Auto Data Network Reports Second Quarter Financial Results; Company Generates 5% Sequential Organic Growth and Delivers Eight Quarters of Consecutive Net Earning
NEW YORK & TUNBRIDGE WELLS, England--Oct. 1, 20049, 2004--Auto Data Network, Inc. (OTC BB: ADNW), a provider of software and real-time data services to the worldwide automotive industry, today announced financial results for its fiscal second quarter and six-month period ended August 31, 2004.For the second quarter, the Company reported revenues of $16.8 million, an increase of $11.2 million or 200 percent compared to revenues of $5.6 million for the corresponding quarter in fiscal year 2004, and an increase of $732,000 or 5 percent compared to the current fiscal year first quarter revenue of $16.1 million. Gross profit margins for the second quarter were 49.4 percent, up from 43.5 percent in the previous quarter of fiscal 2005, and compares to margins of 81.5 percent for the second quarter of fiscal 2004. Total operating expenses for the second quarter increased to $6.3 million from $3.4 million in the second quarter of fiscal 2004 and compares to $5.6 million first quarter of the current fiscal year. The increase in operating expenses was due to additional costs associated with acquisitions made over the last twelve months.
Auto Data Network reported net income for the second quarter of $1.2 million or $0.05 per share, compared to net income of $620,000 or $0.05 per share in the second quarter of fiscal 2004 and $1.0 million or $0.05 per share in the first fiscal quarter.
For the six-month period, the Company reported revenues of $32.9 million, an increase of $23.9 million or 265 percent compared to revenues of $9.0 million for the corresponding period in fiscal year 2004. Gross profit margins for the first six months were 47.5 percent compared to margins of 69.7 percent for the first six months of fiscal 2004. ADN reported net income for the six months of $2.3 million or $0.10 per share, compared to net income of $951,000 or $0.08 per share, for the first six months of fiscal 2004. Total operating expenses for the six months increased to $11.6 million from $4.5 million for the first six months of fiscal 2004.
"Our results are in line with our expectations for the first half of our fiscal year. The quarter-to-quarter improvement reflects the additional revenues and income from the continuing integration of existing product lines within the group and recently completed acquisitions," commented Chris Glover, Auto Data Network's chairman. "Our strategy of combining information-rich, collaborative software onto a single networked infrastructure for the automotive retailing industry is gaining traction in the marketplace. Our existing customers are responding favorably to accessing and utilizing our software applications to run their business more efficiently and we continue to acquire new customers. The acquisition of the remainder of DCS Automotive, Europe's largest dealer management systems provider, expected by the end of November, will provide an additional customer base of automotive dealers to cross-market our full-service suite of software applications and information services. By concluding this acquisition we will further augment our continuing organic growth. We are also excited about the continuing progress our CarParts subsidiary has demonstrated, including a notable new relationship with Big-O Tires."
Mr. Glover continued, "Business and regulatory pressures continue to set an agenda for change in the automotive industry. Contrary to the sluggish recovery of software investment by the industry, we are benefiting from a clear industry imperative to modernize its technology infrastructure and meet the demands of today's consumers. Despite a challenging environment for the rest of our sector, our combined suite of products and information services offer direct benefits to each link in the industry supply chain."
On August 3, 2004, Auto Data Network entered the U.S. market with the acquisition of CarParts Technologies, Inc. CarParts is a leading provider of eCommerce enabled software systems to the North American automotive aftermarket supply chain, including more than 3,000 locations with 10,000 users, such as leading automotive aftermarket chains including Monro Muffler & Brake in the U.S. and Fountain Tire in Canada.
Other highlights from the quarter include:
-- Auto Data Network's Avenida Technologies was awarded contracts with several top-tier clients, including Jaguar and Land Rover, for BrandSymphony(TM), an advanced electronic product information management system.
-- Motor Parts Direct Limited and Auto Data Network's subsidiary MAM Software agreed that Motor Parts will distribute MAM's Autowork software as part of their unique garage program.
-- IFact Group Limited was awarded a major contract by AXA Insurance to provide training and help develop AXA's top UK brokers to achieve insurance regulation under the FSA, in anticipation of the new UK insurance regulations, which take effect in January 2005.
-- MMI Automotive was awarded a contract to supply its group dealer management system, Automate, to the Mitsubishi Motors UK's dealer group, Colt Cars Mid-West Limited.
"We continue to investigate opportunities to expand our product offerings through strategic acquisitions. We intend to build on our industry leadership and drive growth by increasing sales of our applications, extending our position in core platforms and continuing to grow our customer base throughout the world," concluded Mr. Glover.
Auto Data Network will conduct a conference call at 10:00 a.m. (EDT) to present its fiscal second quarter results and to respond to investor questions. Interested shareholders may participate in the call by dialing 888-396-2369 (U.S.) or 617-847-8710 (outside of the U.S.) and providing the following passcode: 95404620. 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 CCBN at www.ccbn.com. A replay of the call will be available approximately one hour after its completion through midnight, Thursday, October 21, by dialing 888-286-8010 (617-801-6888 International) and entering passcode 31864800, and on the Internet at www.CCBN.com.
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 Operations
Three Months Ended Six Months Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2004 2003 2004 2003
------------ ------------ ------------ ------------
REVENUES $16,812,076 $ 5,612,054 $32,892,311 $ 9,006,104
COST OF REVENUES 8,499,859 1,038,626 17,582,642 2,731,548
------------ ----------- ----------- -----------
GROSS MARGIN 8,312,217 4,573,428 15,309,669 6,274,556
------------ ----------- ----------- -----------
OPERATING EXPENSE
Personnel 3,388,550 1,344,724 6,494,136 1,826,869
Sales and
Marketing 395,719 72,860 659,177 143,576
General and
administrative 2,010,553 1,798,348 3,538,882 2,336,289
Depreciation and
amortisation 166,890 201,974 358,230 220,725
Rent 329,329 - 565,487 -
----------- ----------- ----------- -----------
Total Operating
Expenses 6,291,041 3,417,906 11,615,912 4,527,459
----------- ----------- ----------- -----------
Operating Income /
(Loss) 2,021,176 1,155,522 3,693,757 1,747,097
----------- ----------- ----------- -----------
Other Income /
(Expense)
Investment Income (54,357) (40,762) (212,137) (54,967)
Foreign Exchange
Gain/(Loss) 59,838 - 54,353 -
Interest
Income/(Expense) 120,204 - 122,361 -
----------- ----------- ----------- -----------
Total Other
Income /
(Expense) 125,685 (40,762) (35,423) (54,967)
----------- ----------- ----------- -----------
Pre-Tax Income /
(Loss) 2,146,861 1,114,760 3,658,334 1,692,130
Provision for
Income Taxes 245,200 386,336 471,858 592,246
Share of Loss in
Associate Company 186,204 - 234,407 -
Dividend to
Preferred
Shareholders 389,803 - 512,609 -
----------- ----------- ----------- -----------
Net Profit
Available to
Common Shareholders 1,325,654 728,424 2,439,460 1,099,884
OTHER
COMPREHENSIVE
INCOME/(LOSS):
Foreign currency
translation
adjustments (110,041) (108,296) (115,837) (148,452)
----------- ----------- ----------- -----------
TOTAL
COMPREHENSIVE
INCOME $ 1,215,613 $ 620,128 $ 2,323,623 $ 951,432
=========== =========== =========== ===========
NET PROFIT PER
COMMON SHARE,
BASIC AND DILUTED $ 0.05 $ 0.05 $ 0.10 $ 0.08
WEIGHTED AVERAGE
SHARES OUTSTANDING 27,049,061 14,389,850 25,413,843 14,389,850
AUTO DATA NETWORK, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
As of As of
August 31, 2004 February 29, 2004
ASSETS
CURRENT ASSETS
Cash and
equivalents $ 8,375,681 $ 6,282,465
Accounts receivable 10,240,993 12,398,307
Other accounts
receivable 3,835,319 892,435
Prepayments and taxes 2,515,870 335,066
Inventories 2,345,978 2,419,465
--------------------- -----------------------
TOTAL CURRENT ASSETS 27,313,841 22,327,738
Other Receivables
more than one year 888,945 0
Fixed Assets less
accumulated
depreciation 1,547,710 2,344,988
Intangible Assets 2,511,083 1,840,895
Goodwill 40,365,983 16,942,003
Investments 10,772,593 4,716,354
--------------------- -----------------------
TOTAL ASSETS $ 83,400,155 $ 46,245,489
===================== =======================
LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 6,383,221 $ 7,025,766
Bank loans and
overdrafts 509,497 1,109,226
Accrued expenses
and sundry
accounts payable 1,406,693 659,334
Other short term
loans 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
--------------------- -----------------------
Total Current
Liabilities 13,479,849 13,135,407
LONG TERM LIABILITIES
Deferred revenue 937,600 911,470
Long term notes
payable 1,032,702 - 0 -
Other long term
liabilities 750,000 1,574,974
--------------------- -----------------------
TOTAL LIABILITIES 25,324,526 15,621,851
--------------------- -----------------------
SHAREHOLDERS' EQUITY
Common stock ($.001
par value);
authorized
50,000,000 shares;
issued and outstanding
27,830,727 27,831 21,602
Preferred stock
($.001 par value)
authorized
25,000,000 shares;
9,543,132 issued and
outstanding 9,543 2,866
Additional paid in
capital 53,164,084 28,049,231
Accumulated other
comprehensive loss (434,540) (318,703)
Retained earnings 5,308,084 2,868,619
--------------------- -----------------------
TOTAL SHAREHOLDERS'
EQUITY 58,075,629 30,623,638
--------------------- -----------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 83,400,155 $ 46,245,489
===================== =======================