This summary is based on the full year fiscal 2005 earnings call conducted by Autobytel Inc. (ABTL) on March 16, 2006.
Management:
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Chief Executive Officer, President: Richard Post
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Chief Financial Officer, Principal Accounting Officer and Executive Vice President: Michael Schmidt
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Investor Relations: Jennifer Klein
Key Investors Issues
- Revenue rose 3% to $125.3 million from $122.2 million in the prior year.
- The firm realized a net loss of $6.3 million or 15 cents per share, down from $5.8 million or 13 cents per share in 2004.
- Average revenue per finance lead increased to $12.27 in 2005 from $10.99 in 2004.
Full Year Highlights
Revenue totaled $125.3 million, an increase of $3.1 million or 3% from 2004 revenue of $122.2 million due to growth in revenue from advertising and CRM services.
- The revenue mix was 62% leads, 19% CRM, 15% advertising, and 4% data application and other revenue against revenue mix of 69% leads, 16% CRM''s, 11% advertising and 4% data applications and other revenue in the prior year.
- Lead fees revenues totaled $77.5 million, a decrease of $7.3 million or 9% from 2004, with the decrease attributable to a decline in the average number of purchase requests delivered to retail and enterprise dealers as well as decline in the number of dealers in the network.
- The firm delivered 3.5 million purchase requests versus 4.2 million in 2004 and 2.2 million retails and 1.3 million enterprise purchase requests were delivered in 2005, representing a decrease of 500,000 and 200,000 respectively from 2004.
Additionally, the firm delivered 821,000 finance requests, an increase of 300,000 from 2004 and average revenue per purchase request delivered was $19.05 versus $18.72 in 2004.
- Average revenue per finance lead increased to $12.27 in 2005 from $10.99 in 2004.
- Advertising revenue increased by $5.5 million or 40% to $19.2 million compared to $13.7 million in 2004.
- Revenue from CRM services increased by $5.1 million or 27% to $24.1 million, compared to $19 million in 2004 with growth coming from both the RPM and AVV products.
- Revenues from data, applications and other decreased by $300,000 or 7% to $4.4 million, compared to $4.8 million in 2004.
Cost of revenues, which includes traffic acquisition costs or TAC totaled $52.2 million, an increase of $1.6 million from 2004.
- Other operating expenses totaled $81.9 million, from $66 million in the prior year driven by an increase in general and administrative costs.
- G&A expense increased by $11.2 million or 59% to $30 million, compared to $18.8 million in 2004 with the increase due to increased costs associated with the internal review, restatements and audits of the consolidated financial statements.
Expenses were also driven by an increase in legal fees of $3.6 million, of which $1.8 million was associated with enforcing intellectual property rights and increases in temporary personnel costs of $1.5 million accounted for the majority of the other increase.
- Sales and marketing expense increased by $1.4 million or 5% to $27.3 million compared to $25.9 million in 2004.
- Product and technology development expense increased by $2.9 million or 15% to $23.1 million compared to $20.2 million in 2004.
Net loss was $6.3 million or 15 cents per share, down from $5.8 million or 13 cents per share in the prior year on increased expenses.
- The company had $48.4 million in domestic cash, cash equivalents and short-term and long-term investments.
- On December 15, 2005 the owners of Autobytel Europe agreed to dissolve the company and as a result of such agreement, it received a cash distribution from Autobytel Europe of $3.9 million.
- This amount was previously classified, previously reflected on the consolidated balance sheet as restricted international cash and cash equivalents.
- Net cash used in operating activities was $6 million, down from $7.6 million in 2004 resulting from the net loss of $6.2 million for the period, a $4.8 million of increase in accounts receivable and $700,000 decrease in accounts payable and accrued expenses.
Operational Highlights:
- New innovative Rich Media products and video, such as CarTV, contributed to the excitement around Autobytel''s media offerings.
- CarTV served nearly 370,000 hours of video programming via Autobytel''s network of vehicle research buying sites and other venues including iTunes and video podcasting.
- The firm saw net dealer adds for both RPM and Web Control and CRM customer relationships consisted of 2,980 Web Control relationships and 820 RPM relationships.
- The Web Control product continues to benefit dealer customers and as car shoppers have unlimited opportunities to research vehicle information online, dealers are getting Internet leads funded to them from Autobytel and a multitude of other sources.
Web Control added 190 relationships, and according to new research, auto dealerships using customer management systems are performing 15% better than their competitors.
- Following record sales, spurred on by the employee pricing in the third quarter, automotive sales took a significant downturn in the fourth quarter.
- Many dealers pulled back their overall marketing spend during the fourth quarter, as the effects of a post promotion hangover were accentuated by typical seasonality.
- The firm had 5,570 retail dealer relationships. 740 enterprise dealer relationship with major dealer groups and 8 direct relationships, encompassing 18 brands with automotive manufacturers or their automotive buying service affiliates, which represented an additional 22,000 enterprise dealer relationships.
- The finance league business, which was acquired as part of the Car.com acquisition, saw 30% growth in dealer relationships and revenue grew to $10 million.
The Black Condor search engine technology benefits Autobytel''s nationwide network of dealers by sending them end market car shoppers at a fraction of the cost of traditional advertising.
- One of the many advantages of this technology is having the ability to determine the return on investment of each keyword relative to or combined value of the page views and vehicle purchase requests.
- Black Condor, coupled with the firm’s natural search initiatives, resulted in 175 million page search page views, which is both natural and paid search combined, a 45% increase from the previous year.
