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Aug 08, 2005

Autobytel Inc. Files Form 10-Q Quarterly Report with the SEC and Reports Second Quarter Results



IRVINE, Calif. - August 8, 2005 -- Autobytel Inc. (Nasdaq: ABTL), a leading Internet automotive marketing services company, today announced it filed with the Securities and Exchange Commission its Form 10-Q Quarterly Report for the second quarter ended June 30, 2005.

"Autobytel has completed the difficult and time-consuming process of the internal review and restatement of our financial statements. The Company's results in the second quarter were clearly impacted by this process," said Autobytel President and CEO Rick Post. "Over the past quarter, the new management team has evaluated the current state of the business and we are taking actions that are designed to grow revenue and reduce costs. We are enthusiastic about future business opportunities."

Summary of the Quarter Ended June 30, 2005:

Revenue for the second quarter was $31.4 million, of which $19.7 million was related to Lead fees; $4.5 million was related to Advertising; $6.0 million was related to CRM services, and $1.1 million was related to Data, Applications and Other.

Operating expenses, which include costs associated with the internal review, restatements and audits of the Company's consolidated financial statements, were $34.9 million in the second quarter. Net loss for the second quarter was $3.3 million, or $0.08 per fully diluted share.

The Company delivered approximately 0.9 million purchase requests in the second quarter. Of these, approximately 0.6 million were delivered to retail dealers and approximately 0.3 million were delivered to enterprise dealers. The total number of purchase requests delivered to retail and enterprise dealers in the second quarter of 2005 declined by 0.1 million compared to the first quarter of 2005. Additionally, the Company delivered 0.2 million finance leads in the second quarter.

As of June 30, 2005, the Company had approximately 6,100 retail dealer relationships (including approximately 260 suspended dealers), approximately 680 enterprise dealer relationships, and five direct relationships, encompassing 15 brands with automotive manufacturers or their automotive buying service affiliates, representing up to approximately 17,000 enterprise dealer relationships.

CRM customer relationships consisted of approximately 2,900 Web Control and approximately 760 Retention Performance Marketing® (RPM®) relationships.

Domestic cash, cash equivalents, and short-term and long-term investments totaled $45.1 million as of June 30, 2005, a reduction of $7.1 million from March 31, 2005. Net cash used in operations was $6.4 million in the second quarter of 2005. The decrease is primarily due to payments associated with the internal review, restatements and audits of the Company's consolidated financial statements, annual insurance premiums, and a contract dispute settlement, all of which totaled approximately $8.6 million.

Business Outlook

"We are pleased to be moving forward with our business and are particularly excited about our recently announced co-branding relationships with Bankrate, and Viacom," continued Post. "We believe that these deals, in combination with our initiatives in search engine optimization, will help drive page views, build our brand equity and deliver the highest quality purchase requests to our dealer and automotive manufacturer customers. We look forward to forming more strategic partnerships of this nature."

"As the Automotive Internet continues to evolve, it is critical that Autobytel focuses on quality and evolves its marketing programs ahead of the competitive curve. We believe that we have the products and programs to provide value, efficiencies and strong ROI for dealers and automotive manufacturers throughout the customer life cycle - from customer generation to customer retention," concluded Post.

On a going forward basis, the Company estimates that revenue for the full fiscal year 2005 will be in the range of $126 to $130 million.

Conference Call

A conference call to discuss second quarter 2005 financial results will be web cast live on Wednesday, August 10, 2005, at 4:30 PM Eastern Time. Participants may listen to a webcast of the live conference call over the Internet by visiting the investor relations section of the Company's Web site located at: Below is a direct link to the registration page. Please go to the Web site at least ten minutes prior to the call to register, download, and install any necessary audio software.

A replay number is available beginning at 7:30 p.m. Eastern Time (4:30 p.m. Pacific Time). The replay of the conference call may be accessed by dialing (800) 642-1687 or (706) 645-9291 for international callers. The conference ID for the replay is 8377645.

About Autobytel

Autobytel Inc. (Nasdaq: ABTL), a leading Internet automotive marketing services company, helps retailers sell cars and manufacturers build brands through marketing, advertising, data and CRM (customer relationship management) products and programs. The Company owns and operates the automotive websites,,,,,, and, as well as AIC (Automotive Information Center), a trusted industry source of automotive marketing data and technology for over 20 years. Autobytel is also a leader in dealership lead management and CRM solutions and owns and operates AVV, Inc., a top provider of dealership CRM and sales management products, and Retention Performance Marketing, Inc., (RPM®), which powers dealerships with cutting-edge customer loyalty and retention marketing programs. Autobytel was the most visited new car buying and research destination in 2004, reaching millions of car shoppers as they made their vehicle buying decisions. Autobytel Inc. is the only company to achieve top rankings for both its lead management and lead generation services among the nation's top 100 Internet dealers.


The statements contained in this press release that are not historical facts are forward-looking statements under the federal securities laws. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions 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, pressure on dealer fees, increased or unexpected competition, the failure to realize anticipated synergies from acquired entities, costs related to acquisitions, failure to retain key employees at acquired entities, difficulties in successfully integrating the businesses and technologies of acquired entities and Autobytel, that actual costs and expenses exceed the charges taken by Autobytel, changes in laws and regulations, costs of 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 for the year ended December 31, 2004, 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.


Autobytel Inc.
Jennifer Klein (Investors)
(949) 862-1362

Melanie Webber (Media)
(949) 862-3023

                            Autobytel Inc.
        (Amounts in thousands, except share and per share data)


                                                June 30,  December 31,
                                                  2005        2004
Current assets:
  Domestic cash and cash equivalents            $27,085      $24,287
  Restricted international cash and cash
   equivalents                                    8,631        9,053
  Short-term investments                         12,000       16,500
  Accounts receivable, net of allowance for
   bad debts and customer credits of $1,147
   and $1,037, respectively                      19,238       17,920
  Prepaid expenses and other current assets       3,072        2,344
     Total current assets                        70,026       70,104
Long-term investments                             6,000       12,000
Property and equipment, net                       3,594        3,389
Capitalized internal use software, net               90          225
Goodwill                                         70,697       70,697
Acquired intangible assets, net                   3,211        4,187
Other assets                                        110          115
     Total assets                              $153,728     $160,717


Current liabilities:
  Accounts payable                               $6,844       $5,812
  Accrued expenses                                6,498        7,990
  Current portion of deferred revenues            4,186        4,029
  Accrued domestic restructuring                      -           74
  Other current liabilities                       2,185        2,216
     Total current liabilities                   19,713       20,121
Long-term deferred revenues                           1            8
     Total liabilities                           19,714       20,129

Minority interest                                 4,338        4,521

Commitments and contingencies

Stockholders' equity:
  Preferred stock, $0.001 par value;
   11,445,187 shares authorized, none
   outstanding                                        -            -
  Common stock, $0.001 par value; 200,000,000
   shares authorized; 41,911,163 and
   41,905,848 shares issued and outstanding,
   respectively                                      42           42
  Additional paid-in capital                    282,303      282,287
  Accumulated other comprehensive income          1,785        2,099
  Accumulated deficit                          (154,454)    (148,361)
     Total stockholders' equity                 129,676      136,067
     Total liabilities, minority interest
      and stockholders' equity                 $153,728     $160,717

                            Autobytel Inc.
             (Amounts in thousands, except per share data)


                              Three Months Ended      Six Months Ended
                                    June 30,              June 30,
                                2005       2004       2005       2004

Revenues                     $31,385    $31,122    $64,713    $55,740

Costs and expenses:
  Cost of revenues            12,682     12,891     26,069     23,416
  Sales and marketing          7,008      6,998     15,090     13,083
  Product and technology
   development                 6,279      5,450     12,350      9,810
  General and
   administrative              8,539      4,514     16,867      7,533
  Amortization of acquired
   intangible assets             354        304        814        331
     Total costs and
      expenses                34,862     30,157     71,190     54,173
  Income (loss) from
   operations                 (3,477)       965     (6,477)     1,567

Interest income                  389        219        738        405
Loss in equity investee            -          -          -        (84)
Foreign currency exchange
 gain                              8         20         10         20
Other income                       -          -          -          1
Minority interest                (76)       (47)       (93)       (47)
  Income (loss) before
   income taxes               (3,156)     1,157     (5,822)     1,862
Provision for income taxes      (127)      (171)      (271)      (200)
  Net income (loss)          $(3,283)      $986    $(6,093)    $1,662

Net income (loss) per
  Basic                       $(0.08)     $0.02     $(0.15)     $0.04
  Diluted                     $(0.08)     $0.02     $(0.15)     $0.04

Shares used in computing
 net income (loss) per
  Basic                   41,906,851 41,123,593 41,906,352 39,733,775
  Diluted                 41,906,851 44,708,634 41,906,352 43,656,782

Comprehensive income
  Net income (loss)          $(3,283)      $986    $(6,093)    $1,662
  Translation adjustment         249        (77)       314         67
     Comprehensive income
      (loss)                 $(3,034)      $909    $(5,779)    $1,729

                            Autobytel Inc.
                        (Amounts in thousands)


                                                     Six Months Ended
                                                          June 30,
                                                       2005      2004
Cash flows from operating activities:
  Net income (loss)                                 $(6,093)   $1,662
  Adjustments to reconcile net income
   (loss) to net cash provided by
   (used in) operating activities:
    Non-cash charges:
      Depreciation and amortization                     855       801
      Amortization of capitalized internal use
       software                                         193       540
      Amortization of acquired intangible assets        957       418
      Impairment of acquired intangible assets           19         -
      Provision for (recovery of) bad debt              342      (240)
      Provision for customer credits                  1,482       584
      Loss on disposal of property and equipment          2        20
      Loss on equity investee                             -        84
      Minority interest                                  93        47
    Changes in assets and liabilities, excluding
     the effect of acquisitions and
     consolidation of Autobytel.Europe:
      Accounts receivable                            (3,142)   (1,243)
      Prepaid expenses and other current assets        (728)     (423)
      Other assets                                        5        13
      Accounts payable                                1,032     1,637
      Accrued expenses                               (1,492)   (1,362)
      Deferred revenues                                 150      (524)
      Accrued domestic restructuring                    (74)      (90)
      Accrued international licensee liabilities          -    (1,541)
      Other current liabilities                         (31)      307
        Net cash provided by (used in) operating
         activities                                  (6,430)      690
Cash flows from investing activities:
  Acquisitions of businesses, net of cash acquired        -   (20,631)
  Sales and maturities of short-term and
   long-term investments                             18,600    17,991
  Purchases of short-term and long-term
   investments                                       (8,100)  (39,500)
  Redemptions of long-term investments                    -     9,000
  Changes in restricted international cash and
   cash equivalents                                    (168)    2,038
  Capitalized internal use software costs               (58)        -
  Purchases of property and equipment                (1,068)     (923)
  Proceeds from sale of property and equipment            6         -
        Net cash provided by (used in)
         investing activities                         9,212   (32,025)
Cash flows from financing activities:
  Payments of capital lease obligations                   -      (225)
  Net proceeds from sale of common stock                 16     3,657
        Net cash provided by financing activities        16     3,432
Net increase (decrease) in cash and cash
 equivalents                                          2,798   (27,903)
Cash and cash equivalents, beginning of period       24,287    45,643
Cash and cash equivalents, end of period            $27,085   $17,740
Supplemental disclosure of cash flow information:
  Cash paid during the period for income taxes         $534       $69
  Cash refunded during the period for interest           $-       $(1)