Autobytel Reports Record Third Quarter 2015 Results

Total Revenues Up 47% to $40.2 Million; Non-GAAP EPS Up 95% to $0.45 Per Diluted Share


IRVINE, Calif., Nov. 05, 2015 (GLOBE NEWSWIRE) -- Autobytel Inc. (NASDAQ:ABTL), a leading provider of online automotive services connecting consumers with dealers, reported financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Highlights vs. Year-Ago Quarter

  • Total revenues increased 47% to a record $40.2 million
  • Advertising revenues increased 194% to $3.2 million
  • Net income increased 44% to $1.6 million or $0.14 per diluted share
  • Non-GAAP income increased 103% to a record $5.2 million or $0.45 per diluted share

Management Commentary

“This record third quarter was driven by our higher-margin advertising segment led by AutoWeb, expansion with OEM partners and the addition of Dealix, which continues to outperform our expectations,” said Jeff Coats, president and CEO of Autobytel. “We continue to retain a greater amount of Dealix revenue than expected, while removing dealers and suppliers that do not meet our margin and quality requirements. Dealix is already contributing positively to net income as we work toward full integration by year-end.”

“Subsequent to the quarter,” continued Coats, “we acquired our performance marketing partner, AutoWeb, which dramatically strengthens our technology leadership in the automotive digital marketplace. We’ve already started to pursue several promising cross-sell opportunities, while also beginning to realize synergies across our technology platforms and data methodologies.

“As we close out the year and look ahead to 2016, we’ll continue to focus on driving growth through lead generation and our higher-margin advertising segment, as well as through our suite of value-added product offerings, with the ultimate goal of helping dealers and OEMs better leverage their marketing budgets and investments in website properties.”

Third Quarter 2015 Financial Results

Total revenues in the third quarter of 2015 increased 47% to $40.2 million compared to $27.4 million in the year-ago quarter. Revenues generated from automotive leads and services increased 44% to $35.2 million compared to $24.5 million a year ago. The increase was driven by the acquisition of Dealix and growth in advertising revenues. Retail revenues increased 19% to $15.3 million compared to $12.8 million last year, and wholesale revenues increased 71% to $20.0 million compared to $11.7 million in the year-ago quarter.

Advertising revenues increased 194% to $3.2 million compared to $1.1 million in the year-ago quarter. The increase was due to growth in display advertising through continued optimization of the company’s Jumpstart relationship, as well as a significant increase in click revenue. The increase in click revenue was driven by the company’s prior commercial relationship with AutoWeb, which was acquired on October 1, 2015, and an increase in traffic from the acquisition of Dealix.

Gross profit in the third quarter increased 39% to $15.3 million compared to the year-ago quarter. Gross margin was 38.1% compared to 40.2% one year ago. The expected decline in gross margin was primarily due to Dealix, which historically generated gross margin of approximately 32.0%.

Total operating expenses in the third quarter were $12.0 million compared to $9.0 million in the year-ago quarter. As a percentage of revenues, total operating expenses decreased 310 basis points to 29.8% compared to 32.9% in the third quarter of 2014, demonstrating the operating leverage in the business.

Net income in the third quarter of 2015 increased 44% to $1.6 million or $0.14 per diluted share, compared to $1.1 million or $0.11 per diluted share in the year-ago quarter.

Non-GAAP income increased 103% to $5.2 million compared to $2.5 million in the third quarter of 2014 (see “Note about Non-GAAP Financial Measures” below for further discussion). Non-GAAP diluted earnings per share increased 95% to $0.45 compared to $0.23 per diluted share in the year-ago quarter.

Business Outlook

Autobytel reaffirms its fiscal 2015 revenue guidance to range between $132.0 million and $134.0 million, representing an increase of approximately 24% to 26% from 2014. The company is increasing its expectation for non-GAAP diluted EPS in fiscal 2015 to range between $1.20 and $1.24, an increase of approximately 45% to 49%.

Conference Call

Autobytel will hold a conference call today at 5:00 p.m. Eastern time to discuss its third quarter 2015 results, followed by a question-and-answer session.

Date: Thursday, November 5, 2015
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: 66892955

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 12, 2015. 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: 66892955

Tax Benefit Preservation Plan

At December 31, 2014, the company had approximately $94.5 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 November 2, 2015, there were 10,499,719 shares of the Company’s common stock 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

Autobytel has disclosed non-GAAP income and non-GAAP EPS in this press release, which are non-GAAP financial measures as defined by SEC Regulation G, for the 2015 and 2014 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, 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 company’s net operating loss (NOL) tax credits and recent acquisitions. 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. These forward-looking statements, including, (i) that the company will continue to drive growth through lead generation and its higher-margin advertising segment, as well as through its suite of value-add product offerings; (ii) that the company reaffirms its fiscal 2015 revenue guidance to range between $132.0 million and $134.0 million, representing an increase of approximately 24% to 26% from 2014; and (iii) that the company increases its expectation for non-GAAP diluted EPS in fiscal 2015 to range between $1.20 and $1.24, an increase of approximately 45% to 49%, 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, 2014 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,  
    2015     2014   
Assets    
Current assets:    
 Cash and cash equivalents$  18,798  $  20,747  
 Accounts receivable (net of allowances for bad debts and customer credits of $1,087 and $770 at September 30, 2015 and December 31, 2014, respectively)   27,723     18,311  
 Deferred tax asset   3,616     5,498  
 Prepaid expenses and other current assets   2,217     811  
   Total current assets   52,354     45,367  
Property and equipment, net   3,099     1,904  
Investments   4,060     3,880  
Intangible assets, net   12,996     4,173  
Goodwill   32,096     20,948  
Long-term deferred tax asset   23,615     27,396  
Other assets   1,002     1,081  
   Total assets$  129,222  $  104,749  
      
Liabilities and Stockholders' Equity    
Current liabilities:    
 Accounts payable$  9,564  $  7,685  
 Accrued expenses and other current liabilities   9,934     9,495  
 Convertible note payable   -      5,000  
 Current portion of term loan payable   5,250     2,250  
   Total current liabilities   24,748     24,430  
 Convertible note payable   1,000     1,000  
 Long-term portion of term loan payable   14,063     4,500  
 Borrowings under credit facility   8,000     5,250  
 Other non-current liabilities   25     311  
   Total liabilities   47,836     35,491  
      
Commitments and contingencies   -      -   
      
Stockholders' equity:    
 Preferred stock, $0.001 par value; 11,445,187 shares authorized; none outstanding   -      -   
 Common stock, $0.001 par value; 55,000,000 shares authorized;  10,499,719 and 8,880,377 shares issued and outstanding, as of September 30, 2015 and December 31, 2014, respectively   10     9  
 Additional paid-in capital   317,057     308,190  
 Accumulated deficit   (235,681)    (238,941) 
   Total stockholders' equity   81,386     69,258  
   Total liabilities and stockholders' equity$  129,222  $  104,749  
      

 

 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,
          
    2015   2014   2015   2014 
          
Revenues:        
 Lead fees $  36,459  $  25,880  $  88,480  $  76,727 
 Advertising    3,211     1,093     6,846     2,531 
 Other revenues    505     391     1,479     979 
Total revenues    40,175     27,364     96,805     80,237 
Cost of revenues    24,878     16,356     59,639     48,828 
Gross profit    15,297     11,008     37,166     31,409 
          
Operating expenses:        
 Sales and marketing    4,109     3,336     11,430     11,078 
 Technology support    3,574     2,055     7,952     5,971 
 General and administrative    3,600     3,161     9,854     8,899 
 Depreciation and amortization    720     483     1,808     1,373 
 Litigation settlements    (25)    (25)    (75)    (118)
   Total operating expenses    11,978     9,010     30,969     27,203 
Operating income    3,319     1,998     6,197     4,206 
 Interest and other income (expense), net    (216)    (177)    (546)    (518)
 Income tax provision    1,488     697     2,391     1,394 
Net income and comprehensive income $  1,615  $  1,124  $  3,260  $  2,294 
          
          
Basic earnings per common share $  0.16  $  0.12  $  0.33  $  0.26 
Diluted earnings per common share $  0.14  $  0.11  $  0.30  $  0.22 
          
          
Shares used in computing earnings per common share (in thousands):       
  Basic     10,375     9,029     9,732     8,986 
  Diluted     11,540     11,099     10,718     11,255 
          

 

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,
   2015  2014   2015  2014   2015  2014   2015  2014 
             
             
Net income $  773 $  370  $  871 $  801  $  1,615 $  1,124  $  3,260 $  2,294 
Amortization of acquired intangibles    376    332     512    376     667    376     1,556    1,085 
Non-cash stock based compensation            
Cost of revenues    25    17     38    17     43    18     106    52 
Sales and marketing    140    109     146    142     153    149     439    400 
Technology support    71    56     151    67     201    61     422    184 
General and administrative    417    104     217    142     287    142     922    389 
Total non-cash stock-based compensation    653    286     552    368     684    370     1,889    1,025 
Acquisition costs    -     984     925    116     726    -      1,652    1,100 
Severance costs    330    -      -     -      -     -      330    -  
Litigation settlements    (25)   (68)    (25)   (25)    (25)   (25)    (75)   (118)
Income taxes    257    220     647    476     1,488    697     2,391    1,394 
             
Non-GAAP income $  2,364 $  2,124  $  3,482 $  2,112  $  5,155 $  2,542  $  11,003 $  6,780 
             
Weighted average diluted shares    11,097    10,282     11,057    11,271     11,540    11,099     10,718    11,255 
             
             
GAAP EPS $  0.07 $  0.04  $  0.08 $  0.08  $  0.14 $  0.11  $  0.30 $  0.22 
EPS impact of adjustments    0.14    0.17     0.24    0.12     0.31    0.13     0.72    0.40 
Non-GAAP EPS $  0.21 $  0.21  $  0.31 $  0.19  $  0.45 $  0.23  $  1.03 $  0.60 
             

 


            

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