Attached files
| file | filename |
|---|---|
| EX-99.2 - TRANSCRIPT OF AUTOBYTEL INC.'S CONFERENCE CALL DATED NOVEMBER 3, 2016 AND CONFERENCE CALL PRESENTATION SLIDES - AutoWeb, Inc. | ex99-2000.htm |
| 8-K - FROM 8-K - AutoWeb, Inc. | abtl8k_nov32016.htm |
EXHIBIT
99.1
Autobytel
Reports Third Quarter 2016 Results
Total Revenues up 9% to $43.9 Million; Net Income up 70% to $2.7
Million or $0.21 per Diluted Share
IRVINE, Calif. – November 3, 2016
– Autobytel Inc. (NASDAQ:ABTL), a pioneer and leading
provider of digital automotive services connecting in-market car
buyers with dealers and OEMs, reported financial results for the
third quarter ended September 30, 2016.
Third
Quarter 2016 Financial Highlights vs. Year-Ago Quarter
●
Total revenues
increased 9% to a Q3 record $43.9 million
●
Advertising
revenues increased 130% to $7.4 million, with click revenues up
282% to $5.5 million
●
Net income
increased 70% to $2.7 million or $0.21 per diluted
share
●
Non-GAAP income
increased 26% to $6.5 million or $0.49 per diluted
share
Management
Commentary
“The third
quarter was highlighted by the strong momentum of our
advertising-related click product, which has continued to exceed
our expectations since acquiring AutoWeb last year,” said
Jeff Coats, president and CEO of Autobytel. “At the end of
the quarter, we launched the beta version of our new lead-enhanced
product solution on AutoWeb.com.
Initial customer feedback is positive so we intend to continue to
develop similar new products that we believe will ultimately help
our customers sell more cars, while making the path to purchase
easier and more enjoyable for consumers.
“We also
launched a new beta version of our usedcars.com
site. This revamped website is now fully-responsive and
mobile-friendly. We are extremely excited about the strength of
the usedcars.com
domain and will continue to invest in usedcars.com
in an effort to make it ‘The’ premier used vehicle
destination for consumers.
“As we close
out another strong year and look ahead to 2017, we plan to increase
investments in our key high-growth areas to further accelerate the
top line, which we expect will also enhance long-term
profitability. Therefore, we are increasing our 2016 revenue
guidance, while paring the bottom line to fund these high-growth
initiatives. Although we expect to realize some benefit in 2016, we
plan to capitalize on these exciting investments next year to drive
greater organic revenue growth and profitability. Be it through new
or used car leads, clicks, or one of our many value-added product
offerings, we remain committed to helping our dealer and OEM
customers sell more cars and trucks.”
Third
Quarter 2016 Financial Results
Total
revenues in the third quarter of 2016 increased 9% to a Q3 record
$43.9 million compared to $40.2 million in the year-ago quarter.
The increase was primarily driven by the acquisition of AutoWeb, as
well as the expansion of most OEM programs. Revenues generated from
automotive leads and services were $34.9 million compared to $35.2
million one year ago. Retail revenues were $13.8 million compared
to $15.3 million last year, and wholesale revenues increased 6% to
$21.1 million compared to $20.0 million.
The
expected decline in retail revenues was driven by the transition of
190 retail dealers into one comprehensive OEM program in the second
quarter of 2016. This transition has proven to be a success as
overall revenues for the program have increased 25%. Additionally,
over the last 12 months the company has systematically reduced
lower-quality lead supply, which in the short term has impacted
both retail and OEM/wholesale revenue. However, longer term, the
company is seeing very positive results. Early indicators such as
three and six month retention are both up nicely in the most recent
periods.
Advertising
revenues increased 130% to $7.4 million compared to $3.2 million in
the year-ago quarter. The increase was due to growth in display and
other advertising, as well as a significant increase in click
revenue. The increase in click revenue was driven by growth and
continued investment in the company’s AutoWeb products.
Sequentially, click revenue increased 50% compared to the second
quarter of 2016.
Gross
profit in the third quarter increased 3% to $15.8 million compared
to $15.3 million in the year-ago quarter. As expected, gross margin
decreased to 35.9% compared to 38.1% one year ago due to an
increase in traffic acquisition costs, as well as an increase in
amortization of intangible assets associated with the acquisition
of AutoWeb. The company expects gross margin to continue in the
mid-30% range over the next several quarters, as Autobytel invests
in its core products to grow revenues and
profitability.
Total
operating expenses in the third quarter were $11.5 million compared
to $12.0 million in the year-ago quarter. As a percentage of
revenues, total operating expenses were 26.2% compared to 29.8% in
the third quarter of 2015. The decrease was largely attributable to
non-recurring, transaction-related expenses in 2015, as well as
cost savings from the company’s IT development migration,
which was initiated during the first quarter of 2016 and is
representative of the company’s commitment to optimizing the
business.
Net
income in the third quarter of 2016 increased 70% to $2.7 million
or $0.21 per diluted share, compared to $1.6 million or $0.14 per
diluted share in the year-ago quarter.
Non-GAAP income
increased 26% to $6.5 million or $0.49 per diluted share, compared
to $5.2 million or $0.45 per diluted share in the third quarter of
2015 (see "Note about Non-GAAP Financial Measures" below for
further discussion).
At
September 30, 2016, cash and cash equivalents increased 36% to
$32.7 million compared to $24.0 million at December 31, 2015. Total
debt was reduced to $23.1 million compared to $27.0 million at
December 31, 2015.
Business
Outlook
Autobytel now
expects 2016 revenue to range between $153 million and $155
million, representing an increase of approximately 15% to 16% from
2015. The company also expects its 2016 non-GAAP income to range
between $16.5 million and $16.9 million, representing an increase
of approximately 7% to 10% from 2015, with non-GAAP diluted EPS
ranging between $1.23 and $1.26 (previously $1.39 to $1.43)
compared to $1.22 in 2015. The reduction in the company’s
2016 outlook for non-GAAP income and diluted EPS is a result of the
aforementioned increase of investments in the company’s key
high-growth areas, which Autobytel expects will further accelerate
revenue and profitability in 2017.
The
company has not provided a reconciliation of its 2016 non-GAAP
income or non-GAAP diluted EPS guidance to the most directly
comparable GAAP financial measures because the effect, timing and
potential significance of the effects of tax considerations,
primarily related to the company’s net operating loss
carryforwards, are out of the company's control and/or cannot be
reasonably predicted. Consequently, reconciliations to the
corresponding GAAP financial measures are not available without
unreasonable effort.
Conference
Call
Autobytel will hold
a conference call today at 5:00 p.m. Eastern time to discuss its
third quarter 2016 results, followed by a question-and-answer
session.
Date:
Thursday, November 3, 2016
Time:
5:00 p.m. Eastern time (2:00 p.m. Pacific time)
Toll-free dial-in
number: 1-877-852-2929
International
dial-in number: 1-404-991-3925
Conference ID:
93691416
During
the call, Autobytel management will refer to a supplementary slide
presentation, which will be available for download in the Investor
Relations section of the company's website.
The
conference call will also be broadcast live at www.autobytel.com (click
on "Investor Relations" and then click on "Events &
Presentations"). Please visit the website at least 15 minutes prior
to the start of the call to register and download any necessary
software. For those who will be joining the call by phone, please
call the conference telephone number 5-10 minutes prior to
the start time, and an operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Liolios Group at
1-949-574-3860.
A
replay of the conference call will be available after 8:00 p.m. Eastern time on the same day
through November 10, 2016. The call will also be archived in the
Investor Relations section of Autobytel's website for one
year.
Toll-free replay
number: 1-855-859-2056
International
replay number: 1-404-537-3406
Replay ID: 93691416
Tax Benefit Preservation Plan
At December 31, 2015, the company had
approximately $88.2 million in available net operating loss
carryforwards ("NOLs") for U.S. federal income tax purposes. The
company's Tax Benefit Preservation Plan ("Plan") was adopted by the company's Board of
Directors to preserve the company's NOLs and other tax attributes
and thus reduce the risk of a possible change of ownership under
Section 382 of the Internal Revenue Code. Any such change of
ownership under Section 382 would limit or eliminate the ability of
the company to use its existing NOLs for federal income tax
purposes. Rights issued under the Plan could be triggered upon the
acquisition by any person or group of 4.9% or more of the company's
outstanding common stock and could result in substantial dilution
of the acquirer's percentage ownership in the company. As of
October 31, 2016, there were 10,962,330 shares of the
company’s common stock, $0.001 par value, outstanding. There
is no guarantee that the Plan will achieve the objective of
preserving the value of the company's NOLs. For more information,
please visit http://investor.autobytel.com/tax.cfm.
About
Autobytel Inc.
Autobytel Inc.
provides high quality consumer leads and associated marketing
services to automotive dealers and manufacturers throughout the
United States. The company also provides consumers with robust and
original online automotive content to help them make informed
car-buying decisions. The company pioneered the automotive Internet
in 1995 with its flagship website www.autobytel.com and
has since helped tens of millions of automotive consumers research
vehicles; connected thousands of dealers nationwide with motivated
car buyers; and has helped every major automaker market its brand
online.
Investors and other
interested parties can receive Autobytel news alerts and special
event invitations by accessing the online registration form at
investor.autobytel.com/alerts.cfm.
Note
about Non-GAAP Financial Measures
In this
press release, Autobytel has disclosed non-GAAP income and non-GAAP
EPS, which are non-GAAP financial measures as defined by SEC
Regulation G, for the 2016 and 2015 third quarter. The company
defines (i) non-GAAP income as GAAP net income before amortization
of acquired intangibles, non-cash stock-based compensation,
acquisition costs, severance costs, gain on investment, litigation
settlements and income taxes; and (ii) non-GAAP EPS as non-GAAP
income divided by weighted average diluted shares outstanding. The
company's management believes that presenting non-GAAP income and
non-GAAP EPS provides useful information to investors regarding the
underlying business trends and performance of the company's ongoing
operations and are better metrics for monitoring the company's
performance given the effects of the company's NOLs, acquisitions
and non-cash stock based compensation. These non-GAAP financial
measures are used in addition to and in conjunction with results
presented in accordance with GAAP and should not be relied upon to
the exclusion of GAAP financial measures. Management strongly
encourages investors to review the company's consolidated financial
statements in their entirety and to not rely on any single
financial measure. A table providing a reconciliation of non-GAAP
income and non-GAAP EPS is included at the end of this press
release.
Forward-Looking
Statements Disclaimer
The
statements contained in this press release that are not historical
facts are forward-looking statements under the federal securities
laws. Words such as
“anticipates,” “could,” “may,”
“estimates,” “expects,”
“projects,” “intends,” pending,”
“plans,” “believes,” “will” and
words of similar substance, or the negative of those words, used in
connection with any discussion of future operations or financial
performance identify forward-looking statements. In particular,
statements regarding expectations and opportunities, new product
expectations and capabilities, and our outlook regarding our
performance and growth are forward-looking statements. These
forward-looking statements, including, that (i) the company intends
to continue to develop products similar to its new
lead-enhanced product solution on AutoWeb.com
that the company believes will ultimately help its customers sell
more cars, while making the path to purchase easier and more
enjoyable for consumers.; (ii) the company will continue to invest
in usedcars.com
in an effort to make it ‘The’ premier used vehicle
destination for consumers; (iii) the
company plans to increase investments in its key high-growth
areas to further accelerate the company’s top line, which we
expect will also enhance long-term profitability; (iv) the company
expects to realize some benefit in 2016 from its investments in key
high-growth areas and plans to capitalize on these exciting
investments in 2017 to drive greater organic revenue growth and
profitability; (v) the company expects gross margin to continue in
the mid-30% range over the next several quarters, as it invests in
its core products to grow revenues and profitability; (v) the
company expects its 2016 revenue to range between $153 million and
$155 million, representing an increase of approximately 15% to 16%
from 2015; (vii) the company expects its 2016 non-GAAP income to
range between $16.5 million and $16.9 million, representing an
increase of approximately 7% to 10% from 2015; and (viii) the
company expects its 2016 non-GAAP diluted EPS to range between
$1.23 and $1.26 (previously $1.39 to $1.43), which compares to
$1.22 in 2015, are not guarantees of future performance and involve
assumptions and risks and uncertainties that are difficult to
predict. Actual outcomes and results may differ materially from
what is expressed in, or implied by, these forward-looking
statements. Autobytel undertakes no obligation to update publicly
any forward-looking statements, whether as a result of new
information, future events or otherwise. Among the important
factors that could cause actual results to differ materially from
those expressed in, or implied by, the forward- looking statements
are changes in general economic conditions; the financial condition
of automobile manufacturers and dealers; disruptions in automobile
production; changes in fuel prices; the economic impact of
terrorist attacks, political revolutions or military actions;
failure of our internet security measures; dealer attrition;
pressure on dealer fees; increased or unexpected competition; the
failure of new products and services to meet expectations; failure
to retain key employees or attract and integrate new employees;
actual costs and expenses exceeding charges taken by Autobytel;
changes in laws and regulations; costs of legal matters, including,
defending lawsuits and undertaking investigations and related
matters; and other matters disclosed in Autobytel's filings with
the Securities and Exchange Commission. Investors are strongly
encouraged to review the company's Annual Report on Form 10-K for
the year ended December 31, 2015 and other filings with the
Securities and Exchange Commission for a discussion of risks and
uncertainties that could affect the business, operating results or
financial condition of Autobytel and the market price of the
company's stock.
AUTOBYTEL INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in thousands, except share and per-share
data)
|
|
September 30,
|
December 31,
|
|
|
2016
|
2015
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$32,729
|
$23,993
|
|
Accounts
receivable (net of allowances for bad debts and customer credits of
$894 and $1,045 at September 30, 2016 and December 31, 2015,
respectively)
|
32,127
|
28,091
|
|
Deferred
tax asset
|
3,089
|
3,642
|
|
Prepaid
expenses and other current assets
|
1,094
|
1,276
|
|
Total
current assets
|
69,039
|
57,002
|
|
Property
and equipment, net
|
5,019
|
4,296
|
|
Investments
|
680
|
680
|
|
Intangible
assets, net
|
25,171
|
29,515
|
|
Goodwill
|
42,821
|
42,903
|
|
Long-term
deferred tax asset
|
17,820
|
17,820
|
|
Other
assets
|
1,591
|
1,372
|
|
Total
assets
|
$162,141
|
$153,588
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$11,390
|
$7,643
|
|
Accrued
expenses and other current liabilities
|
10,933
|
10,744
|
|
Current
portion of term loan payable
|
5,250
|
5,250
|
|
Total
current liabilities
|
27,573
|
23,637
|
|
Convertible
note payable
|
1,000
|
1,000
|
|
Long-term
portion of term loan payable
|
8,812
|
12,750
|
|
Borrowings
under revolving credit facility
|
8,000
|
8,000
|
|
Total
liabilities
|
45,385
|
45,387
|
|
|
|
|
|
Commitments
and contingencies
|
-
|
-
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred
stock, $0.001 par value; 11,445,187 shares authorized
|
|
|
|
Series
A Preferred stock, none issued and outstanding
|
-
|
-
|
|
Series
B Preferred stock, 168,007 shares issued and
outstanding
|
-
|
-
|
|
Common
stock, $0.001 par value; 55,000,000 shares authorized; 10,932,050
and 10,626,624 shares issued and outstanding, as of September 30,
2016 and December 31, 2015, respectively
|
11
|
11
|
|
Additional
paid-in capital
|
348,547
|
342,485
|
|
Accumulated
deficit
|
(231,802)
|
(234,295)
|
|
Total
stockholders' equity
|
116,756
|
108,201
|
|
Total
liabilities and stockholders' equity
|
$162,141
|
$153,588
|
AUTOBYTEL
INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
(Amounts in thousands, except per-share data)
|
|
Three Months Ended
|
Nine Months Ended
|
||
|
|
September 30,
|
September 30,
|
||
|
|
|
|
|
|
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Lead
fees
|
$36,202
|
$36,459
|
$98,706
|
$88,480
|
|
Advertising
|
7,371
|
3,211
|
16,412
|
6,846
|
|
Other
revenues
|
338
|
505
|
1,188
|
1,479
|
|
Total
revenues
|
43,911
|
40,175
|
116,306
|
96,805
|
|
Cost
of revenues
|
28,156
|
24,878
|
72,995
|
59,639
|
|
Gross
profit
|
15,755
|
15,297
|
43,311
|
37,166
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Sales
and marketing
|
3,964
|
4,109
|
14,026
|
11,430
|
|
Technology
support
|
2,943
|
3,574
|
10,775
|
7,952
|
|
General
and administrative
|
3,346
|
3,600
|
10,405
|
9,854
|
|
Depreciation
and amortization
|
1,270
|
720
|
3,809
|
1,808
|
|
Litigation
settlements
|
(24)
|
(25)
|
(25)
|
(75)
|
|
Total
operating expenses
|
11,499
|
11,978
|
38,990
|
30,969
|
|
Operating
income
|
4,256
|
3,319
|
4,321
|
6,197
|
|
Interest
and other income (expense), net
|
(206)
|
(216)
|
(643)
|
(546)
|
|
Income
tax provision
|
1,312
|
1,488
|
1,185
|
2,391
|
|
Net
income and comprehensive income
|
$2,738
|
$1,615
|
$2,493
|
$3,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per common share
|
$0.26
|
$0.16
|
$0.23
|
$0.33
|
|
Diluted
earnings per common share
|
$0.21
|
$0.14
|
$0.19
|
$0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
used in computing earnings per common share (in
thousands):
|
|
|
|
|
|
Basic
|
10,726
|
10,375
|
10,610
|
9,732
|
|
Diluted
|
13,337
|
11,540
|
13,170
|
10,718
|
|
|
|
|
|
|
AUTOBYTEL
INC.
RECONCILIATION
OF NON-GAAP INCOME / EPS
(Amounts
in thousands, except per-share data)
|
|
Three Months Ended
|
Three Months Ended
|
Three Months Ended
|
Nine Months Ended
|
||||
|
|
March 31,
|
June 30,
|
September 30,
|
September 30,
|
||||
|
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$(676)
|
$773
|
$430
|
$871
|
$2,738
|
$1,615
|
$2,493
|
$3,260
|
|
Amortization
of acquired intangibles
|
1,426
|
376
|
1,403
|
512
|
1,509
|
667
|
4,338
|
1,556
|
|
Non-cash
stock based compensation
|
|
|
|
|
|
|
|
|
|
Cost
of revenues
|
14
|
25
|
15
|
38
|
19
|
43
|
48
|
106
|
|
Sales
and marketing
|
633
|
140
|
341
|
146
|
384
|
153
|
1,358
|
439
|
|
Technology
support
|
329
|
71
|
92
|
151
|
77
|
201
|
499
|
422
|
|
General
and administrative
|
388
|
417
|
418
|
217
|
460
|
287
|
1,266
|
922
|
|
Total
non-cash stock-based compensation
|
1,364
|
653
|
866
|
552
|
940
|
684
|
3,171
|
1,889
|
|
Acquisition
costs
|
429
|
-
|
148
|
925
|
-
|
726
|
577
|
1,652
|
|
Severance
costs
|
839
|
330
|
-
|
-
|
-
|
-
|
839
|
330
|
|
Litigation
settlements
|
(5)
|
(25)
|
4
|
(25)
|
(24)
|
(25)
|
(25)
|
(75)
|
|
Income
taxes
|
(432)
|
257
|
305
|
647
|
1,312
|
1,488
|
1,185
|
2,391
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
income
|
$2,945
|
$2,364
|
$3,156
|
$3,482
|
$6,475
|
$5,155
|
$12,578
|
$11,003
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares
|
13,346
|
11,097
|
13,295
|
11,057
|
13,337
|
11,540
|
13,170
|
10,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
GAAP EPS
|
$(0.06)
|
$0.07
|
$0.03
|
$0.08
|
$0.21
|
$0.14
|
$0.19
|
$0.30
|
|
EPS
impact of adjustments
|
0.27
|
0.14
|
0.21
|
0.24
|
0.28
|
0.31
|
0.77
|
0.72
|
|
Non-GAAP
EPS
|
$0.22
|
$0.21
|
$0.24
|
$0.31
|
$0.49
|
$0.45
|
$0.96
|
$1.03
|
Company
Contact
Kimberly
Boren
Chief
Financial Officer
949-862-1396
kimb@autobytel.com
Investor
Relations
Liolios
Cody
Slach or Sean Mansouri
949-574-3860
ABTL@liolios.com
Source:
Autobytel Inc.