Autobytel Inc. Announces First Quarter 2007 Financial Results

IRVINE, Calif.--Autobytel Inc. , a leading Internet automotive marketing services company, today announced financial results for the first quarter ended March 31, 2007.

“We are off to a solid start for the year,” said Autobytel president and CEO Jim Riesenbach. “After spending much of 2006 laying a solid foundation for the future, we now are focused on our transformation to a more media-centric business model. By offering consumers an unrivaled online experience and further establishing our role as a premier online marketing partner for auto dealers and manufacturers, we believe Autobytel will be well positioned for long-term, sustainable growth and profitability.”

First-Quarter 2007 Financial Results

Revenues for the first quarter of 2007 totaled $28.4 million, compared with $28.3 million in the prior-year period and up 6% from $26.8 million in the fourth quarter of 2006. Autobytel generated 61% of total revenues from lead fees, 17% from advertising and 22% from customer relationship management (CRM) services and other in the first quarter of 2007, compared with 64% of total revenues from lead fees, 13% from advertising and 23% from CRM services and other in the first quarter of 2006. The change in revenue mix was largely the result of a 25% increase in ad revenues from the first quarter of last year consistent with the company’s more media-centric focus. This increase was offset by a 4% decline in lead referral fees. Lead referral fees in the first quarter of 2007 included approximately $1.1 million of previously deferred revenue under a multiple element arrangement with an OEM customer.

Autobytel reported operating income for the 2007 first quarter of $3.1 million, which included a $9.9 million gain related to the recent settlement with Dealix Corporation in connection with a patent infringement lawsuit. This compares to an operating loss of $9.1 million in the first quarter of 2006 and an operating loss of $8.0 million in the 2006 fourth quarter. The improvement compared to the first quarter of 2006 is also due to the reduction in patent infringement litigation expenses and other professional fees and the recognition of deferred revenue, partially offset by a $1.0 million accrual for the tentative settlement of a previously disclosed litigation matter and increases in share based compensation and other general and administrative expenses. Non-cash share based compensation was $1.5 million and $1.3 million in the first quarters of 2007 and 2006, respectively.

Autobytel posted net income of $5.6 million, or $0.13 per diluted share, for the first quarter of 2007, including the $9.9 million gain related to the settlement with Dealix Corporation and a $2.3 million gain from the January 2007 sale of the company’s Automotive Information Center (AIC) business. This compares with a net loss of $8.5 million, or $0.20 per share, in the first quarter of 2006 and a net loss of $7.3 million, or $0.17 per share, in the fourth quarter of 2006.

Domestic and restricted international cash and equivalents, and short-term investments totaled $28.1 million at March 31, 2007, versus $26.1 million at December 31, 2006.

Autobytel said it plans to unveil its innovative consumer Internet site, MyRide.com, in June 2007. The company said it expects MyRide.com to provide consumers with the first-of-its-kind integrated vertical search experience built around the entire automotive purchase and ownership lifecycle. The site is expected to provide extensive editorial and multi-media content; the Internet’s largest base of used car listings; access to more than one million automotive parts and accessories through a relationship with a leading Internet retailer; and social networking capabilities.

“We are excited about MyRide.com and its potential to transform the automotive Internet,” Riesenbach said. “The power and robust content of MyRide.com should help us achieve our vision of becoming the leading online destination and brand that assists consumers in researching, buying and owning an automobile. The large consumer following we expect to attract to MyRide.com also should facilitate our journey toward becoming the online marketer of choice for auto dealers and manufacturers.”

“The auto industry continues to account for a large and growing percentage of marketing dollars spent online, and we are confident in our ability to capture a growing share of this opportunity,” Riesenbach continued. “With positive industry trends, a renewed focus on our core competencies and planned technology infrastructure and business process improvements, our goal of reaching profitability before the end of 2008 remains on track, and we are optimistic about our prospects for the future.”

Recent Highlights/Metrics

(in thousands, except average revenue per purchase request or finance lead, percentages and number of dealerships and customers)	1Q 2007	4Q 2006	1Q 2006
Lead fee revenue	$17,231�	$15,287�	$17,989�
CRM services revenue	$6,202�	$6,194�	$6,339�
Advertising revenue	$4,707�	$5,120�	$3,779�
Purchase requests	699�	626�	880�
Retail	65%	70%	57%
OEM & Enterprise	35%	30%	43%
Average revenue per purchase request	$20.30�	$19.92�	$17.61�
Finance leads	199�	179�	185�
Average revenue per finance lead	$15.30�	$15.68�	$13.38�
New car lead referral dealerships (approximate)	2,640�	2,630�	2,590�
Used car lead referral dealerships (approximate)	1,640�	1,640�	1,550�
Finance lead referral customers (approximate)	400�	380�	350�

About Autobytel Inc.

Autobytel is one of the largest online automotive marketplaces, empowering consumers to make smart vehicle choices using objective automotive data and insightful interactive editorial content. The result is a convenient car-buying process backed by a nationwide network of dealers who are committed to providing a positive consumer experience. Every day consumers choose Autobytel-owned and operated websites – Autobytel.com, Autoweb.com, CarSmart.com, Car.com, and CarTV.com – to facilitate their car-shopping decisions. Autobytel's ability to attract millions of highly qualified, in-market car buyers and connect them with retailers has made it a leader in facilitating the entire customer car-buying lifecycle.

The company's innovative marketing, advertising and CRM products, including its Web Control� customer management system, Retention Performance Marketing (RPM�) service reminder program, and Special Finance Leads, are designed to enable dealers to offer a premium consumer experience. Since pioneering pro-consumer online automotive content and purchasing in 1995, Autobytel has helped more than 27 million car buyers, generating billions of dollars in car sales for dealers.

(Financial tables follow)

AUTOBYTEL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
(unaudited)
		�
	March 31,	December 31,
	2007�	2006�
ASSETS
Current assets:
Domestic cash and cash equivalents	$ 28,084�	$ 22,743�
Restricted international cash and cash equivalents	-�	360�
Short-term investments	-�	3,000�
Accounts receivable, net of allowances for bad debts and customer credits of $712 and $798, respectively	16,833�	17,250�
Prepaid expenses and other current assets	4,081�	1,819�
Current assets held for sale	-�	2�
Total current assets	48,998�	45,174�
Property and equipment, net	11,977�	7,954�
Goodwill	70,697�	70,697�
Intangible assets, net	446�	674�
Other assets	4,795�	197�
Total assets	$ 136,913�	$ 124,696�
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$ 6,930�	$ 9,271�
Accrued expenses	6,504�	7,607�
Deferred revenues	1,981�	2,138�
Current liabilities held for sale	-�	393�
Other current liabilities	1,109�	1,090�
Total current liabilities	16,524�	20,499�
Deferred rent - non-current	178�	195�
Deferred revenues - non-current	8,658�	-�
Total liabilities	25,360�	20,694�
Minority interest	-�	184�
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; 43,067,954 and 42,665,840 shares issued and outstanding, respectively	43�	43�
Additional paid-in capital	292,025�	289,862�
Accumulated deficit	(180,515)	(186,087)
Total stockholders' equity	111,553�	103,818�
Total liabilities, minority interest and stockholders' equity	$ 136,913�	$ 124,696�

AUTOBYTEL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
(unaudited)
		�
	Three Months Ended
	March 31,
	2007�	2006�
		�
Revenues	$ 28,366�	$ 28,300�
Costs and expenses:
Cost of revenues	13,338�	14,743�
Sales and marketing	7,709�	7,738�
Product and technology development	4,977�	4,865�
General and administrative	8,810�	9,701�
Amortization of intangible assets	344�	357�
Patent litigation settlement	(9,899)	-�
Total costs and expenses	25,279�	37,404�
		�
Operating income (loss)	3,087�	(9,104)
Interest income	329�	471�
Foreign currency exchange (loss) gain	(6)	3�
Income (loss) from continuing operations before provision for income taxes and minority interest	3,410�	(8,630)
Provision for income taxes	(7)	-�
Minority interest	-�	(3)
Income (loss) from continuing operations	3,403�	(8,633)
Income from discontinued operations	2,169�	170�
Net income (loss)	$ 5,572�	$ (8,463)
Income (loss) per share from continuing operations:
Basic	$ 0.08�	$ (0.20)
Diluted	$ 0.08�	$ (0.20)
Net income (loss) per share:
Basic	$ 0.13�	$ (0.20)
Diluted	$ 0.13�	$ (0.20)
Shares used in:
Basic	42,879,841�	42,192,349�
Diluted	43,748,886�	42,192,349�

AUTOBYTEL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
		�
	Three Months Ended March 31,
	2007�	2006�
Cash flows from operating activities:
Net income (loss)	$ 5,572�	$ (8,463)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Non-cash charges:
Depreciation and amortization	545�	503�
Amortization of intangible assets	344�	395�
Provision for bad debt	21�	2�
Provision for customer credits	410�	524�
(Gain) loss on disposal of property and equipment	(1)	4�
Gain on sale of AIC business	(2,262)	-�
Share-based compensation	1,499�	1,290�
Minority interest	-�	3�
Foreign currency exchange loss	6�	3�
Changes in assets and liabilities:
Accounts receivable	(14)	(720)
Prepaid expenses and other current assets	366�	682�
Other assets	(134)	38�
Accounts payable	(1,660)	1,582�
Accrued expenses	(1,268)	(841)
Deferred revenues	1,091�	547�
Other liabilities	2�	119�
Net cash provided by (used in) operating activities	4,517�	(4,332)
Cash flows from investing activities:
Maturities of short-term and long-term investments	3,000�	3,000�
Distribution of foreign investment	354�	-�
Purchases of property and equipment	(5,078)	(808)
Proceeds from sale of property and equipment	1�	10�
Proceeds from sale of AIC business	2,073�	-�
Net cash provided by investing activities	350�	2,202�
Cash flows from financing activities:
Distribution to minority interest shareholder	(184)	-�
Proceeds from exercise of stock options and awards issued under the employee stock purchase plan	658�	596�
Net cash provided by financing activities	474�	596�
Net increase (decrease) in cash and cash equivalents	5,341�	(1,534)
Cash and cash equivalents, beginning of period	22,743�	33,353�
Cash and cash equivalents, end of period	$ 28,084�	$ 31,819�
		�
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes	$ 60�	$ 114�