Autobytel Reports Results for Second Quarter 2004
IRVINE, Calif.--July 22, 2004--Autobytel Inc. -- Revenues increase 45% year over year to a record $31.5 million -- EBITDA increases 31% year over year to $2.2 millionLeading Internet automotive marketing services company Autobytel Inc. today announced financial results for the second quarter ended June 30, 2004.
Highlights for the quarter:
-- Completed two acquisitions in early April - iDriveonline, Inc. and Stoneage Corporation (Car.com)
-- Revenues at a record $31.5 million, a 45% increase year over year, and a 27% sequential growth
-- Net income of $1.3 million, a 13% increase year over year, or $0.03 per diluted share
-- EBITDA of $2.2 million, a 31% increase year over year, or $0.05 per diluted share
-- Integration costs of $1.0 million, amortization of intangibles at $0.4 million
-- Domestic cash generation of $2.6 million, excluding cash used for acquisitions
-- Domestic cash balance of $46.0 million
-- Total Purchase Request volume at 1.2 million, a 45% sequential increase
-- Dealer closing ratio increases to a record 18.5%
-- Advertising revenue increases 10% sequentially; CPM increased to $40
"We are pleased with our accomplishments during the quarter," said Jeffrey Schwartz, president and CEO of Autobytel Inc. "We completed two acquisitions, grew the business 45%, saw improvements in pricing and margin, and finished the quarter with a record closing ratio. We remain on track to achieve our financial objectives for the year."
Revenues for the second quarter ended June 30, 2004 totaled $31.5 million, a 27% sequential increase over revenues of $24.8 million for the first quarter ended March 31, 2004, and a 45% increase over revenues of $21.7 million for the second quarter ended June 30, 2003.
In line with prior guidance, Autobytel reported GAAP net income for the second quarter ended June 30, 2004 of $1.3 million, or $0.03 per diluted share, versus $2.1 million, or $0.05 per diluted share, reported for the first quarter ended March 31, 2004. The net income of $1.3 million in the second quarter represents a 13% increase over net income of $1.1 million for the second quarter ended June 30, 2003.
In line with prior guidance, GAAP results for the second quarter of 2004 include integration and amortization expenses of $1.0 million and $0.4 million, respectively.
For the quarter ended June 30, 2004, Autobytel reported EBITDA of $2.2 million, or $0.05 per diluted share, versus $2.6 million, or $0.06 per diluted share for the first quarter ended March 31, 2004. This compares to EBITDA of $1.7 million for the second quarter ended June 30, 2003, a 31% increase year over year. Results for the second quarter of 2004 include integration expenses of $1.0 million.
The Company generated $2.6 million in domestic cash, excluding $20.6 million used during the quarter for acquisitions. The Company's cash balance was $54.0 million, of which $46.2 million was for domestic operations, including long-term marketable securities of $15.0 million.
Highlights for the Second Quarter
Revenues: Second quarter revenues were $31.5 million, of which $21.5 million was related to Lead Fees; $3.4 million was related to Advertising; $5.3 million was related to CRM Services, and $1.3 million was related to Data, Applications & Other.
Operating Expenses: Total operating expenses in the second quarter, including depreciation and amortization, were $30.4 million. Sales and marketing expenses totaled $18.8 million, product development and technology costs totaled $6.4 million, and general and administrative costs totaled $5.2 million.
Purchase Requests: The Company delivered approximately 1.2 million Purchase Requests during the second quarter of 2004, including 139,000 Finance Requests, a 45% sequential increase, compared to 860,000 Purchase Requests delivered in the first quarter of 2004.
Dealer Count: The Company added approximately 1,400 retail dealer relationships to its core business in the second quarter, including those added through the acquisition of Stoneage Corporation. This marks the fourth consecutive quarter of net dealer additions in the Company's core business.
The Company added approximately 400 dealer relationships to its CRM services business, including those added through the acquisition of iDriveonline. The Company recently announced CRM accounts with Mitsubishi and Hyundai.
The Company reported approximately 35,800 dealer relationships. Included in this number are about 30,400 relationships in the Lead Fees category and about 5,400 relationships in the CRM Services category.
Quality Initiatives: Closing ratios for Autobytel's retail dealers, excluding Car.com, increased to 18.5%, representing continued improvement from the first quarter 2004 closing ratio of 17%.
Capital Expenditures: Total capital expenditures in the second quarter were $0.6 million compared to $0.4 million in the first quarter ended March 31, 2004. The increased expenditures reflect the spending on the integration of the acquisitions. The Company expects additional capital expenditures of approximately $1.4 million for the second half of 2004.
Depreciation and Amortization: Second quarter expenses were $1.1 million compared to $0.7 million in the first quarter ended March 31, 2004. The $1.1 million for depreciation and amortization consisted of $0.4 million for depreciation of fixed assets, $0.3 million for amortization of capitalized software, and $0.4 million for amortization of intangible assets associated with acquisitions. The Company expects this cost to increase to $1.3 million per quarter for the balance of 2004.
Headcount: The Company's headcount increased to 402, primarily due to the acquisition of iDriveonline and Stoneage. This compares to headcount of 328 as of March 31, 2004. The headcount from the acquisitions was reduced by about 40% during the quarter.
Autobytel.Europe: In accordance with FIN 46R, the Company consolidated Autobytel.Europe in the Company's financial statements. In the second quarter, Autobytel.Europe's cash balance decreased by $2.2 million, primarily for payments to licensees under agreements in connection with the restructuring in March 2002. Exhibit 1 shows the balance sheet with the amounts attributable to Autobytel.Europe.
Share Count: The Company estimates the fully diluted share count for the fourth quarter 2004 to be at 46.9 million shares and the fully diluted share count for fiscal year 2005 to be at 47.6 million shares.
Acquisitions and Integration: Commenting on the progress of the iDriveonline and Stoneage integrations, Schwartz noted: "We are making substantial progress. Integration of all finance, accounting, and sales systems and structures is complete and work on bringing together the IT platforms is steadily advancing. By accelerating the integration work, we have not increased expenses, only moved them forward. This will allow us to more quickly capture the financial benefits and synergies of the transactions."
Business Outlook: On a going-forward basis, the Company will use EBITDA as a supplement to its financial statements, which are presented in accordance with GAAP. Given the Company's current business strategy, the Company believes that EBITDA will assist investors in their understanding of Autobytel's operations, cash generation, and resources available for strategic opportunities, including reinvestment in the business and acquisitions.
The Company reiterates its previous guidance for 2004 of revenues between $120 million and $125 million and GAAP net income of $11 million, or $0.25 per diluted share. The Company estimates EBITDA for 2004 of approximately $15 million, or $0.33 per diluted share.
For 2005, the Company maintains its guidance of $150 million to $160 million in revenues, and $25 million of PBT (Profit Before Taxes), which equates to approximately $30 million in EBITDA.
Non-GAAP Measures: In addition to furnishing its consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), Autobytel discloses certain non-GAAP financial measures, including EBITDA and EBITDA per share, which are derived from results based on GAAP. Autobytel believes these non-GAAP measures assist users in understanding its results of operations, cash generated, and resources available for strategic opportunities, including reinvestment in the business and acquisitions.
The non-GAAP measures are provided to enhance the user's overall understanding of Autobytel's current financial performance and its prospects for the future. As such, these measures should be considered in addition to results prepared in accordance with GAAP and should not be considered a substitute for or superior to GAAP results. A reconciliation of the non-GAAP measures to the nearest GAAP measures is shown at Exhibit 2.
Conference Call
In conjunction with Autobytel Inc.'s second quarter 2004 earnings release, there will be a conference call broadcast live over the Internet today, July 22, 2004, at 4:30 PM EDT (1:30 PM PDT). The Webcast will be archived within 2 hours of the end of the call until the next quarter's earnings announcement. The link to the Webcast conference is as follows:
http://www.irconnect.com/abtl/conf/2q2004.html
About Autobytel Inc.
Autobytel Inc. , a leading Internet automotive marketing services company, helps retailers sell cars and manufacturers build brands through marketing, advertising, data and CRM (customer relationship management) products and programs. The Company owns and operates the automotive websites Autobytel.com, Autoweb.com, Car.com, Carsmart.com, and AutoSite.com, as well as AIC (Automotive Information Center), a trusted industry source of automotive marketing data and technology for over 20 years. Autobytel is also a leader in dealership lead management and CRM solutions and owns and operates AVV, Inc., a top provider of dealership CRM and sales management products, and Retention Performance Marketing, Inc. (RPM(R)), which powers dealerships with cutting-edge customer loyalty and retention marketing programs. As the Internet's largest new car buying service, Autobytel generates over a billion dollars a month in car sales for dealers through its services and was the most visited new car buying and research destination in 2003, reaching millions of car shoppers as they made their vehicle buying decisions. Autobytel's car-selling sites and lead management products are used by more of the nation's top-100 e-dealers than any other program.
Autobytel Inc.
CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
ASSETS
June March December
30, 31, 31,
2004 2004 2003
(unaudited) (unaudited)
Current assets:
Domestic cash and cash
equivalents $31,240 $49,270 $51,643
International cash and cash
equivalents 8,225 10,425 -
Short-term investments - - 3,991
Accounts receivable, net of
allowance for bad debts
and customer credits of $850,
$2,117 and $1,764, respectively 17,213 10,597 10,889
Prepaid expenses and other
current assets 2,677 1,146 833
Total current assets 59,355 71,438 67,356
Long-term investments 15,000 15,000 6,000
Property and equipment, net 3,141 2,123 2,138
Capitalized software, net 484 754 1,024
Investment in equity investee 827 824 2,810
Goodwill 69,477 16,830 16,830
Intangible assets, net 5,168 270 315
Other assets 121 554 155
Total assets $153,573 $107,793 $96,628
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,906 $4,255 $4,063
Accrued expenses 6,143 3,964 5,034
Deferred revenues 3,709 3,814 4,022
Accrued domestic restructuring 168 212 258
Accrued international licensee
liabilities - 1,541 -
Other current liabilities 587 405 441
Total current liabilities 17,513 14,191 13,818
Common stock due to former Stoneage
shareholders 685 - -
Total liabilities 18,198 14,191 13,818
Minority interest 4,594 4,623 -
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par
value; 11,445,187 shares
authorized - - -
Common stock, $0.001 par value;
200,000,000 shares authorized;
41,642,176, 38,570,537 and
37,786,767 shares issued and
outstanding, respectively 42 39 38
Additional paid-in capital 279,584 238,962 236,544
Accumulated other comprehensive
income 1,597 1,685 -
Accumulated deficit (150,442) (151,707) (153,772)
Total stockholders' equity 130,781 88,979 82,810
Total liabilities and
stockholders' equity $153,573 $107,793 $96,628
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands, except share and per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Revenues:
Lead fees $21,478 $15,508 $38,325 $30,131
Advertising 3,441 3,024 6,563 5,863
CRM services 5,312 2,068 8,775 3,520
Data, applications
and other 1,284 1,121 2,609 2,460
Total revenues 31,515 21,721 56,272 41,974
Operating expenses:
Sales and marketing 18,773 13,109 33,582 25,967
Product and
technology
development 6,431 4,454 11,519 8,316
General and
administrative 5,172 3,106 8,101 5,891
Total
operating
expenses 30,376 20,669 53,202 40,174
Income from
operations 1,139 1,052 3,070 1,800
Interest income 219 61 405 130
Income (loss) in equity
investee 18 14 (35) 67
Foreign currency
exchange gain 20 - 20 -
Other income - - 1 -
Income before
minority interest
and income taxes 1,396 1,127 3,461 1,997
Minority interest (62) - (62) -
Income before
income taxes 1,334 1,127 3,399 1,997
Provision for income
taxes (69) (5) (69) (7)
Net income $1,265 $1,122 $3,330 $1,990
Net income per share:
Basic $0.03 $0.04 $0.08 $0.06
Diluted $0.03 $0.03 $0.08 $0.06
Shares used in
computing net income
per share:
Basic 41,123,593 31,814,364 39,733,775 31,525,905
Diluted 44,695,148 33,950,507 43,643,296 33,138,530
EBITDA $2,215 $1,686 $4,781 $3,095
EBITDA per share:
Basic $0.05 $0.05 $0.12 $0.10
Diluted $0.05 $0.05 $0.11 $0.09
Autobytel Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2004 2003 2004 2003
Cash flows from operating
activities:
Net income $1,265 $1,122 $3,330 $1,990
Adjustments to reconcile net
income to net cash provided by
operating activities:
Non-cash charges:
Depreciation and
amortization 1,100 620 1,788 1,228
Provision for bad debt (317) 72 (240) 314
Customer credits 551 443 584 1,294
Loss on disposal of
property and equipment 20 - 20 -
Stock based compensation - 51 - 51
(Income) loss in equity
investee (18) (14) 35 (67)
Minority interest 62 - 62 -
Changes in assets and
liabilities:
Accounts receivable (1,725) (1,000) (1,457) (2,289)
Prepaid expenses and
other current assets (438) 443 (722) 1,536
Other assets 412 12 13 23
Accounts payable 995 74 1,082 449
Accrued expenses 83 419 (1,639) (1,022)
Deferred revenues (386) 113 (594) 66
Customer deposits - (69) - (76)
Accrued domestic
restructuring (44) (58) (90) (126)
Accrued international
licensee liabilities (1,541) - (1,541) -
Other current liabilities 98 42 60 24
Net cash provided by
operating activities 117 2,270 691 3,395
Cash flows from investing
activities:
Acquisitions of businesses, net
of cash acquired (20,630) (4,952) (20,630) (4,952)
Maturities of short-term
investments - - 3,991 -
Purchases of long-term
investments - - (9,000) -
Consolidation of
Autobytel.Europe cash balance - - 10,425 -
Purchases of property and
equipment (566) (114) (923) (145)
Net cash used in
investing activities (21,196) (5,066) (16,137) (5,097)
Cash flows from financing
activities:
Payments of capital lease
obligations (225) (8) (225) (8)
Net proceeds from sale of
common stock 1,238 25,673 3,657 25,809
Net cash provided by
financing activities 1,013 25,665 3,432 25,801
Effect of exchange rates on cash (164) 36 (164) 63
Net increase (decrease) in cash
and cash equivalents (20,230) 22,905 (12,178) 24,162
Cash and cash equivalents,
beginning of period 59,695 28,828 51,643 27,571
Cash and cash equivalents, end of
period $39,465 $51,733 $39,465 $51,733
Supplemental disclosure of cash
flow information:
Cash paid during the period for
income taxes $69 $5 $69 $7
Cash paid (refunded) during the
period for interest $- $2 $(1) $2
Exhibit 1
Autobytel Inc.
CONSOLIDATING BALANCE SHEET
As of June 30, 2004
(Dollar amounts in thousands, except share data)
(unaudited)
ASSETS
Autobytel. Consolidated
Autobytel Europe Elimination Autobytel
Current assets:
Domestic cash and
cash equivalents $31,240 $- $- $31,240
International cash
and cash
equivalents - 8,225 - 8,225
Accounts
receivable, net of
allowance for bad
debts and customer
credits of $850 17,051 162 - 17,213
Prepaid expenses
and other current
assets 2,671 6 - 2,677
Total current
assets 50,962 8,393 - 59,355
Long-term investments 15,000 - - 15,000
Property and
equipment, net 3,140 1 - 3,141
Capitalized software,
net 484 - - 484
Investment in equity
investee 2,817 827 (2,817) 827
Goodwill 69,477 - - 69,477
Intangible assets, net 5,168 - - 5,168
Other assets 121 - - 121
Total assets $147,169 $9,221 $(2,817) $153,573
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,833 $73 $- $6,906
Accrued expenses 5,993 150 - 6,143
Deferred revenues 3,697 12 - 3,709
Accrued domestic
restructuring 168 - - 168
Other current
liabilities 609 (22) - 587
Total current
liabilities 17,300 213 - 17,513
Common stock due to
former Stoneage
shareholders 685 - - 685
Total liabilities 17,985 213 - 18,198
Minority interest - - 4,594 4,594
Commitments and
contingencies
Stockholders' equity:
Preferred stock,
$0.001 par value;
11,445,187 shares
authorized - - - -
Common stock,
$0.001 par value;
200,000,000 shares
authorized;
41,642,176 shares
issued and
outstanding 42 18 (18) 42
Additional paid-in
capital 279,584 20,338 (20,338) 279,584
Accumulated other
comprehensive
income - 3,566 (1,969) 1,597
Accumulated deficit (150,442) (14,914) 14,914 (150,442)
Total
stockholders'
equity 129,184 9,008 (7,411) 130,781
Total liabilities
and
stockholders'
equity $147,169 $9,221 $(2,817) $153,573
Exhibit 2
Autobytel Inc.
Reconciliation of Net Income to EBITDA
(Dollar amounts in thousands, except share and per share data)
(unaudited)
Three Months Ended Three Months Ended
March 31, June 30,
2004 2003 2004 2003
Net Income $2,065 $868 $1,265 $1,122
Interest income (187) (69) (219) (61)
Provision for income
taxes - 2 69 5
Depreciation 358 338 415 329
Amortization of
capital leases 15 - 13 5
Amortization of
software
capitalization 270 270 270 271
Amortization of
intangible assets 45 - 402 15
EBITDA $2,566 $1,409 $2,215 $1,686
EBITDA per share:
Basic $0.07 $0.05 $0.05 $0.05
Diluted $0.06 $0.04 $0.05 $0.05
Shares used in
computing net income
per share:
Basic 38,343,958 31,234,243 41,123,593 31,814,364
Diluted 42,583,103 32,167,910 44,695,148 33,950,507
Exhibit 2
Autobytel Inc.
Reconciliation of Net Income to EBITDA
(Dollar amounts in thousands, except share and per share data)
(unaudited)
Six Months Ended
June 30,
2004 2003
Net Income $3,330 $1,990
Interest income (406) (130)
Provision for income
taxes 69 7
Depreciation 773 667
Amortization of
capital leases 28 5
Amortization of
software
capitalization 540 541
Amortization of
intangible assets 447 15
EBITDA $4,781 $3,095
EBITDA per share:
Basic $0.12 $0.10
Diluted $0.11 $0.09
Shares used in computing net income per share:
Basic 39,733,775 31,525,905
Diluted 43,643,296 33,138,530