Auto Data Network Reports Revenue of $16 Million and EPS of $0.05 For First Quarter of Fiscal 2005; First Quarter Revenue Increases 57 Percent Over Fourth Quarter
NEW YORK--July 15, 2004--Auto Data Network, Inc. (OTCBB: ADNW), a provider of software and real-time data services to the worldwide automotive industry, today announced financial results for its first fiscal quarter ended May 3, 20041, 2004. The Company reported revenues of $16.1 million for the first quarter of its 2005 fiscal year, an increase of $12.8 million or 384 percent compared to revenues of $3.3 million for the corresponding quarter in fiscal year 2004 and an increase of $5.8 million or 57 percent compared to the fourth quarter of fiscal 2004 revenue of $10.2 million.ADN reported net income for the first quarter of $1.1 million or $0.05 per share compared to net income of $354,000 or $0.03 per share for the corresponding quarter in fiscal year 2004 and net income of $624,000 or $0.04 per share in the prior fiscal quarter.
Total operating expenses for the first quarter increased to $5.3 million from $4.7 million in the prior quarter and $1.1 million in the first quarter of its previous fiscal year. The increase in operating costs was largely attributable to increased personnel recruitment costs ahead of the planned DCS Automotive acquisition, which is expected to close during the current fiscal second quarter. However, the current first quarter operating expenses represented 33 percent of revenue, an improvement from the previous quarter average of 46 percent and in line with the previous fiscal year first quarter average of 33 percent.
"It was an outstanding quarter. We had a very strong start to the new fiscal year borne from our recent acquisitions, which has resulted in our most successful quarterly operating profit to date, despite what remains a challenging market environment for the IT industry," commented Chris Glover, ADN's chairman. "We are creating an information-rich, collaborative networked infrastructure, providing our automotive retailing customers with choices in the way they can access and use software applications to run their business more efficiently. We are in the process of taking the traditional Dealer Management System to the next level of functionality, where it will meet the needs of modern automotive retailing within a single software environment."
Mr. Glover continued, "We're still early on in the adoption cycle but the market is just beginning the move to information empowered software applications, and Auto Data Network will be leading the way. Our recent purchase of IFAct, combined with previously acquired County Products, strategically positions the company to establish a strong market presence when the EU Insurance Mediation Directive is adopted in January 2005. Our unique software offers automotive dealers in Europe and the UK a cost-effective means of satisfying the new SFA requirements. Customer response to this product has been highly encouraging."
On March 15, 2004, ADN acquired a one-third equity interest in DCS Automotive Holdings Limited for $11 million and the Company has the right to purchase the remaining two-thirds equity interest. DCS is the leading provider of DMS systems in France, Germany and Switzerland with over 11,000 clients - this client base is in the same range as U.S. market leaders Reynolds and Reynolds and ADP Automotive . The Company remains on track to complete this acquisition during its fiscal second quarter.
"We continue to define, invest in and deliver solutions that deliver value for our customers and remain convinced that we have the right strategy to profitably gain a strong customer base, which will serve as a foundation for future organic growth," concluded Mr. Glover.
Auto Data Network will conduct a conference call today at 4:15 p.m. (EDT) to present its fiscal first quarter results and to respond to investor questions. Interested shareholders may participate in the call by dialing 888-391-0071 (U.S.) or 212-696-4907 (outside of the U.S.) and providing the following reservation number: 21202542. It is recommended that participants call 10 minutes before the conference call is scheduled to begin. The conference call can also be accessed over the Internet through Vcall at www.vcall.com. A replay of the call will be available approximately one hour after the completion of the conference call for one month through Vcall and for 24 hours by dialing 800-633-8284 and entering the reservation number listed above.
About Auto Data Network
Auto Data Network is a group of established companies that provide real time data and transactional services and software products to the automotive industry. The company's main customer base is the auto dealership marketplace, which consists of approximately 78,000 dealers in North America and 92,000 dealers in Europe. Auto Data's objective is to create the most comprehensive, online database for the European and U.S. automotive sectors to improve efficiency, competitiveness and cultivate communications between dealers, suppliers, OEMs and customers to reduce costs and increase clients' profitability.
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships; technological obsolescence; general economic conditions; and other risks detailed time to time in the Company's filings with the Securities and Exchange Commission (SEC).
Auto Data Network, Inc.
Consolidated Statements of Financial Condition
As of As of
May 31, February 29,
2004 2004
ASSETS
Current Assets
Cash and equivalents $ 8,385,740 $ 6,282,465
Accounts receivable 9,663,471 12,398,307
Other accounts receivable 4,212,731 892,435
Prepaid expenses 1,525,978 335,066
Inventories 2,714,010 2,419,465
----------- -----------
Total Current Assets 26,501,930 22,327,738
Other Receivables more than one year 3,515,897 0
Fixed Assets less accumulated depreciation 1,349,122 2,344,988
Goodwill 22,530,768 16,942,003
Investments 10,958,797 4,716,354
----------- -----------
TOTAL ASSETS $66,308,561 $46,331,083
=========== ===========
LIABILITIES
Current Liabilities
Accounts payable $ 5,942,329 $ 7,025,766
Accrued expenses and sundry accounts
payable 1,406,693 659,334
Bank loans and overdrafts 540,076 8,293
Taxation payable 2,210,611 1,776,491
Deferred Revenue 1,797,641 990,108
Other current liabilities 1,544,130 1,566,189
Other short term loans 38,369 0
----------- -----------
Total Current Liabilities 13,479,849 13,135,407
LONG TERM LIABILITIES
Deferred income 1,038,443 2,486,444
Other 13,260 0
----------- -----------
Total Liabilities 14,531,552 15,621,851
----------- -----------
SHAREHOLDERS' EQUITY
Common stock ($.001 par value); authorized
50,000,000 shares; issued and
outstanding 26,740,114 23,740 23,602
Preferred stock ($.001 par value)authorized
25,000,000 shares; issued and
outstanding 7,484,000 7,484 2,866
Additional paid in capital 48,084,917 28,049,231
Accumulated other comprehensive loss (324,499) (318,703)
Retained earnings B/Fwd 2,868,624 2,868,619
Current post-acquisition profit 1,113,743 0
Pre-acquisition reserve 83,617
-----------
Total Shareholders' Equity 51,777,009 30,709,232
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $66,308,561 $46,331,083
=========== ===========
Auto Data Network, Inc.
Consolidated Statements of Operations
Three Months Ended
----------------------------
May 31, 2004 May 31, 2003
------------- --------------
Revenue $16,080,235 $ 3,322,289
Cost of Revenue 9,082,783 1,657,129
----------- -----------
Gross Margin 6,997,452 1,665,160
Operating Expenses
Personnel 3,105,586 471,951
Sales and marketing 263,458 69,256
General and administration 1,764,487 531,378
Depreciation and amortization 191,340 18,355
-----------
Total Operating Expenses 5,324,871 1,090,940
-----------
Total Operating Profit/(Loss) 1,672,581 574,220
Interest expense (155,623) (13,906)
Foreign exchange gain/(loss) (5,485) 0
------------- -------------
Net Profit/(Loss) before Tax 1,511,473 560,314
Provision for Taxation 226,721 205,910
Share of loss in associate company 48,203 0
Dividend to preferred shareholders 122,806 0
----------- -----------
Net profit after tax $ 1,113,743 $ 354,404
----------- -----------
Net profit per share $ 0.05 $ 0.03
----------- -----------
Weighted average shares outstanding 24,369,545 13,552,289