UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 1,
2020
AutoWeb, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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1-34761
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33-0711569
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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400 North Ashley Drive, Suite 300
Tampa, Florida 33602-4314
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(Address
of principal executive offices) (Zip Code)
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(949) 225-4500
Registrant’s
telephone number, including area code
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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AUTO
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The Nasdaq Capital Market
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
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Emerging growth company
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
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Item
5.02
Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
April 6, 2020, AutoWeb, Inc.
(“Company”
or “AutoWeb”)
announced that it has implemented a series of cost reduction
actions in response to the COVID-19 pandemic, including a reduction
in the monthly base salaries of its executive officers for the
period from April 1, 2020 to June 30, 2020 (“Reduction Period”). The following
are the percentage reductions in monthly base salaries for the
Company’s named executive officers:
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Jared R. Rowe,
President and Chief Executive Officer--a 30% reduction
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Glenn E. Fuller,
Executive Vice President, Chief Legal Officer and Secretary--a 10%
reduction
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Joseph P. Hannan,
Executive Vice President, Chief Financial Officer--a 10%
reduction
Mr.
Rowe also agreed to forego his $15,000 per month travel and housing
allowance during the Reduction Period.
The
full monthly base salaries of the Company’s executives will
be reinstated effective July 1, 2020 unless the reductions are
extended, and the reduction amounts will be payable in the event a
change in control of the Company occurs during 2020. The other
elements of these executives’ compensation are
unchanged.
In addition, the Compensation Committee of the Board of Directors
of the Company has elected to reduce the cash meeting fees and
quarterly retainer for the Board of Director’s independent
outside directors by 50% for the Reduction Period.
Item
7.01.
Regulation FD Disclosure.
The
disclosure set forth in Item 5.02 above is incorporated by
reference into and furnished under this Item 7.01.
In
addition to compensation reductions for our Chief Executive Officer
and other named executive officers and the reduction to the Board
of Directors cash meeting and quarterly retainer fees described
above under Item 5.02, the Company has also announced on April 6,
2020 the following additional cost reduction actions in response to
the COVID-19 pandemic:
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Reduced
recruitment, travel, consulting and business-to-business marketing
expenses;
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Consolidation of
various technology tools and products; and
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Limited employee
furloughs and staff reductions.
The
Company expects that the announced cost reductions will save the
Company approximately $1.6 million in cash expenditures in calendar
year 2020.
In
accordance with General Instruction B.2 of Form 8-K, the
information under this Item 7.01, including Exhibit 99.1, shall not
be deemed “filed” for the purposes of Section 18
of the Exchange Act or otherwise subject to the liabilities of that
section, nor shall such information, including Exhibit 99.1, be
deemed incorporated by reference in any filing under the Securities
Act or the Securities Exchange Act, except as shall be expressly
set forth by specific reference in such filing.
The
statements contained in this Current Report on Form 8-K 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 the Company expects the cost reductions to save
approximately
$1.6 million in cash expenditures in calendar year 2020, are not
guarantees of future performance and involve assumptions and risks
and uncertainties that are difficult to predict. Actual outcomes
and results may differ materially from what is expressed in, or
implied by, these forward-looking statements. AutoWeb 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 the responses of federal and state
government to the COVID-19 pandemic, changes in general economic
conditions; the financial condition of automobile manufacturers and
dealers; disruptions in automobile production; changes in fuel
prices; the economic impact of terrorist attacks, political
revolutions or military actions; failure of our internet security
measures; dealer attrition; 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; actual costs and expenses exceeding
charges taken by AutoWeb; changes in laws and regulations; costs of
legal matters, including, defending lawsuits and undertaking
investigations and related matters; and other matters disclosed in
AutoWeb’s filings with the Securities and Exchange
Commission. Investors are strongly encouraged to review the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2019 and other filings with the Securities and
Exchange Commission for a discussion of risks and uncertainties
that could affect the business, operating results or financial
condition of AutoWeb and the market price of the Company’s
stock.
Item
9.01
Financial
Statements and Exhibits.
(d)
Exhibits
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Press
Release dated April 6, 2020.
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date:
April 6, 2020
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AUTOWEB,
INC.
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By:
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/s/
Glenn E. Fuller
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Glenn
E. Fuller, Executive Vice President, Chief Legal Officer and
Secretary
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Exhibit 99.1
AutoWeb Implements Cost Reductions in Response to COVID-19,
Including Voluntary Executive Salary Reductions
Cost Reductions Expected to Save $1.6 Million in 2020
TAMPA, FL – April 6, 2020 – AutoWeb, Inc.
(Nasdaq: AUTO), a robust digital marketing platform providing
advertising solutions for automotive dealers and OEMs, has
implemented a series of cost actions in response to COVID-19,
including reduced executive and board compensation to mitigate the
financial impact to other members of the team. The cost reductions
are expected to save approximately $1.6 million in cash
expenditures in 2020.
Cost Actions
●
Reduced
recruitment, travel, consulting and B2B marketing
expenses
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Consolidation of
various technology tools and products
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Voluntary executive
salary reductions for the second quarter
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CEO Jared Rowe has
taken a 30% salary reduction
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All other members
of the executive team have taken a 10% salary
reduction
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The board of
directors have taken a voluntary 50% compensation reduction for the
second quarter
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Limited employee
furloughs and staff reductions
“As discussed on last
week’s earnings call, we have begun to implement various cost
reductions in response to COVID-19,” said CEO Jared Rowe.
“To mitigate the financial impact to our broader team, all
executives and board members have taken a voluntary pay cut. We are
also implementing furloughs and layoffs with a targeted approach so
that we can support as many team members as we can during these
challenging times, while minimizing business disruption in serving
our dealer and OEM customers. Our priority in designing this
workforce plan is to allow for continued access to healthcare for
team members during this public health crisis, as well as managing
our operating costs given the rapidly developing impacts to the
automotive industry. We will continue to evaluate other cost
reduction measures and explore all options and government subsidies
to maximize employment for our team, including participation in the
federal government’s Paycheck Protection
Program.”
About AutoWeb, Inc.
AutoWeb,
Inc. provides high-quality consumer leads, clicks and associated
marketing services to automotive dealers and manufacturers
throughout the United States. The company also provides consumers
with robust and original online automotive content to help them
make informed car-buying decisions. The company pioneered the
automotive Internet in 1995 and has since helped tens of millions
of automotive consumers research vehicles; connected thousands of
dealers nationwide with motivated car buyers; and has helped every
major automaker market its brand online.
Investors
and other interested parties can receive AutoWeb news alerts by
accessing the online registration form at investor.autoweb.com/alerts.cfm.
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 expects the cost reductions to save $1.6 million in
2020; and (ii) that the company will continue to evaluate other
cost reduction measures and to explore all options and government
subsidies to maximize employment for the company’s team,
including participation in the federal government’s Paycheck
Protection Program, are not guarantees of future performance and
involve assumptions and risks and uncertainties that are difficult
to predict. Actual outcomes and results may differ materially from
what is expressed in, or implied by, these forward-looking
statements. AutoWeb 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 financial condition of automobile
manufacturers and dealers; disruptions in automobile production;
changes in fuel prices; the economic impact of terrorist attacks,
political revolutions or military actions; failure of our internet
security measures; dealer attrition; 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; actual costs and expenses
exceeding charges taken by AutoWeb; changes in laws and
regulations; costs of legal matters, including, defending lawsuits
and undertaking investigations and related matters; and other
matters disclosed in AutoWeb’s filings with the Securities
and Exchange Commission. Investors are strongly encouraged to
review the company’s Annual Report on Form 10-K for the year
ended December 31, 2019 and other filings with the Securities and
Exchange Commission for a discussion of risks and uncertainties
that could affect the business, operating results or financial
condition of AutoWeb and the market price of the company’s
stock.
Company Contact
J.P.
Hannan
Chief
Financial Officer
1-949-437-4651
jp.hannan@autoweb.com
Investor Relations Contact
Sean
Mansouri, CFA or Cody Slach
Gateway
Investor Relations
1-949-574-3860
AUTO@gatewayir.com