Attached files
file | filename |
---|---|
EX-99.2 - TRANSCRIPT - AutoWeb, Inc. | ex99-2.htm |
8-K - FORM 8K - AutoWeb, Inc. | auto8k_may102018.htm |
Exhibit
99.1
AutoWeb
Reports First Quarter 2018 Results
IRVINE, Calif. – May 10, 2018
– AutoWeb, Inc. (Nasdaq: AUTO), a robust digital
marketing platform providing advertising solutions for automotive
dealers and OEMs, is reporting financial results for the first
quarter ended March 31, 2018.
First
Quarter 2018 Financial Summary vs. Year-Ago Quarter
●
Total revenues were
$32.3 million compared to $37.3 million.
●
Advertising
revenues increased to $8.1 million, with click revenues up 3% to
$6.7 million.
●
Net loss was $10.3
million or $(0.81) per share, compared to net income of $0.5
million or $.04 per share.
●
Non-GAAP loss was
$0.9 million or $(0.07) per share, compared to non-GAAP income of
$3.5 million or $0.26 per share.
Management
Commentary
“AutoWeb is a
pioneer in the automotive marketing industry, and has established
itself as a premier provider of measured media advertising
solutions,” said Jared Rowe, president & CEO of AutoWeb.
“We work with every major automotive OEM and thousands of retail dealers across
the country, while helping millions of consumers purchase a car
each year. AutoWeb has certainly struggled over the last 18 months,
and the company’s results are disappointing to everyone.
However, we believe the need for AutoWeb’s lead and click
products remains strong, which speaks to the power of our platform
and the brand equity and trust AutoWeb has created among our
clients.
“I assumed
the leadership role less than one month ago, and we remain in the
early stages of redeveloping our strategic and operating plans to
make the AutoWeb platform more efficient and effective. I believe
there are many opportunities to return AutoWeb to growth by
focusing on improved operational execution, enhancing our client
value proposition, and redefining investments by our company. We
plan to lay out our strategic plans in more detail later in the
year. In the meantime, we will remain focused on serving our
long-standing OEM and dealer customers with highly targeted,
measurable, and cost-efficient advertising
solutions.”
First
Quarter 2018 Financial Results
Total
revenues in the first quarter of 2018 were $32.3 million compared
to $37.3 million in the year-ago quarter. The decline was primarily
due to less efficient traffic acquisition, and lower retail dealer
count and lead volumes. The decline was partially offset by
continued growth of advertising click revenues, which increased 3%
to $6.7 million.
Gross
profit in the first quarter was $7.7 million compared to $12.9
million in the year-ago quarter, with the decrease driven by less
efficient traffic acquisition. As a percentage of revenue, gross
profit was 23.8%.
Total
operating expenses in the first quarter were $18.0 million compared
to $11.7 million in the year-ago quarter, with the increase
primarily due to a goodwill impairment charge of $5.1 million, as
well as severance costs associated with the company’s
previously announced headcount realignment in February and the exit
of its previous CEO.
-1-
Net
loss in the first quarter of 2018 was $10.3 million or $(0.81) per
share, compared to net income of $0.5 million or $0.04 per share in
the year-ago quarter.
Non-GAAP loss was
$0.9 million or $(0.07) per share, compared to non-GAAP income of
$3.5 million or $0.26 per share in the first quarter of 2017 (see
"Note about Non-GAAP Financial Measures" below for further
discussion). The decline was primarily driven by the aforementioned
lower revenue and gross margins resulting from less efficient
traffic acquisition, lower retail dealer count and lead
volumes.
At
March 31, 2018, cash and cash equivalents totaled $15.2 million
compared to $25.0 million at December 31, 2017, with the reduction
primarily driven by the repayment of AutoWeb’s $8.0 million
revolving line of credit. Total debt was reduced to $1.0 million
compared to $9.0 million at December 31, 2017.
Conference
Call
AutoWeb
will hold a conference call today at 5:00 p.m. Eastern time to
discuss its first quarter 2018 results, followed by a
question-and-answer session.
Date:
Thursday, May 10, 2018
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:
5996108
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 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 May 19, 2018. The call will
also be archived in the Investors section of AutoWeb’s
website for one year.
Toll-free replay
number: 1-855-859-2056
International
replay number: 1-404-537-3406
Replay
ID: 5996108
Tax Benefit Preservation Plan
At
December 31, 2017, the company had approximately $74.0 million in
available net operating loss carryforwards (NOLs) for U.S. federal
income tax purposes. The company reminds stockholders about
AutoWeb’s Tax Benefit Preservation Plan dated May 26, 2010,
as amended on April 14, 2014 and April 13, 2017 (as amended, the
“Plan”) between the company and Computershare Trust
Company, N.A., as rights agent.
-2-
The
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. In general, an ownership change will occur if the
company’s 5% shareholders, for purposes of Section 382,
collectively increase their ownership in the company by an
aggregate of more than 50 percentage points over a rolling
three-year period. The Plan is designed to reduce the likelihood
that the company experiences such an ownership change by
discouraging any person or group from becoming a new 5% shareholder
under Section 382. 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. There is no guarantee that the Plan will achieve
the objective of preserving the value of the company’s
NOLs.
As of
April 30, 2018, there were 12,886,225 shares of the company’s
common stock, $0.001 par value, outstanding. Persons or groups
considering the acquisition of shares of beneficial ownership of
the company’s common stock should first evaluate their
percentage ownership based on this revised outstanding share number
to ensure that the acquisition of shares does not result in
beneficial ownership of 4.9% or more of outstanding shares. For
more information about the Plan, please visit investor.autoweb.com/tax.cfm.
About
AutoWeb, Inc.
AutoWeb, 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 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 AutoWeb news alerts and special
event invitations by accessing the online registration form at
investor.autoweb.com/alerts.cfm.
Note
about Non-GAAP Financial Measures
AutoWeb
has disclosed non-GAAP (loss) income and non-GAAP EPS in this press
release, which are non-GAAP financial measures as defined by SEC
Regulation G, for the 2018 and 2017 first quarters. The company
defines (i) non-GAAP (loss) income as GAAP net (loss) income before
amortization of acquired intangibles, non-cash stock-based
compensation, severance costs, litigation settlements, goodwill
impairment and income taxes; and (ii) non-GAAP EPS as non-GAAP
(loss) income divided by weighted average diluted shares
outstanding. The company's management believes that presenting
non-GAAP (loss) 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
company’s net operating loss (NOL) tax credits. 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 (loss) income and non-GAAP EPS are
included at the end of this press release.
-3-
Forward-Looking
Statements Disclaimer
The
statements contained in this press release or that may be made
during the conference call described above 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,
projections, statement regarding future events and our outlook
regarding our performance and growth are forward-looking
statements. These forward-looking statements, including, that (i)
we believe the need for AutoWeb’s lead and click products
remains strong; (ii) Mr. Rowe believes there are many opportunities
to return AutoWeb to growth by focusing on improved operational
execution, enhancing our client value proposition, and redefining
investments in the company; and (iii) the company plans to lay out
its strategic plans in more detail later in the year, but will
remain focused on serving our long-standing OEM and dealer
customers with highly-targeted, measurable, and cost-efficient
advertising solutions, 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. AutoWeb 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 AutoWeb; changes in laws and
regulations; costs of legal matters, including, defending lawsuits
and undertaking investigations and related matters; and other
matters disclosed in AutoWeb’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, 2017 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 AutoWeb and the market price of the company's
stock.
Company
Contact
Wesley
Ozima
Interim
Chief Financial Officer
949-225-4543
wes.ozima@autoweb.com
Investor
Relations Contact
Sean
Mansouri or Cody Slach
Liolios
Investor Relations
949-574-3860
AUTO@liolios.com
-4-
AUTOWEB, INC.
|
||||
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
|
||||
(Amounts in thousands, except share and per-share
data)
|
|
March 31,
|
December 31,
|
|
2018
|
2017
|
Assets
|
|
|
Current
assets:
|
|
|
Cash
and cash equivalents
|
$15,159
|
$24,993
|
Short-term
investment
|
255
|
254
|
Accounts
receivable (net of allowances for bad debts and customer credits of
$857 and $892 at March 31, 2018 and December 31, 2017,
respectively)
|
25,024
|
25,911
|
Prepaid
expenses and other current assets
|
1,667
|
1,805
|
Total
current assets
|
42,105
|
52,963
|
Property
and equipment, net
|
4,070
|
4,311
|
Investments
|
100
|
100
|
Intangible
assets, net
|
27,426
|
29,113
|
Goodwill
|
-
|
5,133
|
Long-term
deferred tax asset
|
-
|
692
|
Other
assets
|
1,269
|
601
|
Total
assets
|
$74,970
|
$92,913
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable
|
$5,984
|
$7,083
|
Accrued
employee-related benefits
|
1,925
|
2,411
|
Other
accrued expenses and other current liabilities
|
7,473
|
7,252
|
Current
convertible note payable
|
1,000
|
-
|
Total
current liabilities
|
16,382
|
16,746
|
Convertible
note payable
|
-
|
1,000
|
Borrowings
under revolving credit facility
|
-
|
8,000
|
Total
liabilities
|
16,382
|
25,746
|
|
|
|
Commitments
and contingencies
|
-
|
-
|
|
|
|
Stockholders'
equity:
|
|
|
Preferred
stock, $0.001 par value; 11,445,187 shares authorized
|
|
|
Series
A Preferred stock, none issued and outstanding
|
-
|
-
|
Common
stock, $0.001 par value; 55,000,000 shares authorized; 12,896,225
and 13,058,841 shares issued and outstanding, as of March 31, 2018
and December 31, 2017, respectively
|
13
|
13
|
Additional
paid-in capital
|
357,754
|
356,054
|
Accumulated
deficit
|
(299,179)
|
(288,900)
|
Total
stockholders' equity
|
58,588
|
67,167
|
Total
liabilities and stockholders' equity
|
$74,970
|
$92,913
|
-5-
AUTOWEB, INC.
|
|||||
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
|
|||||
(Amounts in thousands, except per-share data)
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2018
|
2017
|
|
|
|
Revenues:
|
|
|
Lead
fees
|
$24,080
|
$29,092
|
Advertising
|
8,087
|
7,969
|
Other
revenues
|
182
|
280
|
Total
revenues
|
32,349
|
37,341
|
Cost
of revenues
|
24,659
|
24,430
|
Gross
profit
|
7,690
|
12,911
|
|
|
|
Operating
expenses:
|
|
|
Sales
and marketing
|
3,712
|
3,763
|
Technology
support
|
3,385
|
3,253
|
General
and administrative
|
4,575
|
3,457
|
Depreciation
and amortization
|
1,160
|
1,229
|
Goodwill
impairment
|
5,133
|
-
|
Total
operating expenses
|
17,965
|
11,702
|
Operating
income (loss)
|
(10,275)
|
1,209
|
Interest
and other income (expense), net
|
-
|
(100)
|
Income
(loss) before income tax provision
|
(10,275)
|
1,109
|
Income
tax provision
|
4
|
625
|
Net
income (loss) and comprehensive income (loss)
|
$(10,279)
|
$484
|
|
|
|
|
|
|
Basic
earnings (loss) per common share
|
$(0.81)
|
$0.04
|
Diluted
earnings (loss) per common share
|
$(0.81)
|
$0.04
|
|
|
|
Shares
used in computing earnings (loss) per common share (in
thousands):
|
|
|
Basic
|
12,617
|
10,909
|
Diluted
|
12,617
|
13,309
|
-6-
AUTOWEB, INC.
|
|||
RECONCILIATION OF NON-GAAP INCOME (LOSS) / EPS
|
|||
(Amounts in thousands, except per-share data)
|
|
Three Months Ended
March 31,
|
|
|
2018
|
2017
|
|
|
|
|
|
|
Net
income (loss)
|
$(10,279)
|
$484
|
Amortization
of acquired intangibles
|
1,687
|
1,387
|
Non-cash
stock based compensation:
|
|
|
Cost
of revenues
|
15
|
20
|
Sales
and marketing
|
225
|
412
|
Technology
support
|
152
|
127
|
General
and administrative
|
1,234
|
452
|
Total
non-cash stock-based compensation
|
1,626
|
1,011
|
Severance
costs
|
950
|
-
|
Litigation
settlements
|
(17)
|
(25)
|
Goodwill
impairment
|
5,133
|
-
|
Income
taxes
|
4
|
625
|
|
|
|
Non-GAAP
income (loss)
|
$(896)
|
$3,482
|
|
|
|
Weighted
average diluted shares
|
12,617
|
13,309
|
|
|
|
|
|
|
Diluted
GAAP EPS
|
$(0.81)
|
$0.04
|
EPS
impact of adjustments
|
0.74
|
0.23
|
Non-GAAP
EPS
|
$(0.07)
|
$0.26
|
-7-