This is a summary of the fourth quarter fiscal 2007 earnings call as presented by Autobytel, Inc. on March 17, 2008.
Management:
- Chief Executive Officer: James Riesenbach
- Chief Financial Officer: Monty Houdeshell
Key Investors Issues
- Revenue decreased 8% to $18.9 million from $20.4 million in 2006.
- The net loss was $4.4 million or 10 cents per share, up 40% from a net loss of $7.3 million or 17 cents per share in the prior year.
- Non-cash share based compensation expense declined 28% to $1.0 million from $1.4 million in 2006.
Full Year Highlights
- Autobytel, Inc sold the AVV business in January representing the culmination of an almost two-year strategic process.
- Revenue of $84.4 million was down slightly from $85.1 million in 2006, primarily as the result of reduced advertising revenues in the fourth quarter of 2007.
- Autobytils'' net loss was reduced by 85% to $5.4 million or 12 cents per share from $31.5 million or 74 cents per share in 2006.
Fourth Quarter Highlights
Revenue decreased 8% to $18.9 million from $20.4 million in 2006 primarily because of the initiative to improve advertising traffic quality across Autobytel''s network.
- Revenue from lead referral was up slightly year-over-year offset by a 43% decrease in advertising revenue.
- Approximately 84% of revenue came from lead referral with 15% generated from advertising.
- By comparison, leads represented 75% of fourth quarter 2006 revenues while advertising represented 25%.
Loss from continuing operations was $6.3 million compared with a $9.1 million loss from continuing operations in the same period in the previous year.
- The year-over-year reduction in operating expenses to $29.7 million reflected lower general and administrative costs related to the cost management initiative and lower legal and consulting expenses.
- Net loss was $4.4 million or 10 cents per share an improvement of 40% from the previous year net loss of $7.3 million or 17 cents per share on cost reduction initiatives.
- Non-cash share-based compensation amounted to $1.0 million a decrease of 29% from $1.4 million in the same quarter the previous year.
- Total capital spending was $400,000 principally related to infrastructure projects.
Both lead and advertising revenue were sequentially as a result of anticipated normal seasonality in the automotive category.
- The firm delivered approximately 723,000 purchase requests up from 626,000 in the same period last year.
- The increase is primarily attributable to the new multiple lead distribution technology while the sequential decrease resulted from expected seasonality.
- Approximately 61% of these purchase requests were delivered to retail dealers compared with 70% one year ago.
Average revenue for purchase requests came in at $18.30, a decrease of 8% compared with $19.92 in the prior year, with the decline reflecting an increase in the mix of wholesale purchase requests that typically generate a lower average price.
- On a sequential quarter over quarter basis, the mix was skewed in the other direction towards retail.
- Finance leads declined as a result of lower availability of total leads in the market place and some disruption to the supply of affiliate leads by auction-based models.
– Autobytel drove 148,000 finance leads compared with 179,000 in last year''s fourth quarter.
The average revenue for finance lead grew to $18.14 from $15.68 in the 2006 fourth quarter an increase of 15.7 %
- The sequential increase relates primarily to the mix of retail versus wholesale placement.
- As a result, finance lead revenue was $2.7 million versus $2.8 million in the 2006 fourth quarter.
- Page views were $70.8 million down 32% from last year''s primarily the result of the elimination of low-quality third party traffic.
Revenue for a thousand page views was $36.87 versus $43.79 in the fourth quarter of 2006 indicating a 16% decrease relating to lower advertising rates or CPMs from the existing advertising clients as well as traffic increases in certain lower CPM areas of the site.
- Due to the low quality traffic provided by certain traffic acquisition sources, the ad performance across the network has been declining.
- In turn, this generated increasing pressure from advertisers to reduce advertising rates and improve performance.
- Cost of revenue which includes lead and traffic acquisition cost, totaled $13 million or 69% of revenue compared with $10.7 million or 52% of revenue in the prior year.
- Autobytel spent $2.9 million for marketing, acquiring and attracting traffic and search based leads to MyRide and the Autobytel legacy site.
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