobytel.Europe.
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
(unaudited)
Fourth Quarter Ended Dec. 31, 2002(a)
Pro Forma Pro
GAAP Adjustments Forma(b)
Revenues:
Program fees $13,133 $-- $13,133
Enterprise sales 3,524 -- 3,524
Advertising 2,493 -- 2,493
Other products and services 860 -- 860
Total revenues 20,010 -- 20,010
Operating expenses:
Sales and marketing 11,958 (15)(c) 11,943
Product and technology development 5,486 (604)(c) 4,882
General and administrative 2,209 (29)(c) 2,180
Goodwill impairment -- -- --
Autobytel.Europe restructuring,
impairment and other
international charges -- --
Domestic restructuring and other
charges -- -- --
Total operating expenses 19,653 (648) 19,005
Income (loss) from operations 357
Pro forma EBITDA(b) 648 1,005
Interest income, net 86 -- 86
Foreign currency exchange gain -- -- --
Equity income in unconsolidated
subsidiaries(a) 62 -- 62
Other expense (43) -- (43)
Income (loss) before minority
interest and income taxes 462 648 1,110
Minority interest -- -- --
Income (loss) before income taxes 462 648 1,110
Provision for income taxes -- -- --
Depreciation, amortization and
stock compensation expense 648(c) 648
Pro forma net income (loss) before non-
recurring charges $-- $462
Net income (loss) $462
Income (loss) from operations/
Pro forma EBITDA per share:
Basic $0.01 $0.03
Diluted $0.01 $0.03
Net income (loss)/
Pro forma net income (loss)
before non-recurring charges
per share:
Basic $0.01 $0.01
Diluted $0.01 $0.01
Shares used in computing income
(loss) per share:
Basic 31,194,007 31,194,007
Diluted 32,034,853 32,034,853
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
(unaudited)
Fourth Quarter Ended Dec. 31, 2001(a)
Pro Forma Pro
GAAP Adjustments Forma(b)
Revenues:
Program fees $14,769 $-- $14,769
Enterprise sales 1,767 -- 1,767
Advertising 2,290 -- 2,290
Other products and services 1,679 -- 1,679
Total revenues 20,505 -- 20,505
Operating expenses:
Sales and marketing 12,501 (39)(c) 12,462
Product and technology
development 6,241 (1,265)(c)(d) 4,976
General and administrative 4,008 (1,123)(c)(d) 2,885
Goodwill impairment 1,253 (1,253)(e) --
Autobytel.Europe
restructuring, impairment
and other international
charges (3,973) 3,973(f) --
Domestic restructuring and
other charges 1,399 (1,399)(f) --
Total operating expenses 21,429 (1,106) 20,323
Income (loss) from operations (924)
Pro forma EBITDA(b) 1,106 182
Interest income, net 548 -- 548
Foreign currency exchange gain 1 -- 1
Equity income in unconsolidated
subsidiaries(a) -- -- --
Other expense -- -- --
Income (loss) before minority interest
and income taxes (375) 1,106 731
Minority interest (523) -- (523)
Income (loss) before income taxes (898) 1,106 208
Provision for income taxes (2) -- (2)
Depreciation, amortization
and stock compensation expense 921(c) 921
Pro forma net income (loss)
before non-recurring charges $185 $(711)
Net income (loss) $(896)
Income (loss) from operations/
Pro forma EBITDA per share:
Basic $(0.03) $0.01
Diluted $(0.03) $0.01
Net income (loss)/Pro forma
net income (loss) before
non-recurring charges per share:
Basic $(0.03) $(0.02)
Diluted $(0.03) $(0.02)(g)
Shares used in computing
income (loss) per share:
Basic 30,967,765 30,967,765
Diluted 30,967,765 31,198,259
Notes:
(a) Results through March 28, 2002 include the consolidation of
Autobytel.Europe. Subsequent to this date, results include
Autobytel.Europe in equity income of unconsolidated subsidiaries
accounted for under the equity method of accounting.
(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 (g).
(c) Adjustments for depreciation and amortization expense of $648 in
the fourth quarter of 2002 and depreciation, amortization and
stock compensation expense of $ 921 in the fourth quarter of 2001.
No stock compensation expense was incurred in the fourth quarter
of 2002.
(d) Adjustments for severance payment for executives totaling $1,506.
(e) Adjustments for goodwill impairment related to the company's
acquisition of A.I.N. Corp.
(f) Adjustments for restructuring and one-time (benefits.)
(g) Diluted pro forma net loss before non-recurring charges per share
for the fourth quarter ended Dec. 31, 2001 has been computed
excluding common share equivalents as their effect is
anti-dilutive.
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
(unaudited)
Year Ended Dec. 31, 2002(a)
Pro Forma Pro
GAAP Adjustments Forma(b)
Revenues:
Program fees $58,008 $-- $58,008
Enterprise sales 10,504 -- 10,504
Advertising 7,914 -- 7,914
Other products and services 4,429 -- 4,429
Total revenues 80,855 -- 80,855
Operating expenses:
Sales and marketing 49,082 (119)(c) 48,963
Product and technology
development 22,695 (3,099)(c) 19,596
General and administrative 9,876 (169)(c) 9,707
Goodwill impairment -- -- --
Autobytel.Europe restructuring,
impairment and other
international charges 15,015 (15,015)(f) --
Domestic restructuring and
other charges 1,800 (1,800)(h) --
Total operating
expenses 98,468 (20,202) 78,266
Loss from operations (17,613)
Pro forma EBITDA(b) 20,202 2,589
Loss on sale of investment in
Autobytel.Europe (4,168) 4,168(j) --
Interest income, net 686 -- 686
Foreign currency exchange
gain (loss) (2) -- (2)
Equity loss in unconsolidated
subsidiaries(a) (434) -- (434)
Other expense (43) -- (43)
Income (loss) before
minority interest
and income taxes (21,574) 24,370 2,796
Minority interest 866 -- 866
Income (loss) before income
taxes (20,708) 24,370 3,662
Provision for income taxes 6 -- 6
Depreciation, amortization and stock
compensation expense 3,387(c) 3,387
Pro forma net income (loss) before non-
recurring charges $20,983 $269
Net loss $(20,714)
Loss from operations/Pro forma EBITDA per
share:
Basic $(0.57) $0.08
Diluted $(0.57) $0.08
Net loss/Pro forma net income
(loss) before non-recurring
charges per share:
Basic $(0.67) $0.01
Diluted $(0.67) $0.01
Shares used in computing income (loss) per
share:
Basic 31,143,099 31,143,099
Diluted 31,143,099 32,023,703
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
(unaudited)
Year Ended Dec. 31, 2001(a)
Pro Forma Pro
GAAP Adjustments Forma(b)
Revenues:
Program fees $52,306 $-- $52,306
Enterprise sales 6,610 -- 6,610
Advertising 4,321 -- 4,321
Other products and services 7,831 -- 7,831
Total revenues 71,068 -- 71,068
Operating expenses:
Sales and marketing 50,648 (197)(c) 50,451
Product and technology
development 20,410 (2,349)(c)(d) 18,061
General and administrative 14,973 (2,294)(c)(d) 12,679
Goodwill impairment 22,867 (22,867)(e) --
Autobytel.Europe
restructuring, impairment
and other international
charges 7,229 (7,229)(g) --
Domestic restructuring and
other charges 4,514 (4,514)(i) --
Total operating
expenses 120,641 (39,450) 81,191
Loss from operations (49,573)
Pro forma EBITDA(b) 39,450 (10,123)
Loss on sale of investment in
Autobytel.Europe -- -- --
Interest income, net 3,338 -- 3,338
Foreign currency exchange
gain (loss) 426 -- 426
Equity loss in unconsolidated
subsidiaries(a) (500) -- (500)
Other expense -- -- --
Income (loss) before
minority interest
and income taxes (46,309) 39,450 (6,859)
Minority interest 1,485 -- 1,485
Income (loss) before income
taxes (44,824) 39,450 (5,374)
Provision for income taxes 27 -- 27
Depreciation, amortization
and stock compensation
expense 3,334(c) 3,334
Pro forma net income (loss)
before non-recurring
charges $36,116 $(8,735)
Net loss $(44,851)
Loss from operations/Pro forma
EBITDA per share:
Basic $(2.03) $(0.41)
Diluted $(2.03) $(0.41)
Net loss/Pro forma net income
(loss) before non-recurring
charges per share:
Basic $(1.84) $(0.36)
Diluted $(1.84) $(0.36)
Shares used in computing
income (loss) per share:
Basic 24,403,609 24,403,609
Diluted 24,403,609 24,403,609
Notes:
(a) Results through March 28, 2002 include the consolidation of
Autobytel.Europe. Subsequent to this date, results include
Autobytel.Europe in equity income of unconsolidated subsidiaries
accounted for under the equity method of accounting. Results also
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 (j).
(c) Adjustments for depreciation, amortization and stock compensation
expenses of $3,387 and $3,334 in the year ended Dec. 31, 2002
and 2001, respectively.
(d) Adjustments for severance payments for executives totaling $1,506.
(e) Adjustments for impairment of goodwill related to the company's
acquisition of A.I.N. Corp.
(f) Adjustments for the change in Autobytel.Europe's capital structure
and impairment of the company's investment in Autobytel.Europe.
(g) Adjustments for the restructuring of Autobytel.Europe, the
write-off of obsolete international software and the write-off of
investments in European joint ventures net of one-time benefits.
(h) Adjustments for the write-off of previously capitalized software
related to the development of global baseline technology, charges
related to the company's reduction in workforce, 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.
(i) Adjustments for the restructuring of the company's automotive
operations group, contract termination costs related to online
advertising and the company's aftermarket program, as well as the
write-off of previously capitalized software related to its
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.
(j) Adjustment for loss on sale of investment in Autobytel.Europe
resulting in a reduction in 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 Twelve Months
Ended Ended
Dec. 31, Dec. 31,
2002 2001 2002 2001
Cash flows from operating
activities:
Net loss $462 $(896) $(20,714) $(44,851)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Non-cash charges:
Depreciation and
amortization 648 864 3,367 3,092
Provision for bad debt and
customer credits 1,920 3,733 8,642 9,725
(Gain) loss on disposal of
property and equipment (9) 271 41 561
Compensation expense
recorded for fair market
value of stock options in
excess of exercise
price -- 57 20 242
Autobytel.Europe
restructuring and
impairment -- -- 15,015 --
Loss on sale of investment
in Autobytel.Europe -- -- 4,168 --
Equity (gain) loss in
unconsolidated
subsidiaries (61) -- 434 500
Minority interest -- 523 (866) (1,485)
Impairment of goodwill -- 1,253 -- 22,867
Write-down of capitalized
software costs 79 -- 1,937 1,434
Write-off of investments in
foreign entities -- -- -- 2,142
Write-down of property and
equipment -- 15 -- 257
Changes in assets and
liabilities:
Accounts receivable (679) (1,256) (6,652) (5,391)
Prepaid expenses and other
current assets (409) (56) 908 3,026
Other assets -- 1 58 3
Accounts payable (1,122) (2,661) (5,541) (1,781)
Accrued expenses 593 (7,561) (3,211) (8,502)
Deferred revenues (239) (277) (1,149) (1,004)
Other current liabilities 93 67 105 (71)
Accrued restructuring and
other liabilities -- non
current (64) -- 255 (482)
Net cash provided by
(used in) operating
activities 1,212 (5,923) (3,183) (19,718)
Cash flows from investing
activities:
Deconsolidation of
Autobytel.Europe -- -- (28,163) --
Acquisition of business, net
of cash acquired -- -- -- 5,697
Investment in foreign
entities -- -- -- (413)
Sale of investment in foreign
entity -- 109 -- 109
Investment in unconsolidated
subsidiary -- -- (400) --
Notes receivable from foreign
entity -- (109) -- (197)
Repayment of notes receivable
from foreign entity -- -- -- 292
Purchases of property and
equipment (172) (459) (1,087) (2,444)
Proceeds from sale of
property and equipment 12 -- 168 --
Capitalized software costs -- (663) (1,412) (3,135)
Net cash used in
investing
activities (160) (1,122) (30,894) (91)
Cash flows from financing
activities:
Net proceeds from sale of
common stock 10 -- 323 123
Net proceeds from sale of
subsidiary company stock -- -- -- 2,000
Net cash provided by
financing activities 10 -- 323 2,123
Effect of exchange rates on cash 1 (701) (512) (2,422)
Net increase (decrease) in cash
and cash equivalents 1,063 (7,746) (34,266) (20,108)
Cash and cash equivalents,
beginning of period 26,508 69,583 61,837 81,945
Cash and cash equivalents, end of
period $27,571 $61,837 $27,571 $61,837
Supplemental disclosure of cash
flow information:
Cash paid during the period
for income taxes $-- $26 $6 $27
Cash paid during the period
for interest $1 $1 $2 $5