AutoTradeCenter Sells Land-Based Operations In New Mexico, San Antonio and Oregon
16 January 2001
AutoTradeCenter Sells Land-Based Operations In New Mexico, San Antonio and Oregon
Business Editors/High-Tech & Automotive WritersSCOTTSDALE, Ariz.--Jan. 16, 2001--AutoTradeCenter (OTCBB: AUTC) has sold its interest in its land-based subsidiaries (known as Auto Network Group) located in New Mexico, San Antonio, and Oregon, to Automotive Disposition Management Services Inc. (ADM), a private Arizona corporation.
According to the terms of the agreement, AutoTradeCenter (ATC) received 16 percent of ADM stock and a reduction of $1.2 million in long-term debt. ATC will retain a strategic client partnership with ADM and assist ADM in listing, selling and purchasing vehicle inventory over the Internet.
"The proven success of our Internet remarketing programs for American Honda Finance Corp. and American Suzuki Motor Corp. typifies the higher profit making opportunities Internet remarketing of vehicles represents," stated Roger L. Butterwick, president of AutoTradeCenter.
"As financial institutions and manufacturers face staggering losses in the off-lease arena, it makes good business sense that ATC capitalize and expand on its core business, Internet B2B vehicle remarketing.
"It is our belief that the high profit margins generated by the Internet operations, plus the benefits from reduced debt, improved capital investment prospects, and lower operating costs," he continued, "will contribute to a sound, growth-oriented business plan."
"While the land-based subsidiaries generated substantial revenue, gross margins from these operations were low and insufficient to cover all of our operating expenses. These high-risk operations were not in keeping with the stable, steady growth needed for a public company to increase shareholder value," commented Michael H. Feinstein, chief financial officer for AutoTradeCenter.
"Maintaining competitive and successful land-based operations is extremely management and cash intensive," Feinstein continued. "The sale of these subsidiaries concentrates both financial and intellectual capital on ATC's business plan while providing an opportunity to improve cash flow, increase income and repay current debt."
AutoTradeCenter intends to wind down its land-based operation in Scottsdale, thereby discontinuing all land-based operations by year-end. The company expects to record a loss of approximately $650,000 from the ADM transaction, and intends to ascribe a nominal value to its 16 percent interest in ADM based on its minority ownership in a new company with limited financial information.
AutoTradeCenter.com (ATC) is the leading Internet-based "business-to-business" automotive remarketing company.
On its web site, http://www.autotradecenter.com/, the company markets its services to automobile manufacturers, captive finance companies, lease and rental companies, and financial institutions across the United States who can use the site's many features for more efficient buying, selling and trading.
ATC powers the American Honda Finance Corp.'s Vehicle Inter-Dealer Purchase System "VIPS" utilizing Internet technology and remarketing services.
For more information on AutoTradeCenter.com Inc., please visit http://www.autotradecenter.com/ or contact Public Relations at lseegan@autotradecenter.com.
Statements regarding financial matters in this press release other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995.
The company intends that such statements about the company's future expectations, including future revenues and earnings, and all other forward-looking statements be subject to the safe harbors created thereby.
Since these statements (future operational results and sales) involve risks and uncertainties and are subject to change at any time, the company's actual results may differ materially from expected results.