Attached files
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EX-99.2 - EXHIBIT 99.2 - AutoWeb, Inc. | ex99-2.htm |
8-K - FORM 8-K - AutoWeb, Inc. | abtl8k_mar92017.htm |
Exhibit
99.1
Autobytel
Reports Record Fourth Quarter and Full Year 2016
Results
Q4 Revenues up 11% to a Record $40.4 Million, Driven by a 219%
Increase in Click Revenues
IRVINE, Calif. – March 9, 2017
– 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
fourth quarter and full year ended December 31, 2016.
Fourth
Quarter 2016 Financial Summary vs. Year-Ago Quarter
●
Total revenues
increased 11% to a Q4 record $40.4 million.
●
Advertising
revenues increased 119% to $8.1 million, with click revenues up
219% to $6.4 million.
●
Net income was $1.4
million or $0.10 per diluted share, compared to $1.4 million or
$0.10 per diluted share.
●
Non-GAAP income
increased 7% to $4.7 million or $0.35 per diluted
share.
Full
Year 2016 Financial Summary vs. 2015
●
Total revenues
increased 18% to a record $156.7 million.
●
Advertising
revenues increased 133% to $24.5 million, with click revenues up
308% to $18.2 million.
●
Net income was $3.9
million or $0.29 per diluted share, compared to $4.6 million or
$0.37 per diluted share.
●
Non-GAAP income
increased 12% to $17.3 million or $1.30 per diluted
share.
Management
Commentary
“We generated
record revenues in 2016 while maintaining our commitment to
high-quality products for our dealer and OEM customers,” said
Jeff Coats, president and CEO of Autobytel. “2016 also
represented a year of integration, execution and investment as we
rolled out the new usedcars.com site and completed the integration
of the Dealix and AutoWeb acquisitions from 2015. Each of these
acquisitions brought us important strategic assets, particularly
AutoWeb, which dramatically strengthened our technology leadership
in the automotive digital landscape.
“At the end
of the fourth quarter, we divested our specialty finance leads
product, which enables us to further dedicate time and resources to
our core vehicle leads and fast-growing click products for both new
and used vehicles. Our advertising-related click product from
AutoWeb continues to exceed our expectations, with revenues growing
more than 300% in 2016. We continue to be methodical in our rollout
of this product, having only introduced it to a small number of our
dealer and OEM customers thus far. We also experienced
approximately 98% customer retention with the product in 2016,
further validating its exceptional quality of high-intent consumer
traffic.
“Given the
strong momentum of our click products, we will continue to invest
in new traffic sources to determine the channels that provide the
highest quality, in-market consumers. We believe this will
ultimately maximize the growth potential of our click products as
we make it available to many more of our thousands of dealer and
OEM customers during 2017 and beyond. Regardless of the channel or
product, we will continue to help our customers sell more new and
used cars, while making the path to purchase easier and more
enjoyable for consumers.”
Fourth
Quarter 2016 Financial Results
Total
revenues in the fourth quarter of 2016 increased 11% to a Q4 record
$40.4 million compared to $36.4 million in the year-ago quarter.
The increase was primarily driven by an increase in advertising
click revenues, as well as growth in wholesale lead revenues.
Revenues generated from automotive leads and services were
relatively flat at $30.8 million compared to $31.1 million one year
ago, despite the reduction in volume from thousands of lower
quality leads which were eliminated over the course of 2016 and
replaced primarily by additional investment in generating increased
volume of higher quality, internally-generated leads.
Advertising
revenues increased 119% to $8.1 million compared to $3.7 million in
the year-ago quarter. The increase was due to a significant
increase in click revenue driven by growth and continued investment
in the company’s AutoWeb products. Even with seasonal
headwinds, click revenue increased 16% compared to the third
quarter of 2016.
Gross
profit in the fourth quarter increased to $14.6 million compared to
$14.5 million in the year-ago quarter. In line with the
company’s expectations, gross margin was 36.2% compared to
39.7% one year ago due primarily to an increase in traffic
acquisition costs. The company expects gross margin to continue in
the mid-30% range over the next several quarters as it focuses on
increased traffic and technology development and the optimization
of traffic acquisition costs. However, the company does expect to
generate growth of incremental gross profit dollars in
2017.
Total
operating expenses in the fourth quarter were $12.8 million,
roughly flat when compared to the prior-year. As a percentage of
revenues, total operating expenses were 31.7% compared to 35.5% in
the fourth quarter of 2015, with the improvement driven by
considerable operating leverage.
Net
income in the fourth quarter of 2016 was $1.4 million or $0.10 per
diluted share, essentially unchanged compared to the year-ago
quarter.
Non-GAAP income
increased 7% to $4.7 million or $0.35 per diluted share, compared
to $4.4 million or $0.33 per diluted share in the fourth quarter of
2015 (see "Note about Non-GAAP Financial Measures" below for
further discussion).
At
December 31, 2016, cash and cash equivalents increased 61% to $38.5
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.
Full
Year 2016 Financial Results
Total
revenues in 2016 increased 18% to a record $156.7 million compared
to $133.2 million in 2015. Revenues generated from automotive leads
and services increased 8% to $125.8 million compared to $116.2
million in 2015. Retail revenues increased to $53.6 million
compared to $53.5 million in 2015, and wholesale revenues increased
15% to $72.2 million compared to $62.6 million.
Advertising
revenues increased 133% to $24.5 million compared to $10.5 million
in 2015, with click revenues up 308% to $18.2 million compared to
$4.5 million in 2015.
Gross
profit in 2016 increased 12% to $57.9 million compared to $51.6
million in 2015. As a percentage of revenues, gross profit was
37.0% compared to 38.8%.
Total
operating expenses in 2016 were $51.8 million compared to $43.9
million in 2015. As a percentage of revenues, total operating
expenses were 33.1% compared to 32.9%.
Net
income in 2016 was $3.9 million or $0.29 per diluted share,
compared to $4.6 million or $0.37 per diluted share in
2015.
Non-GAAP income
increased 12% to $17.3 million or $1.30 per diluted share, compared
to $15.4 million or $1.22 per diluted share in 2015.
2017
Business Outlook
Autobytel expects
revenue to range between $156.0 million and $160.0 million,
representing an increase of approximately 4% to 7% from 2016. The
company also expects non-GAAP income to range between $16.8 million
and $17.3 million, representing an increase of up to approximately
3% from 2016, with non-GAAP diluted EPS ranging between $1.24 and
$1.28 on 13.5 million shares. Note that for comparative purposes,
the foregoing percentage growth calculations, and the 2016 non-GAAP
diluted EPS, exclude 2016 revenues, non-GAAP income and non-GAAP
EPS related to the company’s specialty finance leads product
that was divested on December 31, 2016.
The
company has not provided a reconciliation of its 2017 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
fourth quarter and full year 2016 results, followed by a
question-and-answer session.
Date:
Thursday, March 9, 2017
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:
77540425
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 March 17, 2017. 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: 77540425
Tax Benefit Preservation Plan
At December 31, 2016, the company had
approximately $75.8 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 March
6, 2017, there were 11,021,490 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, clicks 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 fourth 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 or loss on investment or
sale, litigation settlements and income taxes; and (ii) non-GAAP
EPS as non-GAAP income divided by weighted average diluted shares
outstanding. Note that for comparative purposes, the percentage
growth calculations, and the 2016 non-GAAP diluted EPS, included
above under the heading “2017 Business Outlook” exclude
2016 revenues, non-GAAP income and non-GAAP EPS related to the
company’s specialty finance leads product that was divested
on December 31, 2016. The company's management believes that
presenting non-GAAP income and non-GAAP EPS, and the exclusion of
the 2016 revenues, non-GAAP income and non-GAAP EPS related to the
company’s specialty finance leads product from the
forward-looking guidance provided above, 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 and the divestiture of the specialty finance leads
product. 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. Tables providing
reconciliations of non-GAAP income and non-GAAP EPS to the most directly comparable financial measure or
measures 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)
given the strong momentum of our click products, the company
will continue to invest in new traffic sources to determine the
channels that provide the highest quality, in-market consumers;
(ii) the company believes this investment in new traffic sources
will ultimately maximize the growth potential of its click products
as the company makes it available to many more of its thousands of
dealer and OEM customers during 2017 and beyond; (iii) regardless
of the channel or product, the company will continue to help its
customers sell more new and used cars, while making the path to
purchase easier and more enjoyable for consumers; (iv) the company
expects gross margin to continue in the mid-30% range over the next
several quarters as it focuses on increased traffic and technology
development and the optimization of traffic acquisition costs; (v)
the company does expect to generate growth of incremental gross
profit dollars in 2017 (vi) the company expects its 2017 revenue to
range between $156.0 million and $160.0 million, representing an
increase of approximately 4% to 7% from 2016; (vii) the company
expects its 2016 non-GAAP income to range between $16.8 million and
$17.3 million, representing an increase of up to approximately 3%
from 2016; and (viii) the company expects its 2017 non-GAAP diluted
EPS to range between $1.24 and $1.28 on 13.5 million shares (noting
that for comparative purposes, the foregoing percentage
growth calculations, and the 2016 non-GAAP diluted EPS, exclude
2016 revenues, non-GAAP income and non-GAAP EPS related to
the company’s specialty finance leads product that was
divested on December 31, 2016), 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, 2016 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)
|
|
December 31,
|
December 31,
|
|
2016
|
2015
|
Assets
|
|
|
Current assets:
|
|
|
Cash and cash equivalents
|
$38,512
|
$23,993
|
Short-term investment
|
251
|
-
|
Accounts receivable (net of allowances for bad debts and
customer
credits of $1,015 and $1,045 at December 31, 2016 and
December 31,
2015, respectively)
|
33,634
|
28,091
|
Deferred tax asset
|
4,669
|
3,642
|
Prepaid expenses and other current assets
|
901
|
1,276
|
Total current assets
|
77,967
|
57,002
|
Property and equipment, net
|
4,430
|
4,296
|
Investments
|
680
|
680
|
Intangible assets, net
|
23,783
|
29,515
|
Goodwill
|
42,821
|
42,903
|
Long-term deferred tax asset
|
14,799
|
17,820
|
Other assets
|
801
|
1,372
|
Total assets
|
$165,281
|
$153,588
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
Current liabilities:
|
|
|
Accounts payable
|
$9,764
|
$7,643
|
Accrued employee-related benefits
|
4,530
|
3,945
|
Other accrued expenses and other current liabilities
|
8,315
|
6,799
|
Current portion of term loan payable
|
6,563
|
5,250
|
Total current liabilities
|
29,172
|
23,637
|
Convertible note payable
|
1,000
|
1,000
|
Long-term portion of term loan payable
|
7,500
|
12,750
|
Borrowings under revolving credit facility
|
8,000
|
8,000
|
Total liabilities
|
45,672
|
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;
11,012,625 and 10,626,624 shares issued and outstanding, as
of
December 31, 2016 and December 31, 2015,
respectively
|
11
|
11
|
Additional paid-in capital
|
350,022
|
342,485
|
Accumulated deficit
|
(230,424)
|
(234,295)
|
Total stockholders' equity
|
119,609
|
108,201
|
Total liabilities and stockholders' equity
|
$165,281
|
$153,588
|
AUTOBYTEL INC.
|
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
|
(Amounts in thousands, except per-share data)
|
|
|
|
|
|
|
Three Months Ended
|
Twelve Months Ended
|
||
|
December 31,
|
December 31,
|
||
|
|
|
|
|
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
Revenues:
|
|
|
|
|
Lead fees
|
$31,978
|
$32,198
|
$130,684
|
$120,678
|
Advertising
|
8,095
|
3,688
|
24,508
|
10,534
|
Other revenues
|
305
|
535
|
1,492
|
2,014
|
Total
revenues
|
40,378
|
36,421
|
156,684
|
133,226
|
Cost
of revenues
|
25,777
|
21,947
|
98,771
|
81,586
|
Gross
profit
|
14,601
|
14,474
|
57,913
|
51,640
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
Sales and marketing
|
4,092
|
4,527
|
18,118
|
15,956
|
Technology support
|
3,211
|
3,788
|
13,986
|
11,740
|
General and administrative
|
4,257
|
3,335
|
14,663
|
13,189
|
Depreciation and amortization
|
1,259
|
1,298
|
5,068
|
3,106
|
Litigation settlements
|
(25)
|
(33)
|
(50)
|
(108)
|
Total operating expenses
|
12,794
|
12,915
|
51,785
|
43,883
|
Operating
income
|
1,807
|
1,559
|
6,128
|
7,757
|
Interest and other income (expense), net
|
1,202
|
868
|
558
|
322
|
Income
before income tax provision
|
3,009
|
2,427
|
6,686
|
8,079
|
Income tax provision
|
1,631
|
1,041
|
2,815
|
3,433
|
Net
income and comprehensive income
|
$1,378
|
$1,386
|
$3,871
|
$4,646
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per common share
|
$0.13
|
$0.13
|
$0.36
|
$0.47
|
Diluted
earnings per common share
|
$0.10
|
$0.10
|
$0.29
|
$0.37
|
|
|
|
|
|
|
|
|
|
|
Shares
used in computing earnings per common share (in
thousands):
|
|
|
|
|
Basic
|
10,862
|
10,427
|
10,673
|
9,907
|
Diluted
|
13,369
|
13,397
|
13,303
|
12,662
|
AUTOBYTEL INC.
|
||||||||||||||
RECONCILIATION OF NON-GAAP INCOME / EPS
|
||||||||||||||
(Amounts in thousands, except per-share data)
|
|
Three Months Ended
March 31,
|
Three Months Ended
June 30,
|
Three Months Ended
September 30,
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|||||
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
$(676)
|
$773
|
$430
|
$871
|
$2,738
|
$1,615
|
$1,378
|
$1,386
|
$3,871
|
$4,646
|
Amortization
of acquired intangibles
|
1,426
|
376
|
1,403
|
512
|
1,509
|
667
|
1,387
|
1,436
|
5,726
|
2,992
|
Non-cash
stock based compensation
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenues
|
14
|
25
|
15
|
38
|
19
|
43
|
20
|
44
|
67
|
150
|
Sales
and marketing
|
633
|
140
|
341
|
146
|
384
|
153
|
419
|
273
|
1,777
|
713
|
Technology
support
|
329
|
71
|
92
|
151
|
77
|
201
|
86
|
87
|
586
|
509
|
General
and administrative
|
388
|
417
|
418
|
217
|
460
|
287
|
716
|
264
|
1,982
|
1,185
|
Total
non-cash stock-based compensation
|
1,364
|
653
|
866
|
552
|
940
|
684
|
1,241
|
668
|
4,412
|
2,557
|
Acquisition
costs
|
429
|
-
|
148
|
925
|
-
|
726
|
5
|
537
|
582
|
2,189
|
Severance
costs
|
839
|
330
|
-
|
-
|
-
|
-
|
518
|
-
|
1,357
|
330
|
Litigation
settlements
|
(5)
|
(25)
|
4
|
(25)
|
(24)
|
(25)
|
(25)
|
(33)
|
(50)
|
(108)
|
Gain
(loss) on investment
|
-
|
-
|
-
|
-
|
-
|
-
|
777
|
(636)
|
777
|
(636)
|
Gain
on disposal
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,184)
|
-
|
(2,184)
|
-
|
Income
taxes
|
(432)
|
257
|
305
|
647
|
1,312
|
1,488
|
1,631
|
1,041
|
2,815
|
3,433
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
income
|
$2,945
|
$2,364
|
$3,156
|
$3,482
|
$6,475
|
$5,155
|
$4,728
|
$4,399
|
$17,306
|
$15,403
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average diluted shares
|
13,346
|
11,097
|
13,295
|
11,057
|
13,337
|
11,540
|
13,369
|
13,397
|
13,303
|
12,662
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
GAAP EPS
|
$(0.06)
|
$0.07
|
$0.03
|
$0.08
|
$0.21
|
$0.14
|
$0.10
|
$0.10
|
$0.29
|
$0.37
|
EPS
impact of adjustments
|
0.27
|
0.14
|
0.21
|
0.24
|
0.28
|
0.31
|
0.25
|
0.22
|
1.01
|
0.85
|
Non-GAAP
EPS
|
$0.22
|
$0.21
|
$0.24
|
$0.31
|
$0.49
|
$0.45
|
$0.35
|
$0.33
|
$1.30
|
$1.22
|
AUTOBYTEL INC.
|
||||||
RECONCILIATION TO REFLECT DIVESTITURE OF
|
||||||
SPECIALTY FINANCE LEADS PRODUCT
|
||||||
(Amounts in millions, except per-share data)
|
|
Twelve
months ended December 31, 2016
|
||
|
GAAP
|
Non-GAAP
|
Non-GAAP
|
|
Revenue
|
Income
|
EPS
|
|
|
|
|
Unadjusted
|
$156.7
|
$17.3(1)
|
$1.30(1)
|
Finance
leads
|
(6.3)
|
(0.5)
|
(0.03)
|
|
$150.4
|
$16.8
|
$1.27
|
(1)
See reconciliation of Non-GAAP Income/EPS to
comparable
GAAP
measures in table above. |
|
|
Company
Contact
Kimberly
Boren
Chief
Financial Officer
949-862-1396
kimb@autobytel.com
Investor
Relations
Cody
Slach or Sean Mansouri
Liolios
949-574-3860
ABTL@liolios.com