Autobytel Announces 2008 Second Quarter Financial Results.Non-Cash, Goodwill Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. Charge Impacts Second Quarter Results Company Posts 24 Percent Year-Over-Year Drop in 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. , Excluding Goodwill Impairment Charge Completes $15 Million Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. Cost Reduction Program IRVINE, Calif. -- Autobytel Inc. (Nasdaq: ABTL ABTL Association Belge des Technologues de Laboratoire ), a leading Internet automotive marketing services company, today announced financial results for the 2008 second quarter ended June 30, 2008. Revenue for the 2008 second quarter was $19.0 million, compared with $21.6 million for the 2007 second quarter. The decline was primarily related to lower advertising revenue, reflecting the previously announced elimination of low quality traffic sources; reduced search engine marketing (SEM) spend during the transition to an outsourced SEM model aimed at generating increased, high quality traffic to Autobytel's Web properties; and lower advertising rates. Lead referral revenue increased approximately 3% for the quarter. Total operating expenses for the 2008 second quarter were $64.5 million including a $52.1 million non-cash goodwill impairment charge. Excluding the impairment charge, operating expenses declined approximately 24% to $12.4 million from $16.2 million in the prior-year period and declined approximately 23% on a sequential basis, excluding a $2.7 million credit to expense related to the company's patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. settlement with Dealix Corporation, which was realized in the first quarter of 2008. For purposes of financial reporting, revenues and expenses related to the company's Retention Performance Marketing (RPM) and Automotive Information Center (AIC AIC Association des Infermières Canadiennes. ) businesses, both divested in 2007, and its AVV AVV Adviesdienst Verkeer en Vervoer AVV Augsburger Verkehrsverbund (German) AVV Aachener Verkehrsverbund GmbH (German) AVV Aruba Exempt Company business, which was sold in the first quarter of 2008, have been accounted for in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . The loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , including the impairment charge, was $57.4 or $1.30 per share, for the 2008 second quarter, compared with a loss from continuing operations of $6.9 million, or $0.16 per share, for the 2007 second quarter. Autobytel's second quarter financial results reflect a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of $52.1 million for goodwill impairment. In accordance with Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 142, goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. with indefinite lives are not subject to amortization but are tested for impairment annually, or whenever events or changes in circumstances indicate that the asset might be impaired. As of June 30, 2008 the company performed its annual impairment test by comparing the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of Autobytel to its estimated fair value using discounted cash flow and market methods of determining fair value. As a result of this testing, a non-cash impairment charge of $52.1 million was recorded at June 30, 2008. The impairment is a result of the company's stock price decline in the second quarter 2008, which caused its market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. to fall below its book value of equity. This non-recurring, non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) is reflected on a separate line within operating expenses on the company's statement of operations See Income statement. . Autobytel reported a loss from continuing operations of $5.3 million, excluding the goodwill impairment charge of $52.1 million, compared with a loss from continuing operations of $6.9 million for the 2007 second quarter. Non-cash share-based compensation expense was $0.7 million and $1.0 million, respectively, for the second quarters of 2008 and 2007. Net loss for the second quarter of 2008 was $57.3 million, or $1.30 per share, including the impairment charge, compared with a net loss of $2.0 million, or $0.05 per share, for the second quarter of 2007, including $4.8 million in income from discontinued operations. Cash, cash equivalents and short-term investments rose to $36.4 million at June 30, 2008, compared with $28.3 million at December 31, 2007. Cash used in operations for the first six months of 2008 equaled $12.3 million versus $1.9 million in the first six months of 2007. The primary cause of the change was the timing of the proceeds from the Dealix patent litigation settlement. In the second quarter of 2008, cash used in operations before working capital adjustments and capital expenditures, and excluding the patent litigation settlement, improved by $3.4 million from the first quarter of 2008. "We have removed more than $15 million in annualized expenses from our business," said Jim Riesenbach, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Autobytel. "Although we did not meet our previously stated operating metric goal of reaching cash flow breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations , before working capital and capital expenditure requirements, by the end of the second quarter, we continue our focus on ensuring that Autobytel is operating as efficiently as possible, and are hopeful that the company will reach this goal by the end of this year." "As the current automotive and economic environment evolves, we believe that the automotive Internet provides auto retailers and manufacturers with their most cost-efficient and measurable marketing opportunities," said Riesenbach. "We continue to work diligently on attracting new users to our Web properties, while enhancing the value of our products to meet the growing demand of automotive marketers in the online arena." [TABLE OMITTED] Non-GAAP Financial Measures Cash used in operations before working capital adjustments and capital expenditures is a non-GAAP measure and is defined as net loss, adjusted for non-cash items as presented in the consolidated condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. statements of cash flows, and adjusted for the cash flows associated with the patent litigation settlement. Autobytel has also disclosed operating expenses and loss from continuing operations excluding the goodwill impairment charge and the Dealix patent litigation settlement amounts. These amounts are also non-GAAP measures. These non-GAAP measures are not meant to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), but rather are meant to provide useful information to investors interested in comparing Autobytel's performance between periods. The reconciliations of these non-GAAP measures to the GAAP financial measures that Autobytel considers most comparable are included herein. Conference Call Autobytel management will host a conference call today at 9:00 a.m. ET/6:00 a.m. PT to discuss its 2008 second quarter financial results. The conference call will be available to all interested parties through a live webcast at www.autobytel.com (click on "Investor Relations Investor relations The process by which the corporation communicates with its investors. " and then click on "Conference Calls"). Please visit the website at least 15 minutes prior to the start of the call to register and download any necessary software. For those unable to listen to the live broadcast, the call will be archived for one year on Autobytel's website. A telephone replay of the call will also be available for approximately one week by dialing (800) 642-1687 (domestic) or (706) 645-9291 (international) and entering conference ID57192378. About Autobytel Inc. Since launching the first car-buying website in 1995, Autobytel Inc.'s (Nasdaq:ABTL) mission has been to empower automotive consumers with the tools and information they need to make smart, well-informed vehicle purchasing and ownership decisions. The company has helped millions of car shoppers and generated billions of dollars in car sales for dealers. Today, the company's innovative, consumer-driven site, MyRide.com, expands the company's mission across the automotive purchase and ownership life cycle. As the first vertical search experience for the automotive marketplace, MyRide.com is designed to help Internet-savvy consumers FIND, SEE, BUY and LEARN anything automotive and BELONG to a diverse community of people who have similar automotive interests. By providing a convenient and comprehensive automotive consumer experience across the purchase and ownership lifecycle, Autobytel provides new value and touch-points for automotive marketers. Through MyRide.com and Autobytel's marketing network, the company connects dealerships with a steady stream of motivated, serious shoppers, while providing both dealers and manufacturers with precision-targeted brand and product marketing opportunities. The company's advanced web-based advertising and marketing programs also help dealers and manufacturers build relationships with customers, as well as help them to efficiently manage and convert online business. Forward-Looking Statement 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. Disclaimer The statements contained in this press release that are not historical facts are forward-looking statements under the federal securities laws, including, but not limited to, attaining cash flow breakeven, before working capital and capital expenditure requirements, by the end of 2008, our ability to attract new users to our Web properties , our ability to enhance the value of our products to automotive marketers and the expected impact on our business and results of operations. These forward-looking statements are not guarantees of future performance and involve certain assumptions and certain risks and uncertainties that are difficult to predict. Actual outcomes and results may differ materially from what is expressed in, or implied by, such 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 economic impact of terrorist attacks or military actions, increased dealer attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: , 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, that actual costs and expenses exceed the 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 our Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2007 and other filings with the Securities and Exchange Commission for a discussion of risks and uncertainties that could affect operating results and the market price of our stock. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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