Revenue increases 22% to $24.8 million and net income increases 138% to $2.1 million
Updated
Jun 10, 2004 22:47:42
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0
Description: IRVINE, CA - April 22, 2004 - Leading Internet automotive marketing services company Autobytel Inc. (Nasdaq: ABTL) today announced financial results for the first quarter ended March 31, 2004. Highlights for the quarter:
Net income of $2.1 million, or $0.05 per diluted share, a 138% increase quarter over quarter Cash generation of $2.6 million and cash balance of $64.3 million at the end of Q1, excluding cash in Autobytel.Europe of $10.4 million Revenues at a record $24.8 million, highest revenues in the Company's history and 22% growth quarter over quarter Purchase Requests at 860,000, a 12% sequential increase Retail dealers added on a net basis for the third consecutive quarter "This was a terrific quarter operationally, resulting in the highest quarterly revenues in Autobytel's history," said Autobytel President and CEO Jeffrey Schwartz. "We added dealers, increased Purchase Requests, and lowered our traffic acquisition costs. The market for our products and services is expanding, and we continue to make orderly progress toward exceeding our financial objectives for the year. We continue to invest in and build the Company for the market opportunity that we feel will be substantial in the coming years." Autobytel reported net income for the first quarter ended March 31, 2004 of $2.1 million, or $0.05 per diluted share, versus $3.8 million, or $0.09 per diluted share, reported for the fourth quarter ended December 31, 2003. As previously reported by the Company, fourth quarter net income included two beneficial items totaling $1.7 million related to a decrease in the allowance for bad debts and a settlement with a former employee of Autoweb. The net income of $2.1 million in the first quarter represents a 138% increase over net income of $0.9 million, or $0.03 per diluted share, for the first quarter ended March 31, 2003. Revenues for the first quarter ended March 31, 2004 totaled $24.8 million, a 3% sequential increase over revenues of $23.9 million for the fourth quarter ended December 31, 2003, and a 22% increase over revenues of $20.3 million for the first quarter ended March 31, 2003. The Company generated $2.6 million in cash during the first quarter of 2004. The Company's cash balance, including long term marketable securities of $15.0 million, was $64.3 million as of March 31, 2004, excluding cash in Autobytel.Europe of $ 10.4 million. Highlights for the First Quarter Revenues: As the Company has previously communicated, beginning in the first quarter of 2004, revenues are being reported in the new categories of Lead Fees, Advertising, CRM Services, and Data, Applications & Other. The rationale for the new classification is to better align reported numbers and metrics with internal operations and to provide increased understanding and transparency for investors. Lead Fees represent fees that are paid by retail dealers and OEMs for the generation of new and used car sales leads. Advertising represents fees paid by marketers to advertise their products/services on Autobytel's websites. CRM Services represent fees paid by dealers and OEMs for services that help them automate the sales process and improve customer loyalty and retention marketing. Data, Applications & Other represent fees paid by dealers, OEMs and third parties for the licensing of automotive price and specification data and applications, as well as for other products. First quarter revenues were $24.8 million. During the first quarter, $16.8 million was related to Lead Fees; $3.1 million was related to Advertising; $3.5 million was related to CRM Services, and $1.3 million was related to Data, Applications & Other. For comparative purposes, under this new classification, fourth quarter 2003 revenues of $23.9 million would have been classified as $16.0 million related to Lead Fees; $3.2 million related to Advertising; $3.3 million related to CRM Services, and $1.4 million related to Data, Applications & Other. First quarter 2003 revenues of $20.3 million would have been classified as $14.6 million related to Lead Fees; $2.8 million related to Advertising; $1.5 million related to CRM Services, and $1.3 million related to Data, Applications & Other. The data is shown in tabular format in Exhibit 1. Operating Expenses: Total operating expenses, including depreciation and amortization, in the first quarter were $22.8 million. Sales and marketing expenses totaled $14.8 million, including traffic acquisition costs. Product development and technology costs totaled $5.1 million. General and administrative costs totaled $2.9 million. As previously disclosed, sales and marketing expenses in the fourth quarter benefited by $0.9 million related to a change in estimates of bad debt. Unique Visitor Count: Autobytel's four websites - Autobytel.com, Autoweb.com, Carsmart.com and AutoSite.com - received approximately 6.5 million average monthly unique visitors in the first quarter, and ranked as the most visited new car buying and research network in both February and March 2004, as reported by comScore Media Metrix. Purchase Requests: The Company delivered approximately 860,000 Purchase Requests during the first quarter of 2004, a 12% sequential increase compared to 765,000 Purchase Requests delivered in the fourth quarter of 2003.
Dealer Count: The Company reported approximately 29,400 dealer relationships in the first quarter. Included in this number are about 24,400 relationships in the Lead Fees category, of which 5,500 were retail dealer relationships and 18,900 were enterprise relationships. Additionally, about 5,000 relationships were in the CRM Services category. "We are seeing strength across our key dealer categories," continued Schwartz. "Web Control® and RPMsm brought on a net of 200 dealers, and we added a net of almost 200 dealers to our retail lead business. We are pleased that the churn rate continues to stabilize to its lowest level in two years." Advertising: Revenues from Advertising for the first quarter ended March 31, 2004 were $3.1 million, versus revenues of $3.2 million for the fourth quarter ended December 31, 2003 and revenues of $2.8 million for the first quarter ended March 31, 2003. Management continues to see advertising as a growth business moving forward. CRM: Autobytel's customer loyalty and retention program, RPMsm, ended the quarter with 452 dealers and now has 12 automotive manufacturers and major dealer groups who endorse and/or co-op the program, setting the stage for continued growth in 2004. Autobytel's lead management program Web Control® continued to enroll Mitsubishi dealers onto its program in the first quarter, with 400 dealers now activated. Headcount: The Company's headcount was 328 as of March 31, 2004 versus 333 employees as of December 31, 2003. Quality Initiatives: Closing ratios for Autobytel's retail dealers remained strong at 17%. During the quarter, Autobytel introduced another upgrade to its Quality Verification Systemsm (QVSsm), enabling dealers to respond even more quickly to consumer Purchase Requests. By accelerating QVS' seven-step validation process, the average Purchase Request delivery time has been improved by 60%, to an average of eight minutes. International: In accordance with FIN 46R, effective March 31, 2004, Autobytel.Europe is consolidated in the Company's balance sheet, which includes Autobytel.Europe's cash balance of $10.4 million. The accrued international restructuring liability of $1.9 million as of March 31, 2004 primarily represents payments to be made to Autobytel.Europe licensees under agreements entered into in March 2002 in connection with Autobytel.Europe's restructuring. Since FIN 46R was adopted on March 31, 2004, the results of operations of Autobytel.Europe will be consolidated into the Company's financial statements beginning on April 1, 2004. Autobytel's current ownership position is 49% of Autobytel.Europe. Exhibit 2 shows the balance sheet with the amounts attributable to Autobytel.Europe. Business Outlook: "We are seeing increasing growth in our business, which we expect will be enhanced by the recently announced acquisitions of iDriveonline and Stoneage. We have given 2004 guidance of between $120 million and $125 million in revenue and approximately $0.25 of earnings per share. We feel confident of achieving this, and we will provide further updates as the business continues to develop throughout the year," concluded Schwartz. Conference Call In conjunction with Autobytel Inc.'s first quarter 2004 earnings release, there will be a conference call broadcast live over the Internet today, April 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:
Autobytel Inc. CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except share and per share data) ASSETS March 31, December 31, 2004 2003 (unaudited) Current assets: Domestic cash and cash equivalents $49,270 $51,643 International cash and cash equivalents 10,425 - Short-term investments - 3,991 Accounts receivable, net of allowance for bad debts and customer credits of $2,117 and $1,764, respectively 10,597 10,889 Prepaid expenses and other current assets 1,146 833 Total current assets 71,438 67,356 Long-term investments 15,000 6,000 Property and equipment, net 2,123 2,138 Capitalized software, net 754 1,024 Investment in equity investee 824 2,810 Goodwill 16,830 16,830 Other assets 824 470 Total assets $107,793 $96,628 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $4,255 $4,063 Accrued expenses 3,590 5,034 Deferred revenues 3,814 4,022 Accrued domestic restructuring 212 258 Accrued international restructuring 1,915 - Other current liabilities 405 441 Total current liabilities 14,191 13,818 Minority interest 4,472 - 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; 38,570,537 and 37,786,767 shares issued and outstanding, respectively 39 38 Additional paid-in capital 238,962 236,544 Accumulated other comprehensive loss 1,836 - Accumulated deficit (151,707) (153,772) Total stockholders' equity 89,130 82,810 Total liabilities and stockholders' equity $107,793 $96,628 Autobytel Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Dollar amounts in thousands, except share and per share data) (unaudited) Three Months Ended March 31, 2004 2003 Revenues: Lead fees $16,847 $14,623 Advertising 3,122 2,839 CRM services 3,463 1,452 Data, applications and other 1,325 1,339 Total revenues 24,757 20,253 Operating expenses: Sales and marketing 14,809 12,858 Product and technology development 5,088 3,862 General and administrative 2,929 2,785 Total operating expenses 22,826 19,505 Income from operations 1,931 748 Interest income 186 69 Income (loss) in equity investee (53) 53 Other income 1 - Income before income taxes 2,065 870 Provision for income taxes - 2 Net income $ 2,065 $ 868 Net income per share: Basic $ 0.05 $ 0.03 Diluted $ 0.05 $ 0.03 Shares used in computing net income per share: Basic 38,343,958 31,234,243 Diluted 42,583,103 32,167,910 Autobytel Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands, except share and per share data) (unaudited) Three Months Ended March 31, 2004 2003 Cash flows from operating activities: Net income $2,065 $868 Adjustments to reconcile net income to net cash provided by operating activities: Non-cash charges: Depreciation and amortization 688 608 Provision for bad debt 77 242 Customer credits 33 851 (Income) loss in equity investee 53 (53) Changes in assets and liabilities: Accounts receivable 268 (1,289) Prepaid expenses and other current assets (284) 1,093 Other assets (399) 11 Accounts payable 87 375 Accrued expenses (1,722) (1,441) Deferred revenues (208) (47) Customer deposits - (7) Accrued domestic restructuring - current (46) (36) Other current liabilities (38) (18) Accrued domestic restructuring - non current - (32) Net cash provided by operating activities 574 1,125 Cash flows from investing activities: Maturities of short-term investments 3,991 - Purchases of long-term investments (9,000) - Consolidation of Autobytel.Europe cash balance 10,425 - Decrease in restricted cash - 28 Purchases of property and equipment (357) (31) Net cash provided by (used in) investing activities 5,059 (3) Cash flows from financing activities: Net proceeds from sale of common stock 2,419 136 Net cash provided by financing activities 2,419 136 Effect of exchange rates on cash - 27 Net increase in cash and cash equivalents 8,052 1,285 Cash and cash equivalents, beginning of period 51,643 27,543 Cash and cash equivalents, end of period $59,695 $28,828 Supplemental disclosure of cash flow information: Cash paid during the period for income taxes $- $2 Cash refunded during the period for interest $(1) $- EXHIBIT 1 Autobytel Inc. REPORTED REVENUE UNDER NEW CLASSIFICATIONS (Dollar amounts in thousands) (unaudited) Three Months Ended 03/31/03 06/30/03 09/30/03 12/31/03 03/31/04 Lead fees $14,623 $15,508 $15,672 $15,986 $16,847 Advertising 2,839 3,024 2,787 3,169 3,122 CRM services 1,452 2,068 3,129 3,333 3,463 Data, applications and other 1,339 1,121 1,451 1,442 1,325 Total revenues $20,253 $21,721 $23,039 $23,930 $24,757 EXHIBIT 2 Autobytel Inc. CONSOLIDATING BALANCE SHEET As of March 31, 2004 (Dollar amounts in thousands, except share and per share data) (unaudited) Autobytel Elimi- Consolidated ASSETS Autobytel .Europe nation Autobytel Current assets: Domestic cash and cash equivalents $49,270 $- $- $49,270 International cash and cash equivalents - 10,425 - 10,425 Short-term investments - - - - Accounts receivable, net of allowance for bad debts and customer credits of $2,117 10,511 86 - 10,597 Prepaid expenses and other current assets 1,117 29 - 1,146 Total current assets 60,898 10,540 - 71,438 Long-term investments 15,000 - - 15,000 Property and equipment, net 2,122 1 - 2,123 Capitalized software, net 754 - - 754 Investment in equity investee 2,757 824 (2,757) 824 Goodwill 16,830 - - 16,830 Other assets 824 - - 824 Total assets $99,185 $11,365 $(2,757) $107,793 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $4,150 $105 $- $4,255 Accrued expenses 3,312 278 - 3,590 Deferred revenues 3,814 - - 3,814 Accrued domestic restructuring 212 - - 212 Accrued international restructuring - 1,915 - 1,915 Other current liabilities 403 2 - 405 Total current liabilities 11,891 2,300 - 14,191 Minority interest - - 4,472 4,472 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; 38,570,537 shares issued and outstanding 39 18 (18) 39 Additional paid-in capital 238,962 20,338 (20,338) 238,962 Accumulated other comprehensive loss - 3,746 (1,910) 1,836 Accumulated deficit (151,707) (15,037) 15,037 (151,707) Total stockholders' equity 87,294 9,065 (7,229) 89,130 Total liabilities and stockholders' equity $99,185 $11,365 $(2,757) $107,793
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