LONDON and NEW YORK, June 23, 2006 (PRIMEZONE) -- Auto Data Network, Inc. (Pink Sheets:ADNW) CEO Ian Warwick today provides an update on the company's progress. Warwick commented, "Since I took over as CEO of the company I have had to deal with a variety of challenging issues whilst directing the company down a path to maximise value. Aside from the general economic conditions in the Automotive Industry, Auto Data Network had expanded rapidly over the previous 24 month period and faced issues with the integration of the acquisitions which have hindered progress." Warwick continued, "This being said we are now beginning to see the benefits of our repositioning."
On January 19, 2006, Aftersoft Group, Inc., the company's aftermarket software division, commenced trading publicly (OTCBB:ASFG). This is the first phase of our spin out strategy through which stock in this division will be distributed to shareholders. For the quarter ending March 31, 2006, Aftersoft reported revenues of $5.76 million and a net income of $502,000. To date all Aftersoft's profits have been generated in Europe but with the introduction of new products and the streamlining of the U.S. operations we expect to see a contribution from U.S. operations. In addition, we are launching our software offering into the hardlines, lumber and wholesale markets which, combined, are four times the size of the Aftermarket sector that we currently serve.
Without any contribution from the additional markets, we expect our existing business to generate revenues of $24m and a net income of $3.5m for Aftersoft for the year ending June 30, 2007.
The second key element of the company's ongoing business is our UK-based dealer management ("DMS") division. There has been increased activity in this area in the last 6 months with the leading participants in this space, Reynolds and Reynolds (NYSE:REY) and ADP (NYSE:ADP), both looking to make acquisitions in this sector. ADP acquired competitor Kerridge December 2005, and on May 24, 2006, Reynolds announced their intention to acquire DCS Group Plc. Our "DMS" division currently owns a minority interest in DCS automotive (a wholly owned subsidiary and the only asset in DCS Group Plc).
We have repositioned the company's "DMS" Software division, previously Auto Dealer Management, and will re-launch next month. This division now consists of our key software and services offering, and low margin non-core operations have either been discontinued or divisionalised with our data products. This strategy was undertaken to maximise the opportunity available with the increased activity in the "DMS" marketplace. This division is currently achieving annualised net income of $2m on $10m of sales and is now positioned to achieve substantial growth with its high margin offering.
We believe that there is an opportunity to acquire small DMS providers (some of whom we have identified) under a single profitable platform. To this end, we are commencing the process of listing this division in the UK. When this is completed, we intend dividending to our shareholders as previously stated.
The remaining data division is currently breaking even and although it has tremendous potential it will require considerable financial resource to develop to its full potential. We believe the most efficient way to return value is to sell this asset to a larger entity which has the resource to develop further.
Now that the company's repositioning is firmly on course, we anticipate a steady flow of news in the coming months.
To summarise, after 6 months of repositioning in a difficult marketplace, the company now has two focused businesses in high growth, high margin sectors that are now positioned for profitable sustained growth.
Safe Harbour Statement
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the company's business including increased competition; the ability of the company to expand its operations through either acquisitions or internal growth, to attract and retain qualified professionals, and to expand commercial relationships; technological obsolescence; general economic conditions; and other risks detailed time to time in the company's filings with the Securities and Exchange Commission (SEC).