Press Release
AutoWeb Reports Second Quarter 2019 Results
Second Quarter 2019 Financial Summary
- Total revenues were
$27.1 million compared to$31.6 million in Q1’19 and$29.3 million in Q2’18. - Advertising revenues were
$5.4 million compared to$5.9 million in Q1’19 and$6.9 million in Q2’18. - Gross margin increased to 19.8% compared to 18.2% in Q1’19 and 18.9% in Q2’18.
- Net loss was
$5.0 million or$(0.38) per share, compared to a net loss of$5.4 million or$(0.41) per share in Q1’19 and a net loss of$5.2 million or$(0.41) per share in Q2’18. - Adjusted EBITDA was
$(2.1) million compared to$(3.0) million in Q1’19 and$(2.2) million in Q2’18.
Second Quarter 2019 Key Operating Metrics 1
- Lead traffic was 33.1 million visits compared to 43.2 million in Q1’19 and 34.0 million in Q2’18.2
- Lead volume was 1.8 million compared to 2.1 million in Q1’19 and 1.7 million in Q2’18.3
- Retail dealer count was 2,510 compared to 2,360 in Q1’19 and 2,550 in Q2’18.4
- Retail lead capacity was 142,000 lead targets compared to 138,000 in Q1’19 and 147,000 in Q2’18.5
- Click traffic was 13.2 million visits compared to 16.0 million in Q1’19 and 12.8 million in Q2’18. 6
- Click volume was 5.3 million clicks compared to 6.2 million in Q1’19 and 4.7 million in Q2’18.7
- Revenue per click was
$0.75 compared to$0.72 in Q1’19 and$0.82 in Q2’18. 8
__________________
1 Certain website properties have been added and removed from tracking metrics as
2 Lead traffic = total visits to AutoWeb’s owned lead websites.
3 Lead volume = total new and used vehicle leads invoiced to retail and wholesale customers.
4 Retail dealer count = the number of franchised dealers contracted for delivery of retail new vehicle leads plus the number of vehicle dealers (franchised or independent) contracted for delivery of retail used vehicle leads.
5 Retail lead capacity = the number of new and used vehicle leads contracted for by new or used retail vehicle dealers that the dealers wish to receive each month (i.e., “targets”) at the end of the applicable quarter.
6 Click traffic = total visits to AutoWeb’s owned click referral websites.
7 Click Volume = the number of times during the applicable quarter that consumers clicked on advertisements on AutoWeb’s click referral websites.
8 Revenue per click = total click revenue divided by click volume.
Management Commentary
“We continued to make strides in our turnaround efforts during the second quarter, highlighted by our second consecutive quarter of gross margin expansion,” said
“As we mentioned on the last quarterly update, we have been highly focused on restructuring our fixed operating model to become a leaner, more profitable organization. In connection with these efforts, we have continued to shift various company functions and operations from our office in
“Looking forward to the back half of the year, we will continue to diligently focus on margin and profitability through our various strategic initiatives. We remain on track to hit our inflection later this year, and continue to expect revenue growth and profitability for 2019.”
Second Quarter 2019 Financial Results
Total revenues in the second quarter of 2019 were
Gross profit in the second quarter was
Total operating expenses in the second quarter were
Net loss in the second quarter of 2019 improved to
Adjusted EBITDA was
At
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International dial-in number: 1-404-991-3925
Conference ID: 9521818
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Tax Benefit Preservation Plan
At
The Plan was adopted by the company’s board of directors to preserve the company’s NOLs and other tax attributes, and thus reduce the risk of a possible change of ownership under Section 382 of the Internal Revenue Code. Any such change of ownership under Section 382 would limit or eliminate the ability of the company to use its existing NOLs for federal income tax purposes. In general, an ownership change will occur if the company’s 5% shareholders, for purposes of Section 382, collectively increase their ownership in the company by an aggregate of more than 50 percentage points over a rolling three-year period. The Plan is designed to reduce the likelihood that the company experiences such an ownership change by discouraging any person or group from becoming a new 5% shareholder under Section 382. Rights issued under the Plan could be triggered upon the acquisition by any person or group of 4.9% or more of the company’s outstanding common stock and could result in substantial dilution of the acquirer’s percentage ownership in the company. There is no guarantee that the Plan will achieve the objective of preserving the value of the company’s NOLs.
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Note about Non-GAAP Financial Measures
The company’s management believes that presenting Adjusted EBITDA provides useful information to investors regarding the underlying business trends and performance of the company’s ongoing operations, as well as providing for more consistent period-over-period comparisons. This non-GAAP measure assists management in its operational and financial decision-making and monitoring the company’s performance. In addition, we use Adjusted EBITDA as a measure for determining incentive compensation targets. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the company’s consolidated financial statements in their entirety and to not rely on any single financial measure.
Forward-Looking Statements Disclaimer
The statements contained in this press release or that may be made during the conference call described above that are not historical facts are forward-looking statements under the federal securities laws. Words such as “anticipates,” “could,” “may,” “estimates,” “expects,” “projects,” “intends,” “pending,” “plans,” “believes,” “will” and words of similar substance, or the negative of those words, used in connection with any discussion of future operations or financial performance identify forward-looking statements. In particular, statements regarding expectations and opportunities, new product expectations and capabilities, projections, statements regarding future events, and our outlook regarding our performance and growth are forward-looking statements. These forward-looking statements, including, that (i) the company will continue to diligently focus on margin and profitability through our various strategic initiatives in the back half of 2019; (ii) the company remains on track to hit its inflection later this year, and continues to expect revenue growth and profitability for 2019; (iii) the company plans to maintain its presence in
Company Contact
Chief Financial Officer
1-949-437-4651
jp.hannan@autoweb.com
Investor Relations Contact:
Gateway Investor Relations
1-949-574-3860
AUTO@gatewayir.com
AUTOWEB, INC. | |||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
(Amounts in thousands, except share and per share data) | |||||||||
June 30, | December 31, | ||||||||
2019 | 2018 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 1,431 | $ | 13,600 | |||||
Restricted cash | 5,016 | - | |||||||
Accounts receivable, net of allowances for bad debts and customer credits of $553 and $566 at June 30, 2019 and December 31, 2018, respectively | 23,331 | 26,898 | |||||||
Prepaid expenses and other current assets | 1,655 | 1,245 | |||||||
Total current assets | 31,433 | 41,743 | |||||||
Property and equipment, net | 3,405 | 3,181 | |||||||
Right-of-use assets | 3,301 | - | |||||||
Intangibles assets, net | 9,291 | 11,976 | |||||||
Other assets | 819 | 516 | |||||||
Total assets | $ | 48,249 | $ | 57,416 | |||||
LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 15,627 | $ | 17,572 | |||||
Accrued employee-related benefits | 2,391 | 3,125 | |||||||
Other accrued expenses and other current liabilities | 2,064 | 2,204 | |||||||
Current portion of lease liabilities | 1,552 | - | |||||||
Current convertible note payable | - | 1,000 | |||||||
Total current liabilities | 21,634 | 23,901 | |||||||
Lease liabilities, net of current portion | 1,894 | - | |||||||
Total liabilities | 23,528 | 23,901 | |||||||
Commitments and contingencies | |||||||||
Stockholders' equity | |||||||||
Preferred stock, $0.001 par value; 11,445,187 shares authorized Series A Preferred stock, none issued and outstanding | - | - | |||||||
Common stock, $0.001 par value; 55,000,000 shares authorized; 13,146,831 and 12,960,450 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively | 13 | 13 | |||||||
Additional paid-in capital | 362,737 | 361,218 | |||||||
Accumulated deficit | (338,029 | ) | (327,716 | ) | |||||
Total stockholders' equity | 24,721 | 33,515 | |||||||
Total liabilities, minority interest and stockholders' equity | $ | 48,249 | $ | 57,416 | |||||
AUTOWEB, INC. | ||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
AND COMPREHENSIVE LOSS | ||||||||||||||||||
(Amounts in thousands, except share and per share data) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2019 |
2018 | 2019 | 2018 | |||||||||||||||
Revenues: | ||||||||||||||||||
Lead fees | $ | 21,691 | $ | 22,211 | $ | 47,389 | $ | 46,291 | ||||||||||
Advertising | 5,432 | 6,950 | 11,310 | 15,037 | ||||||||||||||
Other | 19 | 131 | 47 | 313 | ||||||||||||||
Total revenues | 27,142 | 29,292 | 58,746 | 61,641 | ||||||||||||||
Cost of revenues | 21,758 | 23,765 | 47,605 | 48,423 | ||||||||||||||
Gross profit | 5,384 | 5,527 | 11,141 | 13,218 | ||||||||||||||
Operating Expenses | ||||||||||||||||||
Sales and marketing | 2,956 | 3,052 | 5,834 | 6,764 | ||||||||||||||
Technology support | 2,182 | 2,965 | 4,962 | 6,351 | ||||||||||||||
General and administrative | 4,026 | 3,765 | 8,316 | 8,340 | ||||||||||||||
Depreciation and amortization | 1,201 | 1,163 | 2,440 | 2,323 | ||||||||||||||
Goodwill impairment | - | - | - | 5,133 | ||||||||||||||
Total operating expenses | 10,365 | 10,945 | 21,552 | 28,911 | ||||||||||||||
Operating loss | (4,981 | ) | (5,418 | ) | (10,411 | ) | (15,693 | ) | ||||||||||
Interest and other income (expense), net | 33 | 201 | 103 | 201 | ||||||||||||||
Loss before income tax provision | (4,948 | ) | (5,217 | ) | (10,308 | ) | (15,492 | ) | ||||||||||
Income taxes provision | 5 | - | 5 | 4 | ||||||||||||||
Net loss and comprehensive loss | $ | (4,953 | ) | $ | (5,217 | ) | $ | (10,313 | ) | $ | (15,496 | ) | ||||||
Basic and diluted loss per share: | ||||||||||||||||||
Basic loss per common share | $ | (0.38 | ) | $ | (0.41 | ) | $ | (0.79 | ) | $ | (1.22 | ) | ||||||
Diluted loss per common share | $ | (0.38 | ) | $ | (0.41 | ) | $ | (0.79 | ) | $ | (1.22 | ) | ||||||
Shares used in computing net loss per share: | ||||||||||||||||||
Basic | 13,111 | 12,726 | 13,018 | 12,672 | ||||||||||||||
Diluted | 13,111 | 12,726 | 13,018 | 12,672 | ||||||||||||||
AUTOWEB, INC. | ||||||||
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||
(amounts in thousands) | ||||||||
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Cash flows from operating activities: | ||||||||
Net (loss) income | (10,313 | ) | (15,496 | ) | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
Depreciation and amortization | 3,509 | 4,360 | ||||||
Goodwill impairment | - | 5,133 | ||||||
Provision for bad debt | 122 | 146 | ||||||
Provision for customer credits | 120 | 153 | ||||||
Share-based compensation | 1,111 | 2,569 | ||||||
Right-of-use assets | 924 | - | ||||||
Lease Liabilities | (924 | ) | - | |||||
Gain on sale of investment | - | (125 | ) | |||||
Long-lived asset impairment | - | 692 | ||||||
Changes in assets and liabilities | ||||||||
Accounts receivable | 3,325 | 1,548 | ||||||
Prepaid expenses and other current assets | (410 | ) | 428 | |||||
Other non-current assets | (303 | ) | (632 | ) | ||||
Accounts payable | (1,945 | ) | 2,058 | |||||
Accrued expenses and other current liabilities | (787 | ) | 437 | |||||
Net cash (used in) provided by operating activities | (5,571 | ) | 1,271 | |||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (990 | ) | (392 | ) | ||||
Proceeds from sale of investment | - | 125 | ||||||
Net cash (used in) provided by investing activities | (990 | ) | (267 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of common stock | - | 200 | ||||||
Borrowings under revolving credit facility | 16,940 | - | ||||||
Principal payments under revolving credit facility | (16,940 | ) | (8,000 | ) | ||||
Payments on convertible note | (1,000 | ) | - | |||||
Proceeds from exercise of stock options | 408 | 74 | ||||||
Net cash (used in) provided by financing activities | (592 | ) | (7,726 | ) | ||||
Net decrease in cash and cash equivalents and restricted cash | (7,153 | ) | (6,722 | ) | ||||
Cash and cash equivalents and restricted cash at beginning of period | 13,600 | 24,993 | ||||||
Cash and cash equivalents and restricted cash at end of period | 6,447 | 18,271 | ||||||
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | ||||||||
Cash and cash equivalents at beginning of period | $ | 13,600 | 24,993 | |||||
Restricted cash at beginning of period | - | - | ||||||
Cash and cash equivalents and restricted cash at beginning of period | $ | 13,600 | $ | 24,993 | ||||
Cash and cash equivalents at end of period | $ | 1,431 | 18,271 | |||||
Restricted cash at end of period | $ | 5,016 | - | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 6,447 | $ | 18,271 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for income taxes | 1 | - | ||||||
Cash refunds for income taxes | 124 | - | ||||||
Cash paid for interest | 40 | 73 | ||||||
AUTOWEB, INC. | ||||||||||||||||||||||||
RECONCILIATION OF ADJUSTED EBITDA | ||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
Three Months Ended | Three Months Ended | Six Months Ended | ||||||||||||||||||||||
March 31, 2019 |
March 31, 2018 |
June 30, 2019 |
June 30, 2018 |
June 30, 2019 |
June 30, 2018 |
|||||||||||||||||||
Net loss | $ | (5,360 | ) | $ | (10,279 | ) | $ | (4,953 | ) | $ | (5,217 | ) | $ | (10,313 | ) | $ | (15,496 | ) | ||||||
Depreciation and amortization | 1,787 | 2,179 | 1,723 | 2,181 | 3,510 | 4,360 | ||||||||||||||||||
Interest income | (6 | ) | (6 | ) | (20 | ) | (7 | ) | (26 | ) | (13 | ) | ||||||||||||
Interest expense | 5 | 88 | 56 | 15 | 61 | 103 | ||||||||||||||||||
Income taxes | - | 4 | 5 | - | 5 | 4 | ||||||||||||||||||
EBITDA | (3,574 | ) | (8,014 | ) | (3,189 | ) | (3,028 | ) | (6,763 | ) | (11,042 | ) | ||||||||||||
Non-cash stock compensation expense | 551 | 1,626 | 560 | 942 | 1,111 | 2,568 | ||||||||||||||||||
Gain (loss) on investment | - | - | - | (125 | ) | - | (125 | ) | ||||||||||||||||
Goodwill impairment | - | 5,133 | - | - | - | 5,133 | ||||||||||||||||||
Personnel Restructuring | - | 950 | 496 | 15 | 496 | 965 | ||||||||||||||||||
Adjusted EBITDA | $ | (3,023 | ) | $ | (305 | ) | $ | (2,133 | ) | $ | (2,196 | ) | $ | (5,156 | ) | $ | (2,501 | ) | ||||||
Source: AutoWeb, Inc.