Ableauctions Announces 2007 Financial Results.OJAI, Calif. -- Ableauctions.com Inc. (AMEX AMEX See: American Stock Exchange :AAC (Advanced Audio Coding) An audio compression technology that is part of the MPEG-2 and MPEG-4 standards. AAC, especially MPEG-4 AAC, provides greater compression and better sound quality than MP3, which also came out of the MPEG standard. ) (the "Company") announced today the results of operations for the year ended December 31, 2007. FINANCIAL SUMMARY: The Company reported revenue of $4,938,918 for the year ended December 31, 2007 compared to $6,243,865 for the year ended December 31, 2006, a decrease of 21% from the previous year. The Company reported a net loss of $693,258 or $(0.011) per share for the year ended December 31, 2007 compared to net income of $167,233 or $0.003 per share in 2006. The loss for the year ended December 31, 2007 is attributed to a write-down of inventory in the amount of $163,415, depreciation in the amount of $194,737, and a write-down of $225,111 to accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying primarily due to the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of an auction house located in the U.S. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. , defined as the carrying amount of the Company's assets minus its liabilities, increased to $14,012,307 at December 31, 2007 from $12,890,232 at December 31, 2006. MANAGEMENT'S REVIEW OF RESULTS: Commenting on the 2007 results, Abdul Ladha, President and Chief Executive Officer of Ableauctions.com Inc. said, "We have maintained profitability over the last several years as result of prudent management and innovative approaches to enhancing our business model. This year, while our shareholders' equity has grown, we have incurred an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $693,258. This loss can be attributed to two main factors; the downturn in the general economy of the United States The United States economy has the world's largest gross domestic product (GDP), $13.21 trillion in 2006. It is a mixed economy where corporations and other private firms make the majority of microeconomic decisions while being regulated by the government. and the shift in our investment strategy. "We derive most of our revenues, both from our liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy and auction broadcast services, from the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Revenues from our liquidation sector dropped sharply, by 27%, in 2007 as our existing and potential customers remained conservative in their spending, especially in the fourth quarter, as the United States economy struggled and continues to be challenged in the near term. Revenues from our auction broadcast services, iCollector and NAALive, remained substantially unchanged despite a significant loss incurred from the insolvency insolvency Condition in which liabilities exceed assets so that creditors cannot be paid. It is a financial condition that often precedes bankruptcy. In the context of equity, insolvency is the inability to pay debts as they become due; insolvency under the balance-sheet of an auction house located in the U.S. "We are adjusting accordingly and concentrating on prudent capital management while retaining a focus on building new revenue streams, maintaining cutting-edge technological capabilities, and developing our Canadian-based projects. "In an effort to expand our business, we develop real estate and make short term loans. The returns on our investments, real property development and lending help to support the development of our liquidation and auction businesses, including the development of new technologies for use by our on-line businesses. In 2007, we realized lower investment income as we shifted the focus of our investment portfolio from loans and securities, which tend to have shorter return cycles, to real-estate development projects, which have longer return cycles. In the absence of a shift in investment strategy, we may have realized greater investment income that could have offset some of the losses from operations we experienced during the 2007 fiscal year. However, we believe that income from our development projects will be greater over time. "On a positive note, we have recently seen an increase in activity on a number of new opportunities we have been pursuing over the last few years. We also expect revenue in 2009 to quadruple quad·ru·ple adj. 1. Consisting of four parts or members. 2. Four times as much in size, strength, number, or amount. 3. Music Having four beats to the measure. n. to over $20 million from our real-estate development projects in British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography if we are able to successfully complete the development of our properties. We have added a number of key individuals to our operations to assist us in further developing and executing our business strategy in the U.S. and Canada and we believe that we are well positioned and have sufficient capital resources to survive the economic downturn." FINANCIAL DETAILS: The Company reported revenue of $4,938,918 for the year ended December 31, 2007 compared to $6,243,865 for the year ended December 31, 2006, a decrease of 21% from the previous year. Due to the downturn in the U.S. economy, the Company experienced a 27% decrease in revenue from its liquidation services. Revenues from the Company's liquidation services totaled $3,574,616 during the 2007 fiscal year as compared to $4,917,198 during the 2006 fiscal year. Revenue from the Company's auction operations, iCollector and NAALive, remained substantially unchanged. The decrease in liquidation services revenue, which currently accounts for approximately 72% of the Company's total revenue, is the result of a decrease in demand for liquidation inventory from top retailers in the U.S. In order to weather the loss of revenues during the economic downturn, the Company has implemented strong cost controls in order to reduce recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. operating expenditures and is considering ways in which it might expand its operations in order to supplement revenue. If the U.S. economy does not experience a significant recovery during the 2008 fiscal year, the Company expects that its operations will continue to be adversely affected. The Company reported gross profit of $1,958,697 or 40% of total revenue for the year ended December 31, 2007, compared to $2,375,466 or 38% of total revenue for the year ended December 31, 2006. The marginal increase in gross profit as a percentage of revenue is a result of improvements in the pricing and product offerings of its liquidation operations. The increase also reflects the performance of the Company's higher-profit auction broadcasting services group, the growth of which outperformed the growth of the liquidation services groups during the fiscal year ended December 31, 2007. The Company's overall operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the year remained substantially unchanged. The Company's operating expenses totalled $2,994,064, or 61% of net revenues for the year ended December 31, 2007 as compared to $2,816,617, or 45% of net revenues for the year ended December 31, 2006. As a percentage of revenues, operating expenses increased significantly due to the decrease in revenue experienced in 2007. Management believes that the implementation of cost controls in order to reduce recurring operating expenditures and any expansion of its operations may result in increased revenue, which would improve the ratio of operating expenses to revenues. The Company reported a net loss of $693,258 or $(0.011) per share for the year ended December 31, 2007 compared to net income of $167,233 or $0.003 per share in 2006. The loss for the year ended December 31, 2007 is attributed to a write-down of inventory in the amount of $163,415, depreciation in the amount of $194,737, and a write-down of $225,111 to accounts receivable primarily due to the bankruptcy of an auction house located in the U.S. Shareholders' equity, defined as the carrying amount of the Company's assets minus its liabilities, increased to $14,012,307 at December 31, 2007 from $12,890,232 at December 31, 2006. About Ableauctions.com Ableauctions.com Inc. (AMEX "aac") is a high-tech liquidator Liquidator Person appointed by an unsecured creditor in the United Kingdom to oversee the sale of an insolvent firm's assets and the repayment of its debts. and on-line auction facilitator that operates the domains iCollector.com, Naalive.com and Unlimited Closeouts.com. As an on-line auction facilitator, the Company, with the experience of over 3,000 auctions, has developed state-of-the-art technology to broadcast auctions over the Internet (www.ableauctions.com/technology) and currently provides the technology and related services to auction houses, enabling them to broadcast auctions over the Internet. The Company broadcasts business and industrial auctions over the Internet for auctioneers and members of the National Auctioneers Association The National Auctioneers Association (NAA) is a group of auctioneers, auction businesses and related companies that seeks to promote the auction method of marketing and the practice of auctioneering in the United States The NAA is an interest group.. (NAA NAA Nomina Anatomica Avium. ) and art, antique antique. The term has been used collectively to designate classical Greek and Roman works of art, particularly sculptures; as an adjective to indicate an object, a period, or a style of ancient or early times; and as a noun, for objects of art, furniture, rugs, and collectible collectible An asset of limited supply that is sought for a variety of reasons including, it is hoped, an increase in value. Stamps, antiques, coins, and works of art are among the many things usually classified as collectibles. auctions for numerous galleries and auction houses around the world through eBay Live Auctions. As a liquidator, the Company, through Unlimited Closeouts, purchases overstocks, order cancellations and discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: products from major manufacturers and importers, then sells the merchandise to major retail chains, other resellers or the public. For a comprehensive Corporate Update and prior releases, visit www.ableauctions.com. For more information, contact Investor Relations Investor relations The process by which the corporation communicates with its investors. at investorrelations@ableauctions.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , particularly as related to, among other things, the business plans of the Company, statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc goals, plans and projections regarding the Company's financial position and the Company's business strategy. The words or phrases "would be," "will allow," "intends to," "may result," "are expected to," "will continue," "anticipates," "expects," "estimate," "project," "indicate," "could," "potentially," "should," "believe," "considers" or similar expressions are intended to identify "forward-looking statements." These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the performance of our staff, management, financing, competition, on-line auction business, our ability to implement or manage our expansion strategy, general economic conditions, our ability to license our software to other auction houses, our ability to acquire profitable companies and integrate them into our business successfully and other factors that are detailed in our Annual Report on Form 10-KSB and on documents we file from time-to-time with the Securities and Exchange Commission. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place undue reliance on such statements. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of such statement. Actual results may differ materially from the Company's expectations and estimates. The Company does not realize nor book the full revenue of auctions that it facilitates in its financials, only the net auction fees, that can vary from time-to-time, that it realizes. [TABLE OMITTED] The accompanying notes are an integral part of these consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge [TABLE OMITTED] [TABLE OMITTED] Supplemental Disclosures With Respect To Cash Flows (Note 13) |
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