Auto Data Network Generates $0.06 Per Share in Net Earnings on $6.2 Million in Revenue In Fiscal Third Quarter; Revenue Increases 11 Percent Over Previous Quarter.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 22, 2004 Auto (AUTOmatic) Refers to a wide variety of devices that perform unattended operations. Data Network, Inc. (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: ADNW), a provider of software and real-time data Real-time data denotes information that is delivered immediately after collection. There is no delay in the timeliness of the information provided. Some uses of this term confuse it with the term dynamic data. services to the worldwide automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. , today reported results for its fiscal third quarter and nine months ended November November: see month. 30, 2003. Revenue for its fiscal third quarter was $6.2 million compared to $475,000 for the corresponding three-month period in 2002 and $5.6 million for the previous quarter in the current fiscal year. The Company generated net income in the third quarter of $829,000 or $0.06 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share as compared to $117,000 or $0.01 per diluted share for the same period last year and $728,000 or $0.05 per diluted share for the second quarter of the current fiscal year. Gross margins during the current quarter averaged 78 percent compared to 60 percent for the third quarter of the previous year and 81 percent for the previous quarter. Total 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. increased slightly over the previous quarter to $3.7 million from $3.4 million, however, as a percent of revenue it decreased to 59 percent in the third quarter from 61 percent in the second quarter. For the first nine months of the current fiscal year, the Company generated revenue of $15.1 million compared to $1.0 million during the same period of the previous year. Net income for the nine month period ended November 30, 2003 was $2.0 million or $0.14 per diluted share compared to $17,000 for the same period of the previous fiscal year. Chris CHRIS Chemical Hazards Response Information System (US DoD) CHRIS California Historical Resources Information System CHRIS Computerized Human Resources Information System CHRIS Command Human Resources Intelligence System Glover Glov´er n. 1. One whose trade it is to make or sell gloves. Glover's suture a kind of stitch used in sewing up wounds, in which the thread is drawn alternately through each side from within outward. , Auto Data Network's Chairman, commented, "These results are in line with our expectations and we are on track to achieve our projected earnings for the current fiscal year. The success of our private placement completed in early November provided us with the resources to further our expansion." Chris Glover added, "Over the last three months, Auto Data Network entered the next phase of our growth strategy, which is characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by an emphasis on product development. As we continue to advance our strategy of business acquisitions and product integration, our investment in technology will yield a new generation of products and services to support our expanding customer base." Nick Palmer Dr Nicholas Douglas Palmer (born 5 February, 1950, London) is a British politician, Labour Member of Parliament (MP) for Broxtowe and Parliamentary Private Secretary to the Minister of State, Malcolm Wicks. He was first elected as an MP in 1997. , the Company's recently appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. chief executive officer, added, "Auto Data Network has developed a solid track record of profitably amassing successful software and service providers. Any industry as diverse and extensive as the automobile industry automobile industry, the business of producing and selling self-powered vehicles, including passenger cars, trucks, farm equipment, and other commercial vehicles. attracts many participants of all sizes. Considering that the top five providers in this multi-billion dollar industry combine to represent only 15% of the market, the opportunity to achieve a material market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" and develop a superior service offering through industry consolidation is significant." Mr. Palmer palmer: see pilgrim. concluded, "We have recently escalated our investor relations Investor relations The process by which the corporation communicates with its investors. efforts and exposure to the investment community. To forward our commitment to this program, we intend to begin conducting conference calls to discuss Auto Data Network's financial results with the release of its fiscal fourth quarter data in the spring. A notification containing schedule and participation details will be released prior to the conference calls." About Auto Data Network Auto Data Network is a group of established companies that provide software products and services to the automotive industry. The company's main customer base is the auto dealership marketplace. This marketplace consists of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 78,000 dealers in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and 92,000 dealers in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . The company estimates that this
represents a $15 billion market for software and services specifically
for auto dealerships. The company supplies a suite of software solutions
and services that enable dealerships to run their businesses more
efficiently, while achieving considerable cost savings. The majority of
the company's current solutions are focused on serving the
aftermarket AftermarketSee: Secondary market. aftermarket See secondary market. and finance areas of dealerships. These areas are of particular importance as the aftermarket business is responsible for 48% of a dealership's profit, while representing only 12% of its overall revenue. The second most profitable area is vehicle finance and insurance, which contributes 35% of profits from only 2% of revenues. 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. as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. ; general economic conditions; and other risks detailed time to time in the Company's filings with the Securities and Exchange Commission (SEC).
Auto Data Network, Inc.
Consolidated Statements of Financial Condition
As of As of
November 30, February 28,
2003 2003
(Unaudited) (Unaudited)
ASSETS
Current Assets
Cash and equivalents $8,584,760 $722,961
Accounts receivable 6,116,321 867,106
Other accounts receivable 846,215 -
Prepaid expenses 194,505 1,194
Inventories 316,380 -
------------ -----------
Total Current Assets 16,058,181 1,591,261
Accounts receivable due after more than one
year
Other accounts receivable 2,002,898 -
Fixed Assets less accumulated depreciation 470,855 54,159
Intangibles 9,061,064 7,498,181
Goodwill 7,473,108 -
------------ -----------
Total Assets $35,066,106 $9,143,601
============ ===========
LIABILITIES
Current Liabilities
Accounts payable $4,572,844 $1,451,366
Accrued expenses and sundry accounts
payable 537,945 279,683
Short-term loans 24,677 22,583
Short bank borrowing 446,457 289,744
Other current liabilities 826,753 -
------------ -----------
Total Current Liabilities 6,408,676 2,043,376
Other Liabilities
Accrued tax - 488,000
Taxation payable 1,244,217 -
Valued added tax 828,119 -
Long-term liabilities and deferred income 1,117,058 -
------------ -----------
Total Liabilities 9,598,070 2,531,376
------------ -----------
SHAREHOLDERS' EQUITY
Common stock ($.001 par value); authorized
50,000,000 shares; issued and
outstanding 14,839,850 14,840 11,590
Preferred stock 5,328,550 ($.001 par value)
issued and outstanding 5,328 -
Additional paid in capital 23,953,550 7,214,749
Accumulated other income 169,433 61,827
Accumulated surplus/(deficit) 1,324,885 (675,941)
------------ -----------
Total Shareholders' Equity 25,453,196 6,600,635
------------ -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $35,051,266 $9,132,011
============ ===========
Auto Data Network, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended Nine Months Ended
November 30, November 30,
----------------------- ------------------------
2003 2002 2003 2002
----------- ----------- ------------ -----------
Revenue $6,218,593 $474,715 $15,095,548 $1,026,100
Cost of Revenue 1,359,507 191,747 4,062,729 351,531
----------- ----------- ------------ -----------
Gross Margin 4,859,086 282,968 11,032,819 674,569
----------- ----------- ------------ -----------
Operating Expenses
Personnel 1,986,895 - 3,772,629 -
Sales & Marketing 16,252 15,271 159,477 35,300
General &
Administration 1,533,481 50,393 3,831,989 401,652
Depreciation and
Amortization 118,939 6,400 337,188 16,107
----------- ----------- ------------ -----------
Total Operating
Expenses 3,655,567 72,064 8,101,283 453,059
----------- ----------- ------------ -----------
Total Operating
Profit/(Loss) 1,203,519 210,904 2,931,536 221,510
Interest Expense (18,635) (6,021) (73,213) (12,268)
----------- ----------- ------------ -----------
Net Profit/(Loss)
before Tax 1,184,884 204,883 2,858,323 209,242
Provision for Taxation 355,465 87,552 857,497 192,129
----------- ----------- ------------ -----------
Net Profit after Tax $829,419 $117,331 $2,000,826 $17,113
=========== =========== ============ ===========
Net Profit per Share $0.06 $0.01 $0.14 $0.00
Weighted average
number of shares
outstanding 14,614,850 11,552,289 14,389,850 11,552,289
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