-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DETjSBM6x+3UK9OjbOA9zZbd0YZ56Afi/Tms6gOR/T8vYWE5yf9aU7C1dQQg6woY BfJmfLXLwzUn2DSekgXUbQ== 0001017062-02-001835.txt : 20021025 0001017062-02-001835.hdr.sgml : 20021025 20021025164115 ACCESSION NUMBER: 0001017062-02-001835 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021024 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20021025 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOBYTEL INC CENTRAL INDEX KEY: 0001023364 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-MISCELLANEOUS RETAIL [5900] IRS NUMBER: 330711569 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22239 FILM NUMBER: 02798918 BUSINESS ADDRESS: STREET 1: 18872 MACARTHUR BLVD STREET 2: SUITE 200 CITY: IRVINE STATE: CA ZIP: 92612-1400 BUSINESS PHONE: 9492254500 MAIL ADDRESS: STREET 1: AUTO BY TEL CORP STREET 2: 18872 MACARTHUR BLVD 2ND FL CITY: IRVINE STATE: CA ZIP: 92612-1400 FORMER COMPANY: FORMER CONFORMED NAME: AUTO BY TEL CORP DATE OF NAME CHANGE: 19960920 FORMER COMPANY: FORMER CONFORMED NAME: AUTOBYTEL COM INC DATE OF NAME CHANGE: 19981230 8-K 1 d8k.htm FORM 8-K Form 8-K
 
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 
Date of Report: October 24, 2002
 
 
Autobytel Inc.
(Exact name of registrant as specified in its charter)
 
 
0-22239
(Commission File Number)
 
Delaware
(State or other jurisdiction of
incorporation or organization)
   
33-0711569
(I.R.S. Employer
Identification No.)
 
 
18872 MacArthur Boulevard
Irvine, California 92612
(Address of principal executive offices, with zip code)
 
 
(949) 225-4500
(Registrant’s telephone number, including area code)
 

 
Item 5.    OTHER EVENTS
 
On October 24, 2002, Autobytel Inc., a Delaware corporation (“Autobytel”), announced its financial results for the quarter ended September 30, 2002. A copy of Autobytel’s press release announcing these financial results is attached as Exhibit 99.1 hereto and incorporated by reference herein.
 
The press release filed as an exhibit to this report includes “safe harbor” language, pursuant to the Private Securities Litigation Reform Act of 1995, indicating that certain statements about Autobytel’s business contained in the press release are “forward-looking” rather than “historic.”
 
Item 7.    FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
 
(c)    EXHIBITS
 
99.1    Press Release dated October 24, 2002
 
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 thereunto duly authorized.
 
       
AUTOBYTEL INC.
Date: October 24, 2002
      
By:
  
/s/    HOSHI PRINTER
               
Hoshi Printer
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)

2

 
INDEX TO EXHIBITS
 
Exhibit Number
   
Description
99.1
   
Press Release dated October 24, 2002

3
EX-99.1 3 dex991.htm PRESS RELEASE DATED OCTOBER 24, 2002 Press Release dated October 24, 2002
 
EXHIBIT 99.1
 
AUTOBYTEL INC. REPORTS THIRD QUARTER 2002 FINANCIAL RESULTS
 
Positive Cash Flow, Narrowing Net Loss
 
IRVINE, CA—October 24, 2002—Autobytel Inc. (Nasdaq: ABTL), a leading Internet automotive marketing services company, today announced third quarter 2002 financial results.
 
Highlights for the quarter:
 
 
•
 
Generates $3.1 Million in Cash, Finishes Quarter with $26.5 million
 
•
 
Narrows Pro Forma Net Loss to $0.2 Million
 
•
 
Pro Forma EBITDA at $0.6 Million, or $0.02 per Share, Fourth Consecutive Positive Quarter
 
•
 
Launches Pilot Program with Major OEM, Adds Over 11,000 Enterprise Dealer Relationships
 
•
 
Dealer Sales Closing Rates Up 35% Since Beginning of Year
 
“We are pleased to report our first quarter of positive cash flow,” said Jeffrey Schwartz, President and CEO of Autobytel Inc. “Generating $3.1 million in the third quarter of 2002 is a milestone achievement in the seven-year history of Autobytel. It’s a sure sign that improving operations are resulting in improved financial performance.”
 
Autobytel’s cash balance as of September 30, 2002 was $26.5 million. During the third quarter, the Company generated $3.1 million in cash.
 
On a Generally Accepted Accounting Principles (GAAP) basis, revenue for the third quarter ended September 30, 2002, totaled $19.3 million, an increase of 6% compared to revenue of $18.2 million for the quarter ended September 30, 2001. It decreased 7% from $20.8 million reported for the second quarter ended June 30, 2002. Revenue for the third quarter of 2001 excludes Autoweb results prior to the acquisition on August 14, 2001.
 
Pro forma earnings before interest, taxes, depreciation, amortization and non-recurring charges (pro forma EBITDA) for the third quarter of 2002 were $0.6 million, or $0.02 per share. This compares to pro forma EBITDA of $(1.9) million, or $(0.07) per share, for the third quarter ended September 30, 2001. Pro forma EBITDA was $0.4 million, or $0.01 per share, for the second quarter ended June 30, 2002.
 
On a GAAP basis, the Company reported a net loss for the third quarter ended September 30, 2002 of $2.1 million or $(0.07) per share. This compares to a net loss for the quarter ended September 30, 2001 of $3.2 million or $(0.13) per share, and a net loss for the second quarter ended June 30, 2002 of $0.6 million or $(0.02) per share.

 
Pro forma net loss before a non-recurring charge (pro forma net loss)was $0.2 million or $(0.01) per share. The non-recurring charge was $1.9 million for obsolete international software.
 
“Narrowing our net loss to $200,000 puts us on track for breakeven in the fourth quarter,” said Jeffrey Schwartz.
 
Highlights for the Third Quarter
 
Revenues: Autobytel reported third quarter revenues of $19.3 million, of which $14.0 million was related to Program Fees, $2.3 million was related to Enterprise Sales, $2.0 million was related to Advertising, and $1.0 million was related to Other Products and Services.
 
Pro Forma Operating Expenses: Total pro forma operating expenses in the third quarter were $18.7 million. Sales and marketing expenses totaled $11.6 million, including customer acquisition costs. Product development and technology costs totaled $4.9 million. General and administrative costs totaled $2.2 million.
 
Non-recurring Charge: The company took a non-recurring charge of $1.9 million for previously capitalized software that was originally intended to be used for global website development.
 
Unique Visitor Count: Autobytel’s four web site properties, Autobytel.com, Autoweb.com, Carsmart.com and AutoSite.com, received unique average monthly site visitors in excess of 4.1 million in the third quarter of 2002 according to Nielsen Net Ratings. This was a significant increase over the 3.6 million average monthly visitors in the second quarter of 2002 and represented the highest rate of average monthly site visitors.
 
Purchase Requests: The Company delivered approximately 800,000 Purchase Requests during the third quarter of 2002. Revenue per Purchase Request increased sequentially 14%, from $17.92 in the second quarter to $20.38 in the third quarter.
 
Dealer Count: The Company reported approximately 20,600 dealer relationships in the third quarter, 5,600 of which were program dealer relationships. Average monthly dealer fees were approximately $800. The Company’s remaining 15,000 dealer relationships were accounted for under its enterprise sales category. In this category, the Company reported adding a pilot program with a major OEM during the third quarter of 2002 representing over 11,000 enterprise dealer relationships. The program is renewable in one-month increments.
 
Headcount: As of September 30, 2002, the Company had 227 employees, essentially the same as in the second quarter of 2002.
 
Quality Initiatives: Autobytel furthered its commitment to unmatched product quality by launching three new programs during the quarter. The Company’s proprietary Quality

 
Verification SystemSM is designed to ensure that dealers receive Purchase Requests only from serious car buyers. The Dealer Management Report program provides dealers with direct customer feedback to help them improve their sales closing ratios. The Dealer Opportunity Report tracks and ranks each dealer relationship to optimize each customer contact made by the Company’s sales force. As a result of these recent initiatives, dealer closing ratios are already showing a marked improvement. “With our close rates up 35% since the beginning of this year, we have dramatically reduced the average cost for dealers of selling cars with Autobytel, which now stands around $120 per sale. This progress has had a positive impact on every aspect of our business,” said Jeffrey Schwartz.
 
Pro Forma Results
 
The pro forma operating results for the third quarter of 2002 exclude the following items on the Company’s Consolidated Statements of Operations:
 
 
•
 
Restructuring and other charges and benefits
 
•
 
Depreciation, amortization and stock-based compensation
 
A reconciliation of GAAP to pro forma is included in the attached Consolidated Statements of Operations.
 
Business Outlook
 
The Company expects to report revenues of $80 million for the full fiscal year 2002, with pro forma EBITDA of $0.07 per share, and expects to be cash neutral to cash positive for the fourth quarter of 2002.
 
Conference Call
 
In conjunction with Autobytel Inc.’s third quarter 2002 earnings release, there will be a conference call broadcast live over the Internet today, October 24, 2002, at 4:30 PM EDT. Links to the web cast conference call follow:
 
http://www.irconnect.com/abtl/pages/conference.mhtml
 
The Webcast will be archived within 24 hours of the end of the call until the next quarter’s earnings announcement. To listen to the archived Webcast go to:
 
http://www.irconnect.com/abtl/pages/conference.mhtml
 
About Autobytel Inc.
Autobytel Inc. (Nasdaq: ABTL), a leading Internet automotive marketing services company, helps retailers sell cars and manufacturers build brands through marketing and CRM (customer relationship management) programs. Autobytel Inc. owns and operates the popular websites Autobytel.com, Autoweb.com, Carsmart.com and AutoSite.com, as well as AIC (Automotive

 
Information Center), a leading provider of automotive marketing data and technology. Autobytel Inc. generated an estimated four percent of all domestic new vehicle sales—$17 billion in car sales in 2001—for dealers through its services. Autobytel Inc. is the largest syndicated car-buying content network, reaching millions of unique visitorsas they are making their vehicle buying decisions. Autobytel Inc. content and technology has potential exposure to over 90 percent of total web traffic*.
 
*Jupiter Media Metrix October 2001 Digital Media Audience Report (Autobytel Inc. sites is the unduplicated audience of the Autobytel and Autoweb properties and Carsmart.com. The car-buying and ownership category as defined by Autobytel. Autobytel Inc. provides content to Yahoo! Inc., AOL websites, MSN.com and Lycos.com. The unduplicated audience of these four sites accounts for over 90 percent of total traffic.)
 
FORWARD-LOOKING STATEMENT DISCLAIMER
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 recent or future terrorist attacks, increased dealer attrition, pressure on program fees, increased or unexpected competition, that actual costs and expenses exceed the charges taken by the company, changes in laws and regulations 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, 2001, 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.
 
Contact:
Investor Relations
Sean Collins, Coffin Communications Group, 818.789.0100, ext. 202
(Sean.Collins@CoffinCG.com)
 
Media Relations
Melanie Webber, Vice President, Corporate Communications, Autobytel Inc., 949.862.3023
(melaniew@autobytel.com)
 
###

Autobytel Inc.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
 
ASSETS
                  
    
September 30, 2002
     
December 31, 2001
  
    
(unaudited)
         
Current assets:
                  
Domestic cash and cash equivalents
   
$
26,480
 
   
$
30,006
 
International cash and cash equivalents
   
 
—  
 
   
 
28,784
 
Restricted cash
   
 
28
 
   
 
3,047
 
Accounts receivable, net of allowance for doubtful
accounts and customer credits of $4,253 and
$7,109, respectively
   
 
7,998
 
   
 
8,519
 
Prepaid expenses and other current assets
   
 
3,086
 
   
 
4,419
 
    
  
Total current assets
   
 
37,592
 
   
 
74,775
 
Property and equipment, net
   
 
2,283
 
   
 
2,889
 
Capitalized software, net
   
 
2,467
 
   
 
4,319
 
Investment in unconsolidated subsidiary
   
 
4,684
 
   
 
—  
 
Goodwill, net
   
 
8,367
 
   
 
8,644
 
Other assets
   
 
96
 
   
 
154
 
    
  
Total assets
   
$
55,489
 
   
$
90,781
 
    
  
LIABILITIES AND STOCKHOLDERS’ EQUITY
                  
Current liabilities:
                  
Accounts payable
   
$
4,651
 
   
$
9,108
 
Accrued expenses
   
 
4,425
 
   
 
9,005
 
Deferred revenues
   
 
3,807
 
   
 
4,708
 
Customer deposits
   
 
83
 
   
 
92
 
Other current liabilities
   
 
255
 
   
 
300
 
    
  
Total current liabilities
   
 
13,221
 
   
 
23,213
 
Long-term liabilities
   
 
319
 
   
 
—  
 
    
  
Total liabilities
   
 
13,540
 
   
 
23,213
 
    
  
Minority interest
   
 
—  
 
   
 
7,173
 
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; 31,191,678 and 30,969,377 shares issued
and outstanding, respectively
   
 
31
 
   
 
31
 
Additional paid-in capital
   
 
203,613
 
   
 
203,280
 
Accumulated other comprehensive loss
   
 
(41
)
   
 
(2,438
)
Accumulated deficit
   
 
(161,654
)
   
 
(140,478
)
    
  
Total stockholders’ equity
   
 
41,949
 
   
 
60,395
 
    
  
Total liabilities and stockholders’ equity
   
$
55,489
 
   
$
90,781
 
    
  
Note:
 
Balances
 
as of September 30, 2002 exclude consolidation of Autobytel.Europe.

5

 
Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
 
(unaudited)
 
    
Third Quarter Ended September 30, 2002 (a)
     
Third Quarter Ended September 30, 2001 (a)
  
    
GAAP
       
Pro Forma
Adjustments
     
Pro Forma(b)
     
GAAP
       
Pro Forma
Adjustments
     
Pro Forma(b)
  
Revenues:
                                                          
Program fees
   
$
14,022
 
     
$
—  
 
   
$
14,022
 
   
$
13,162
 
     
$
—  
 
   
$
13,162
 
Enterprise sales
   
 
2,253
 
     
 
—  
 
   
 
2,253
 
   
 
1,843
 
     
 
—  
 
   
 
1,843
 
Advertising
   
 
2,025
 
     
 
—  
 
   
 
2,025
 
   
 
1,313
 
     
 
—  
 
   
 
1,313
 
Other products and services
   
 
981
 
     
 
—  
 
   
 
981
 
   
 
1,864
 
     
 
—  
 
   
 
1,864
 
    
    
  
  
    
  
Total revenues
   
 
19,281
 
     
 
—  
 
   
 
19,281
 
   
 
18,182
 
     
 
—  
 
   
 
18,182
 
    
    
  
  
    
  
Operating expenses:
                                                          
Sales and marketing
   
 
11,628
 
     
 
(35
) (c)
   
 
11,593
 
   
 
11,968
 
     
 
(40
) (c)
   
 
11,928
 
Product and technology development
   
 
5,733
 
     
 
(793
) (c)
   
 
4,940
 
   
 
5,567
 
     
 
(622
) (c)
   
 
4,945
 
General and administrative
   
 
2,206
 
     
 
(41
) (c)
   
 
2,165
 
   
 
3,345
 
     
 
(124
) (c)
   
 
3,221
 
Domestic restructuring and other charges
   
 
1,858
 
     
 
(1,858
) (d)
   
 
—  
 
   
 
1,254
 
     
 
(1,254
) (e)
   
 
—  
 
    
    
  
  
    
  
Total operating expenses
   
 
21,425
 
     
 
(2,727
)
   
 
18,698
 
   
 
22,134
 
     
 
(2,040
) 
   
 
20,094
 
    
    
  
  
    
  
Loss from operations
   
 
(2,144
)  
                       
 
(3,952
) 
                    
Pro forma EBITDA (b)
              
 
2,727
 
   
 
583
 
              
 
2,040
 
   
 
(1,912
)  
Interest income, net
   
 
96
 
     
 
—  
 
   
 
96
 
   
 
717
 
     
 
—  
 
   
 
717
 
Foreign currency exchange gain (loss)
   
 
10
 
     
 
—  
 
   
 
10
 
   
 
(33
) 
     
 
—  
 
   
 
(33
)  
Equity loss in unconsolidated subsidiaries
   
 
(64
) 
     
 
—  
 
   
 
(64
) 
   
 
—  
 
     
 
—  
 
   
 
—  
 
    
    
  
  
    
  
Income (loss) before minority interest and income taxes
   
 
(2,102
) 
     
 
2,727
 
   
 
625
 
   
 
(3,268
) 
     
 
2,040
 
   
 
(1,228
) 
Minority interest
   
 
—  
 
     
 
—  
 
   
 
—  
 
   
 
31
 
     
 
—  
 
   
 
31
 
    
    
  
  
    
  
Income (loss) before income taxes
   
 
(2,102
) 
     
 
2,727
 
   
 
625
 
   
 
(3,237
) 
     
 
2,040
 
   
 
(1,197
) 
Provision for income taxes
   
 
—  
 
     
 
—  
 
   
 
—  
 
   
 
1
 
     
 
—  
 
   
 
1
 
Depreciation, amortization and stock compensation expense
              
 
869
  (c)
   
 
869
 
              
 
786
  (c)
   
 
786
 
    
    
  
  
    
  
Pro forma net loss before non-recurring charges
              
$
1,858
 
   
$
(244
) 
              
$
1,254
 
   
$
(1,984
) 
               
  
             
  
Net loss
   
$
(2,102
) 
                       
$
(3,238
) 
                    
    
                      
                   
Loss from operations/Pro forma EBITDA per share:
                                                          
Basic
   
$
(0.07
) 
              
$
0.02
 
   
$
(0.15
) 
              
$
(0.07
) 
Net loss/Pro forma net loss before non-recurring charges per share:
                                                          
Basic
   
$
(0.07
) 
              
$
(0.01
) 
  
$
(0.13
) 
              
$
(0.08
) 
Shares used in computing income (loss) per share:
                                                          
Basic
   
 
31,170,164
 
              
 
31,170,164
 
   
 
25,795,700
 
              
 
25,795,700
 
 
Notes:
(a)
 
Results include Autoweb from the date of acquisition on August 14, 2001.
(b)
 
The Pro Forma Consolidated Statements of Operations are not presentations in accordance with GAAP (Generally Accepted Accounting Principles) as they exclude the effects of notes (c) through (e).
(c)
 
Adjustments for depreciation and amortization expense of $869 in the third quarter of 2002 and depreciation, amortization and stock compensation expense of $786 in the third quarter of 2001. No stock compensation expense was incurred in the third quarter of 2002.
(d)
 
Adjustment for the write-off of previously capitalized software related to the development of global baseline technology.
(e)
 
Adjustment for restructuring charges related to the integration of Autoweb into Autobytel as a result of the acquisition of Autoweb on August 14, 2001.
 

6

Autobytel Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
 
(unaudited)
 
    
Nine Months Ended September 30, 2002 (a)
     
Nine Months Ended September 30, 2001 (a)
    
GAAP
     
Pro Forma Adjustments
     
Pro Forma(b)
     
GAAP
     
Pro Forma Adjustments
     
Pro Forma(b)
Revenues:
                                                    
Program fees
   
$
44,875
 
   
$
—  
 
   
$
44,875
 
   
$
37,537
 
   
$
—  
 
   
$
37,537
Enterprise sales
   
 
6,980
 
   
 
—  
 
   
 
6,980
 
   
 
4,843
 
   
 
—  
 
   
 
4,843
Advertising
   
 
5,421
 
   
 
—  
 
   
 
5,421
 
   
 
2,031
 
   
 
—  
 
   
 
2,031
Other products and services
   
 
3,569
 
   
 
—  
 
   
 
3,569
 
   
 
6,152
 
   
 
—  
 
   
 
6,152
    
  
  
  
  
  
Total revenues
   
 
60,845
 
   
 
—  
 
   
 
60,845
 
   
 
50,563
 
   
 
—  
 
   
 
50,563
    
  
  
  
  
  
Operating expenses:
                                                    
Sales and marketing
   
 
37,124
 
   
 
(103
) (c)
   
 
37,021
 
   
 
38,147
 
   
 
(158)
 (c)
   
 
37,989
Product and technology development
   
 
17,209
 
   
 
(2,496
) (c)
   
 
14,713
 
   
 
14,169
 
   
 
(1,083)
 (c)
   
 
13,086
General and administrative
   
 
7,667
 
   
 
(140
) (c)
   
 
7,527
 
   
 
10,965
 
   
 
(1,172)
 (c)
   
 
9,793
Goodwill impairment
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
21,614
 
   
 
(21,614)
 (d)
   
 
—  
Autobytel.Europe restructuring, impairment and other international charges
   
 
15,015
 
   
 
(15,015
) (e)
   
 
—  
 
   
 
11,202
 
   
 
(11,202)
 (f)
   
 
—  
Domestic restructuring and other charges
   
 
1,800
 
   
 
(1,800
) (g)
   
 
—  
 
   
 
3,115
 
   
 
(3,115)
 (h)
   
 
—  
    
  
  
  
  
  
Total operating expenses
   
 
78,815
 
   
 
(19,554)
 
   
 
59,261
 
   
 
99,212
 
   
 
(38,344)
 
   
 
60,868
    
  
  
  
  
  
Loss from operations
   
 
(17,970
)
                     
 
(48,649
)
                
Pro forma EBITDA (b)
            
 
19,554
 
   
 
1,584
 
            
 
38,344
 
   
 
(10,305)
Loss on sale of investment in Autobytel.Europe
   
 
(4,168
)
   
 
4,168
  (i)
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
Interest income, net
   
 
600
 
   
 
—  
 
   
 
600
 
   
 
2,790
 
   
 
—  
 
   
 
2,790
Foreign currency exchange gain (loss)
   
 
(2
)
   
 
—  
 
   
 
(2
)
   
 
425
 
   
 
—  
 
   
 
425
Equity loss in unconsolidated subsidiaries
   
 
(496
)
   
 
—  
 
   
 
(496
)
   
 
(500
)
   
 
—  
 
   
 
(500)
    
  
  
  
  
  
Income (loss) before minority interest and income taxes
   
 
(22,036
)
   
 
23,722
 
   
 
1,686
 
   
 
(45,934
)
   
 
38,344
 
   
 
(7,590)
Minority interest
   
 
866
 
   
 
—  
 
   
 
866
 
   
 
2,008
 
   
 
—  
 
   
 
2,008
    
  
  
  
  
  
Income (loss) before income taxes
   
 
(21,170
)
   
 
23,722
 
   
 
2,552
 
   
 
(43,926
)
   
 
38,344
 
   
 
(5,582)
Provision for income taxes
   
 
6
 
   
 
—  
 
   
 
6
 
   
 
29
 
   
 
—  
 
   
 
29
Depreciation, amortization and stock compensation expense
            
 
2,739
  (c)
   
 
2,739
 
            
 
2,413
 (c)
   
 
2,413
    
  
  
  
  
  
Pro forma net loss before non-recurring charges
            
$
20,983
 
   
$
(193
)
            
$
35,931
 
   
$
(8,024)
             
  
           
  
Net loss
   
$
(21,176
)
                     
$
(43,955
)
                
    
                    
               
Loss from operations/Pro forma EBITDA per share:
                                                    
Basic
   
$
(0.58
)
            
$
0.05
 
   
$
(2.19
)
            
$
(0.46)
Net loss/Pro forma net loss before non-recurring charges per share:
                                                    
Basic
   
$
(0.68
)
            
$
(0.01)
 
   
$
(1.98
)
            
$
(0.36)
Shares used in computing income (loss) per share:
                                                    
Basic
   
 
31,125,944
 
            
 
31,125,944
 
   
 
22,191,514
 
            
 
22,191,514
 
Notes:
(a)
 
Results include Autoweb from the date of acquisition on August 14, 2001.
(b)
 
The Pro forma Consolidated Statements of Operations are not presentations in accordance with GAAP (Generally Accepted Accounting Principles) as they exclude the effects of notes (c) through (i).
(c)
 
Adjustments for depreciation, amortization and stock compensation expenses of $2,739 and $2,413 in the nine months ended 2002 and 2001, respectively.
(d)
 
Adjustment for impairment of goodwill related to our acquisition of A.I.N. Corporation.
(e)
 
Adjustment for the change in Autobytel.Europe’s capital structure and impairment of our investment in Autobytel.Europe.
(f)
 
Adjustment for the restructuring of Autobytel.Europe, the write-off of obsolete international software and the write-off of investments in European joint ventures.
(g)
 
Adjustment for the write-off of previously capitalized software related to the development of global baseline technology, charges related to our reduction in workforce, excess facilities and costs related to an abandoned transaction net of benefits related to arbitration recovery and the reduction of legal fees and negotiated settlements.
(h)
 
Adjustment for the restructuring of our automotive operations group, contract termination costs related to online advertising and our aftermarket program, as well as the write-off of previously capitalized software related to our aftermarket program and restructuring charges related to the integration of Autoweb into Autobytel as a result of the acquisition of Autoweb on August 14, 2001.
(i)
 
Adjustment for loss recognized on reduction of ownership in Autobytel.Europe from 76.5% to 49%.

7

 
Autobytel Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands, except share and per share data)
 
(unaudited)
 
      
Three Months Ended September 30,
       
Nine Months Ended September 30,
  
      
2002
       
2001
       
2002
       
2001
  
Cash flows from operating activities:
                                            
Net loss
     
$
(2,102
)
     
$
(3,238
)
     
$
(21,176
)
     
$
(43,955
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
                                            
Non-cash charges:
                                            
Depreciation and amortization
     
 
870
 
     
 
725
 
     
 
2,719
 
     
 
2,228
 
Provision for bad debt and customer credits
     
 
2,249
 
     
 
2,067
 
     
 
6,610
 
     
 
5,992
 
Loss on disposal of property and equipment
     
 
61
 
     
 
19
 
     
 
50
 
     
 
290
 
Compensation expense recorded for fair market value of stock options in excess of exercise price
     
 
—  
 
     
 
61
 
     
 
20
 
     
 
185
 
Autobytel.Europe restructuring and impairment
     
 
—  
 
     
 
—  
 
     
 
15,015
 
     
 
—  
 
Loss on recapitalization of Autobytel.Europe
     
 
—  
 
     
 
—  
 
     
 
4,168
 
     
 
—  
 
Equity losses in unconsolidated subsidiaries
     
 
63
 
     
 
—  
 
     
 
495
 
     
 
500
 
Minority interest
     
 
—  
 
     
 
(31
)
     
 
(866
)
     
 
(2,008
)
Impairment of goodwill
     
 
—  
 
     
 
—  
 
     
 
—  
 
     
 
21,614
 
Write-down of capitalized software costs
     
 
1,858
 
     
 
—  
 
     
 
1,858
 
     
 
3,455
 
Write-off of investments in foreign entities
     
 
—  
 
     
 
—  
 
     
 
—  
 
     
 
2,142
 
Write-down of property and equipment
     
 
—  
 
     
 
—  
 
     
 
—  
 
     
 
242
 
Contract termination costs
     
 
—  
 
     
 
(697
)
     
 
—  
 
     
 
—  
 
Changes in assets and liabilities:
                                            
Accounts receivable
     
 
9
 
     
 
(308
)
     
 
(5,861
)
     
 
(4,135
)
Prepaid expenses and other current assets
     
 
949
 
     
 
2,570
 
     
 
1,317
 
     
 
3,082
 
Other assets
     
 
—  
 
     
 
—  
 
     
 
58
 
     
 
2
 
Accounts payable
     
 
(22
)
     
 
110
 
     
 
(4,419
)
     
 
880
 
Accrued expenses
     
 
189
 
     
 
(1,907
)
     
 
(3,576
)
     
 
(3,664
)
Restructuring liabilities
     
 
(47
)
     
 
(2,147
)
     
 
(228
)
     
 
2,723
 
Deferred revenues
     
 
(604
)
     
 
279
 
     
 
(901
)
     
 
(678
)
Customer deposits
     
 
(3
)
     
 
(51
)
     
 
(9
)
     
 
(49
)
Other current liabilities
     
 
(83
)
     
 
53
 
     
 
12
 
     
 
(138
)
Long-term restructuring and other liabilities
     
 
(47
)
     
 
(435
)
     
 
319
 
     
 
(482
)
      
    
    
    
Net cash provided by (used in) operating activities
     
 
3,340
 
     
 
(2,930
)
     
 
(4,395
)
     
 
(11,774
)
      
    
    
    
Cash flows from investing activities:
                                            
Deconsolidation of Autobytel.Europe
     
 
—  
 
     
 
—  
 
     
 
(28,163
)
     
 
—  
 
Acquisition of business, net of cash acquired
     
 
—  
 
     
 
5,697
 
     
 
—  
 
     
 
5,697
 
Investment in foreign entities
     
 
—  
 
     
 
—  
 
     
 
—  
 
     
 
(413
)
Investment in unconsolidated subsidiary
     
 
—  
 
     
 
—  
 
     
 
(400
)
     
 
—  
 
Notes receivable from foreign entity
     
 
—  
 
     
 
—  
 
     
 
—  
 
     
 
(88
)
Repayment of notes receivable from foreign entity
     
 
—  
 
     
 
—  
 
     
 
—  
 
     
 
292
 
Purchases of property and equipment
     
 
(192
)
     
 
(1,616
)
     
 
(915
)
     
 
(1,985
)
Proceeds from sale of property and equipment
     
 
3
 
     
 
—  
 
     
 
156
 
     
 
—  
 
Capitalized software costs
     
 
(83
)
     
 
(728
)
     
 
(1,412
)
     
 
(4,493
)
      
    
    
    
Net cash provided by (used in) investing activities
     
 
(272
)
     
 
3,353
 
     
 
(30,734
)
     
 
(990
)
      
    
    
    
Cash flows from financing activities:
                                            
Net proceeds from sale of common stock
     
 
95
 
     
 
66
 
     
 
313
 
     
 
123
 
Net proceeds from sale of subsidiary company stock
     
 
—  
 
     
 
—  
 
     
 
—  
 
     
 
2,000
 
      
    
    
    
Net cash provided by financing activities
     
 
95
 
     
 
66
 
     
 
313
 
     
 
2,123
 
      
    
    
    
Effect of exchange rates on cash
     
 
(25
)
     
 
1,743
 
     
 
(513
)
     
 
(1,721
)
      
    
    
    
Net increase (decrease) in cash and cash equivalents
     
 
3,138
 
     
 
2,232
 
     
 
(35,329
)
     
 
(12,362
)
Cash and cash equivalents, beginning of period
     
 
23,370
 
     
 
67,351
 
     
 
61,837
 
     
 
81,945
 
      
    
    
    
Cash and cash equivalents, end of period
     
$
26,508
 
     
$
69,583
 
     
$
26,508
 
     
$
69,583
 
      
    
    
    
Supplemental disclosure of cash flow information:
                                            
Cash paid (refunded) during the period for income taxes
     
$
—  
 
     
$
(25
)
     
$
6
 
     
$
1
 
      
    
    
    
Cash paid during the period for interest
     
$
1
 
     
$
2
 
     
$
1
 
     
$
4
 
      
    
    
    

8
-----END PRIVACY-ENHANCED MESSAGE-----