8-K

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) August 3, 2017

Autobytel Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-34761	33-0711569
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

18872 MacArthur Boulevard, Suite 200, Irvine, California	92612-1400
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (949) 225-4500

Not Applicable

(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:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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).

Emerging growth company	☐
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.	☐

Item 2.02 Results of Operations and Financial Condition.

On August 3, 2017, Autobytel Inc., a Delaware corporation (“Autobytel” or “Company”), announced in a press release its financial results for the quarter ended June 30, 2017. A copy of Autobytel’s press release announcing these financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.

In connection with the press release, the Company also held a conference call that was webcast on August 3, 2017. Presentation slides referenced during the conference call were available on Autobytel’s website for viewing by call participants. A transcript of that call together with presentation slides referenced during the conference call are attached hereto as Exhibit 99.2 to this Current Report on Form 8-K.

The attached press release, transcript, and presentation slides contain information that includes the following Non-GAAP financial measures as defined in Regulation G adopted by the Securities and Exchange Commission: “Non-GAAP Income” and “Non-GAAP EPS.” The Company defines (i) Non-GAAP Income as generally accepted accounting principles (“GAAP”) net income before amortization of acquired intangibles, non-cash stock-based compensation, acquisition costs, severance costs, gain or loss on investment or sale, litigation settlements, and income taxes; and (ii) Non-GAAP EPS as Non-GAAP Income divided by weighted average diluted shares outstanding. In addition to the foregoing Non-GAAP financial measures, for year-over-year comparisons, prior year results for all periods presented are adjusted to exclude the Company’s specialty finance leads product, which was divested on December 31, 2016, which comparisons and prior year results are also Non-GAAP financial measures as defined by Regulation G. The Company’s management believes that presenting Non-GAAP Income and Non-GAAP EPS and the adjusted year-over-year comparisons and prior year results provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and are better metrics for monitoring the Company’s performance given the Company’s net operating loss tax credits and recent acquisitions and divestitures. These Non-GAAP financial measures are 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. Tables providing reconciliations of Non-GAAP Income and Non-GAAP EPS and the adjusted year-over-year comparisons and prior year results are included at the end of the press release and in the presentation slides filed as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K.

The Company also provided guidance as to its 2017 Non-GAAP Income and Non-GAAP EPS. Note that for comparative purposes, the foregoing guidance excluded 2016 revenues, Non-GAAP Income and Non-GAAP EPS related to the Company’s specialty finance leads product that was divested on December 31, 2016. Additionally, although the Company provided a reconciliation of Non-GAAP Income and Non-GAAP EPS, it did not provide a reconciliation of its 2017 Non-GAAP Income or Non-GAAP EPS guidance to the most directly comparable GAAP financial measures because the effect, timing and potential significance of the effects of tax considerations, primarily related to the Company’s net operating loss carryforwards, are out of the Company’s control and/or cannot be reasonably predicted. Consequently, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.

The attached press release, transcript and presentation slides are incorporated herein solely for purposes of this Item 2.02 disclosure. The information furnished pursuant to this Item 2.02, including the exhibits attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any incorporation by reference language of such filing. In addition, the press release, transcript and presentation slides furnished as exhibits to this report include “safe harbor” language pursuant to the Private Securities Litigation Reform Act of 1995, stating that certain statements about Autobytel’s business contained in the press release, transcript and presentation slides are “forward-looking” rather than “historic.”

Item 9.01 Financial Statements and Exhibits

(d)

Exhibits

99.1

Press Release dated August 3, 2017

99.2

Transcript of Autobytel Inc.’s Conference Call dated August 3, 2017 and Conference Call Presentation Slides

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:  August 8, 2017

AUTOBYTEL INC.
By:	/s/ Glenn E. Fuller
	Glenn E. Fuller, Executive Vice President, Chief Legal and Administrative Officer and Secretary

INDEX OF EXHIBITS

Exhibit No.	Description of Document
99.1	Press Release dated August 3, 2017
99.2	Transcript of Autobytel Inc.’s Conference Call dated August 3, 2017 and Conference Call Presentation Slides

EX-99.1

Exhibit 99.1

Autobytel Reports Second Quarter 2017 Results

Click Revenues up 76% to $6.5 Million

IRVINE, Calif. – August 3, 2017 – Autobytel Inc. (NASDAQ: ABTL), a pioneer and leading provider of digital automotive services connecting in-market car buyers with dealers and OEMs, is reporting financial results for the second quarter ended June 30, 2017. For year-over-year comparisons, prior year results for all periods presented are adjusted to exclude the company’s specialty finance leads product, which was divested on December 31, 2016.

Second Quarter 2017 Financial Summary vs. Year-Ago Quarter

●

Total revenues were $34.6 million, essentially unchanged compared to the prior year adjusted quarter.

●

Advertising revenues increased 52% to $8.0 million, with click revenues up 76% to $6.5 million.

●

Net income was $0.3 million or $0.02 per diluted share, compared to adjusted net income of $0.4 million or $0.03 per share in the prior year quarter.

●

Non-GAAP income was $2.5 million or $0.19 per diluted share, compared to adjusted non-GAAP income of $3.0 million or $0.23 per diluted share in the prior year quarter.

Management Commentary

“Despite a softening macro environment in the auto industry, we continued to grow our clicks business during Q2 at a strong rate as we expanded its rollout to more dealers and OEMs,” said Jeff Coats, president and CEO of Autobytel. “We continue to qualify and integrate additional new traffic sources for our clicks business, which will likewise support our leads business.

“The paid search field has become more complex, with many of our paid traffic partners moving towards audience expansion marketing, which is sometimes called similar or look-alike audiences. During the second quarter we identified that some of these audience expansions were not converting to automotive purchases at a range of close rates acceptable to us. This led us to halt these traffic campaigns in the second quarter. We are actively working to implement solutions, and have already begun to rebuild our original high-quality traffic stream. We are also continually looking to expand our methods and sources of traffic generation for both leads and clicks, and are constantly using close rate data to identify if these new sources of traffic are performing to our high-quality standards. Given the actions we are taking to address these traffic issues, and the widely accepted expectation for auto sales to decline in 2017, we are lowering our 2017 revenue and adjusted EPS outlook.

“Over the coming months,” Coats continued, “we expect to work through this issue and re-establish our revenue and margin profiles. We have a variety of initiatives in place that are meant to diversify our traffic acquisition, which we believe should provide a meaningful amount of high-quality traffic to help mitigate the loss of these other traffic campaigns. We believe our delivery of high-intent car buyers will be all-the-more important to our dealer and OEM customers.”

Second Quarter 2017 Financial Results

Total revenues in the second quarter of 2017 were $34.6 million, which is flat compared to the adjusted year-ago quarter. Revenue drivers included the continued strong growth of advertising click revenues, which increased 76% to $6.5 million. This was offset by the effect of the eliminated traffic.

Gross profit in the second quarter was $10.6 million compared to an adjusted $13.5 million in the year-ago quarter, with the decrease driven by increased traffic acquisition and optimization costs. As a percentage of revenue, gross profit was 30.7%, which is lower than the company’s targeted mid-30% range as a result of the aforementioned traffic issues. The company expects gross margin to remain in the low-30% range over the next two quarters as it focuses on the optimization of traffic acquisition costs.

Total operating expenses in the second quarter of 2017 decreased to $10.4 million compared to an adjusted $12.7 million in the year-ago quarter. As a percentage of revenues, total operating expenses were 30.0% compared to an adjusted 36.7% in the prior year quarter. The company expects operating expenses as a percentage of revenues to continue in the low 30% range as it increases investments in technology and sales and marketing resources in 2017.

Net income in the second quarter of 2017 was $0.3 million or $0.02 per diluted share, compared to an adjusted net income of $0.4 million or $0.03 per share in the year-ago quarter.

Non-GAAP income was $2.5 million or $0.19 per diluted share, compared to adjusted non-GAAP income of $3.0 million or $0.23 per diluted share in the second quarter of 2016 (see "Note about Non-GAAP Financial Measures" below for further discussion). The decline was driven by lower gross margins as a result of the aforementioned traffic issues.

At June 30, 2017, cash and cash equivalents totaled $44.6 million compared to $38.5 million (unadjusted) at December 31, 2016. Total debt was reduced to $19.1 million compared to $23.1 million (unadjusted) at December 31, 2016.

2017 Business Outlook

Autobytel now expects 2017 revenue to range between $144.0 million and $148.0 million (previously $156.0 million to $160.0 million) compared to $150.4 million in 2016. The company also expects non-GAAP income to range between $10.5 million and $11.1 million (previously $16.8 million to $17.3 million) compared to $16.8 million in 2016, with non-GAAP EPS ranging between $0.78 and $0.82 on 13.5 million shares (previously $1.24 to $1.28 on 13.5 million shares).

Note that for comparative purposes, 2016 revenues, non-GAAP income and non-GAAP EPS exclude results from the company’s specialty finance leads product that was divested on December 31, 2016.

The company has not provided a reconciliation of its 2017 non-GAAP income or non-GAAP EPS guidance to the most directly comparable GAAP financial measures because the effect, timing and potential significance of the effects of tax considerations, primarily related to the company’s net operating loss carryforwards, are out of the company's control and/or cannot be reasonably predicted. Consequently, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.

Conference Call

Autobytel will hold a conference call today at 5:00 p.m. Eastern time to discuss its second quarter 2017 results, followed by a question-and-answer session.

Date: Thursday, August 3, 2017

Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)

Toll-free dial-in number: 1-877-852-2929

International dial-in number: 1-404-991-3925

Conference ID: 55004737

During the call, Autobytel management will refer to a supplementary slide presentation, which will be available for download in the Investor Relations section of the company's website.

The conference call will also be broadcast live at www.autobytel.com(click on "Investor Relations" and then click on "Events & Presentations"). Please visit the website at least 15 minutes prior to the start of the call to register and download any necessary software. For those who will be joining the call by phone, please call the conference telephone number 5-10 minutes prior to the start time, and an operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at 1-949-574-3860.

A replay of the conference call will be available after 8:00 p.m. Eastern time on the same day through August 11, 2017. The call will also be archived in the Investor Relations section of Autobytel's website for one year.

Toll-free replay number: 1-855-859-2056

International replay number: 1-404-537-3406

Replay ID: 55004737

Tax Benefit Preservation Plan

At December 31, 2016, the company had approximately $75.8 million in available net operating loss carryforwards (“NOLs”) for U.S. federal income tax purposes. The company's Tax Benefit Preservation Plan (“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. 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. As of July 31, 2017, there were 12,868,769 shares of the company’s common stock, $0.001 par value, outstanding. There is no guarantee that the Plan will achieve the objective of preserving the value of the company's NOLs. For more information, please visit http://investor.autobytel.com/tax.cfm.

About Autobytel Inc.

Autobytel 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 with its flagship website www.autobytel.comand 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 Autobytel news alerts and special event invitations by accessing the online registration form at investor.autobytel.com/alerts.cfm.

Note about Non-GAAP Financial Measures

Autobytel has disclosed non-GAAP income and non-GAAP EPS in this press release, which are non-GAAP financial measures as defined by SEC Regulation G, for the 2017 and 2016 second quarters. The company defines (i) non-GAAP income as GAAP net income before amortization of acquired intangibles, non-cash stock-based compensation, acquisition costs, severance costs, gain or loss on investment or sale, litigation settlements and income taxes; and (ii) non-GAAP EPS as non-GAAP income divided by weighted average diluted shares outstanding. In addition to the foregoing non-GAAP financial measures, for year-over-year comparisons, prior year results for all periods presented are adjusted to exclude the company’s specialty finance leads product, which was divested on December 31, 2016, which comparisons and prior year results are also non-GAAP financial measures as defined by SEC Regulation G. The company's management believes that presenting non-GAAP income and non-GAAP EPS and the adjusted year-over-year comparisons and prior year results provides useful information to investors regarding the underlying business trends and performance of the company's ongoing operations and are better metrics for monitoring the company's performance given the company's net operating loss (NOL) tax credits and recent acquisitions and divestitures. These non-GAAP financial measures are 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. Tables providing reconciliations of non-GAAP income and non-GAAP EPS and the adjusted year-over-year comparisons and prior year results are included at the end of this press release.

Forward-Looking Statements Disclaimer

The statements contained in this press release 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, and our outlook regarding our performance and growth are forward-looking statements. These forward-looking statements, including, that (i) over the coming months, the company expects to work through the identified traffic issues issue and re-establish its revenue and margin profiles; (ii) the company believes its initiatives meant to diversify its traffic acquisition should provide a meaningful amount of high-quality traffic to help mitigate the loss of the identified traffic campaigns; (iii) the company believes that its delivery of high-intent car buyers will be all-the-more important to its dealer and OEM customers; (iv) the company expects operating expenses as a percentage of revenue to continue in the low 30% range as it increases investments in technology, and sales and marketing resources in 2017; (v) that the company expects gross margin to remain in the mid-30% range over the next two quarters as it focuses on the optimization of traffic acquisition costs; (vi) the company expects its 2017 revenue to range between $144.0 million and $148.0 million; (vii) the company expects its 2017 non-GAAP income to range between $10.5 million and $11.1 million; and (viii) the company expects its 2017 non-GAAP EPS to range between $0.78 and $0.82 on 13.5 million shares (noting that for comparative purposes, the foregoing percentage growth calculations, and the 2016 non-GAAP EPS, exclude 2016 revenues, non-GAAP income and non-GAAP EPS related to the company’s specialty finance leads product that was divested on December 31, 2016), 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. 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 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 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 the company's Annual Report on Form 10-K for the year ended December 31, 2016 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 Autobytel and the market price of the company's stock.

Company Contact

Kimberly Boren

Chief Financial Officer

949-862-1396

kimb@autobytel.com

Investor Relations Contact

Sean Mansouri or Cody Slach

Liolios Investor Relations

949-574-3860

ABTL@liolios.com

AUTOBYTEL INC.

UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

(Amounts in thousands, except share and per-share data)

	June 30,	December 31,
	2017	2016
Assets
Current assets:
Cash and cash equivalents	$44,555	$38,512
Short-term investment	252	251
Accounts receivable (net of allowances for bad debts and customer credits of $889 and $1,015 at June 30, 2017 and December 31, 2016, respectively)	25,219	33,634
Deferred tax asset	-	4,669
Prepaid expenses and other current assets	1,449	901
Total current assets	71,475	77,967
Property and equipment, net	4,504	4,430
Investments	680	680
Intangible assets, net	21,035	23,783
Goodwill	42,821	42,821
Long-term deferred tax asset	25,832	14,799
Other assets	694	801
Total assets	$167,041	$165,281
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$8,491	$9,764
Accrued employee-related benefits	2,065	4,530
Other accrued expenses and other current liabilities	7,498	8,315
Current portion of term loan payable	4,125	6,563
Total current liabilities	22,179	29,172
Convertible note payable	1,000	1,000
Long-term portion of term loan payable	6,000	7,500
Borrowings under revolving credit facility	8,000	8,000
Total liabilities	37,179	45,672
Commitments and contingencies	-	-
Stockholders' equity:
Preferred stock, $0.001 par value; 11,445,187 shares authorized
Series A Preferred stock, none issued and outstanding	-	-
Series B Preferred stock; shares issued and outstanding as of June 30, 2017 and December 31, 2016 was 0 and 168,007, respectively	-	-
Common stock, $0.001 par value; 55,000,000 shares authorized; 12,868,769 and 11,012,625 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively	13	11
Additional paid-in capital	352,979	350,022
Accumulated deficit	(223,130)	(230,424)
Total stockholders' equity	129,862	119,609
Total liabilities and stockholders' equity	$167,041	$165,281

AUTOBYTEL INC.

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands, except per-share data)

	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2017	2016	2017	2016
Revenues:
Lead fees	$26,347	$30,508	$55,439	$62,504
Advertising	7,999	5,275	15,967	9,041
Other revenues	245	365	526	850
Total revenues	34,591	36,148	71,932	72,395
Cost of revenues	23,955	22,227	48,385	44,839
Gross profit	10,636	13,921	23,547	27,556
Operating expenses:
Sales and marketing	3,229	4,384	6,992	10,061
Technology support	3,188	3,645	6,441	7,832
General and administrative	2,791	3,686	6,273	7,059
Depreciation and amortization	1,201	1,254	2,430	2,540
Litigation settlements	(25)	4	(50)	(1)
Total operating expenses	10,384	12,973	22,086	27,491
Operating income	252	948	1,461	65
Interest and other income (expense), net	(96)	(213)	(196)	(437)
Income (loss) before income tax provision (benefit)	156	735	1,265	(372)
Income tax provision (benefit)	(166)	305	459	(127)
Net income (loss) and comprehensive income (loss)	$322	$430	$806	$(245)
Basic earnings (loss) per common share	$0.03	$0.04	$0.07	$(0.02)
Diluted earnings (loss) per common share	$0.02	$0.03	$0.06	$(0.02)
S hares used in computing earnings (loss) per common share (in thousands):
Basic	11,149	10,593	11,030	10,551
Diluted	13,344	13,295	13,326	10,551

AUTOBYTEL INC.

RECONCILIATION OF NON-GAAP INCOME / EPS

(Amounts in thousands, except per-share data)

	Three Months Ended		Six Months Ended
	March 31, 2017	June 30, 2017	June 30, 2017
Net income	$484	$322	$806
Amortization of acquired intangibles	1,387	1,359	2,746
Non-cash stock based compensation
Cost of revenues	20	19	39
Sales and marketing	412	402	814
Technology support	127	134	261
General and administrative	452	389	841
Total non-cash stock-based compensation	1,011	944	1,955
Acquisition costs	-	-	-
Severance costs	-	57	57
Litigation settlements	(25)	(25)	(50)
Income taxes	625	(166)	459
Non-GAAP income	$3,482	$2,491	$5,973
Weighted average diluted shares	13,309	13,344	13,326
Diluted GAAP EPS	$0.04	$0.02	$0.06
EPS impact of adjustments	0.23	0.16	0.39
Non-GAAP EPS	$0.26	$0.19	$0.45

AUTOBYTEL INC.

RECONCILIATION OF NON-GAAP INCOME / EPS

(Amounts in thousands, except per-share data)

	Three Months Ended March 31, 2016			Three Months Ended June 30, 2016				Six Months Ended June 30, 2016
	As Reported	Specialty Finance	Adjusted		As Reported	Specialty Finance	Adjusted		As Reported	Specialty Finance	Adjusted
Net income (loss)	$(676)	$73	$(749)		$430	$70	$360		$(245)	$143	$(388)
Amortization of acquired intangibles	1,426	-	1,426		1,403	-	1,403		2,829	-	2,829
Non-cash stock based compensation
Cost of revenues	14	-	14		15	-	15		28	-	28
Sales and marketing	633	20	613		341	20	321		974	40	934
Technology support	329	-	329		92	-	92		422	-	422
General and administrative	388	-	388		418	-	418		806	-	806
Total non-cash stock-based compensation	1,364	20	1,344		866	20	846		2,230	40	2,190
Acquisition costs	429	-	429		148	-	148		577	-	577
Severance costs	839	-	839		-	-	-		839	-	839
Litigation settlements	(5)	-	(5)		4	-	4		(1)	-	(1)
Income taxes	(432)	46	(478)		305	50	255		(127)	96	(223)
Non-GAAP income	$2,945	$139	$2,806		$3,156	$140	$3,016		$6,102	$279	$5,823
Weighted average diluted shares	13,346	13,346	13,346		13,295	13,295	13,295		13,412	13,412	13,412
Diluted GAAP EPS	$(0.06)	$0.01	$(0.07)		$0.03	$0.01	$0.03		$(0.02)	$0.01	$(0.04)
EPS impact of adjustments	$0.27	$0.00	$0.27		$0.21	$0.01	$0.20		$0.47	$0.01	$0.46
Non-GAAP EPS	$0.22	$0.01	$0.21		$0.24	$0.01	$0.23		$0.45	$0.02	$0.43

AUTOBYTEL INC.

RECONCILIATION TO REFLECT DIVESTITURE OF

SPECIALTY FINANCE LEADS PRODUCT

(Amounts in millions, except per-share data)

	2016
	QTD 3/31/16			QTD 6/30/16				QTD 9/30/16				QTD 12/31/16				YTD 12/31/16
	As Reported	Specialty Finance	Adjusted		As Reported	Specialty Finance	Adjusted		As Reported	Specialty Finance	Adjusted		As Reported	Specialty Finance	Adjusted		As Reported	Specialty Finance	Adjusted
Total Revenues	$36.2	$1.6	$34.6		$36.1	$1.6	$34.6		$43.9	$1.7	$42.2		$40.4	$1.4	$39.0		$156.7	$6.3	$150.4
Cost of revenues	22.6	1.2	21.4		22.2	1.2	21.0		28.2	1.2	26.9		25.8	1.0	24.7		98.8	4.7	94.1
Gross profit	13.6	0.4	13.2		13.9	0.4	13.5		15.8	0.4	15.3		14.6	0.4	14.2		57.9	1.7	56.3
Operating expenses	14.5	0.3	14.2		13.0	0.3	12.7		11.5	0.3	11.2		12.8	0.4	12.4		51.8	1.3	50.5
Operating income (loss)	(0.9)	0.1	(1.0)		0.9	0.1	0.8		4.3	0.1	4.1		1.8	(0.0)	1.9		6.1	0.3	5.8
Interest and other income (expense), net	(0.2)	-	(0.2)		(0.2)	-	(0.2)		(0.2)	-	(0.2)		1.2	-	1.2		0.6	-	0.6
Income (loss) before income tax provision (benefit)	(1.1)	0.1	(1.2)		0.7	0.1	0.6		4.1	0.1	3.9		3.0	(0.0)	3.1		6.7	0.3	6.3
Income tax provision (benefit) (1)	(0.4)	0.0	(0.5)		0.3	0.0	0.3		1.3	0.0	1.3		1.6	(0.0)	1.7		2.8	0.1	2.7
Net income (loss) and comprehensive income (loss)	$(0.7)	$0.1	$(0.7)		$0.4	$0.1	$0.4		$2.7	$0.1	$2.6		$1.4	$(0.0)	$1.4		$3.9	$0.2	$3.7
Non-GAAP Income	$2.9	$0.1	$2.8		$3.2	$0.1	$3.0		$6.5	$0.2	$6.3		$4.7	$0.0	$4.7		$17.3	$0.5	$16.8
Non-GAAP EPS	$0.22	$0.01	$0.21		$0.24	$0.01	$0.23		$0.49	$0.01	$0.47		$0.35	$0.00	$0.35		$1.30	$0.03	$1.27

(1) Tax provision for specialty finance leads standalone is computed using consolidated effective tax rate multiplied by finance leads income before income tax.

EX-99.2

Exhibit 99.2

NASDAQ - AUTOBYTEL

Moderator: Sean Mansouri

August 03, 2017

5:00 p.m. ET

OPERATOR:	This is Conference #55004737
Operator:	Good afternoon everyone and thank you for participating in today’s conference call to discuss Autobytel’s financial results for the second quarter ended June 30, 2017.
	Joining us today are Autobytel’s president and CEO, Jeff Coats, the company’s CFO, Kimberly Boren, and the company’s outside investor relations advisor, Sean Mansouri with Liolios Group.
	Following their remarks, we’ll open the call for your questions. I would now like to turn the call over to Mr. Mansouri for some introductory comments.

Sean Mansouri:	Thank you. Before I introduce Jeff, I remind you that during today’s call, including the question and answer session, any projections and forward-looking statements made regarding future events Autobytel’s future financial performance are covered by the safe harbor statements contained in today's press release, the slides accompanying this presentation, and the company's public filings with the SEC.
	Actual events may differ materially from those forward-looking statements. Specifically, please refer to the company’s form 10-Q for the quarter ended June 30, 2017, which was filed prior to this call as well as other filings made by Autobytel with the SEC from time to time.
	These filings identify factors that could cause results to differ materially from those forward-looking statements. There are slides included with today’s presentation to help illustrate some of the points being made and discussed during the call. The slides can be accessed by visiting Autobytel’s website at Autobytel.com.
	When there, go to Investor Relations, and then click on events and presentations. Please also know that during this call, and/or in the accompanying slides, management will be disclosing non-GAAP income and non-GAAP EPS.
	For purposes of its 2017 guidance, we’ll be adjusting 2016 revenues, non-GAAP income and non-GAAP EPS to reflect the exclusion of the company’s specialty finance leads product that was divested at December 31, 2016.
	And for year over year comparisons, prior year results, with the exception of cash flow from operations for all periods presented are adjusted to exclude the company’s specialty finance leads product.
	These are non-GAAP financial measures as defined by SEC regulation G. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in today’s press release and/or in the slides, which are posted on the company’s website. And with that, I'll turn the call over to Jeff.

Jeff Coats:	Thank you, Sean. Good afternoon everyone. Thank you for joining us today to discuss our second quarter 2017 results.
	As a reminder to those of you who are new to Autobytel, we are a pioneer and leading provider of online digital automotive services, connecting in-market car buyers with our dealer and manufacturer customers.
	As discussed on our first quarter earnings call, 2017 is proving to be a choppy year. Following a robust beginning to the first quarter, we began seeing a softening in the automotive market moving into the second quarter. While we are still seeing the expected seasonal improvement in the third quarter, the market softness appears to be continuing.
	We made significant headway in our objectives for 2017; we continue on our investments in technology, consumer acquisition, the AutoWeb ad platform, and our consumer facing sites.
	The metrics for usedcars.com have also expanded quickly. Usedcars.com traffic grew 60 percent year over year in the second quarter, with low time – with site low time improving by 72 percent, which correspondingly reduced our bounce rate by more than 9 percent since the re-launch.
	Despite a softening macro environment in the auto industry, the traffic acquisition issue noted in our press release today and the normal seasonal setback from Q1, we continue to grow strongly our clicks business in the second quarter.
	We continue to qualify and integrate additional new traffic sources to further accelerate growth in our clicks business, which will likewise support our leads business.
	The paid search field has become more complex, with many of our paid traffic partners moving towards audience expansion marketing, which is sometimes called similar or look-alike audiences.
	During Q2, we identified that some of these audience expansions were not converting to automotive purchases at a range of close rates acceptable to us.
	This led us to halt the traffic campaign in the second quarter. We are actively working to implement solutions, and have already begun to rebuild our original higher-quality traffic stream.
	We are also continually looking to expand our methods and sources of traffic generation for both leads and clicks and are constantly using close rate data to identify if these new traffic sources are performing to our high-quality standards.
	Given the actions we are taking to address these traffic issues, and the widely accepted expectation for auto sales decline in 2017, we are lowering our 2017 revenue and adjusted EPS outlook. Over the coming months, we expect to work through these issues and reestablish our revenue and margin profiles.
	We have a variety of initiatives in place that are meant to further diversify our traffic acquisition, which we believe should provide a meaningful amount of high quality traffic to help mitigate the loss of the other traffic campaigns.
	Before commenting further, I’d like to turn the call over to Kim and have her take us through the important details of our Q2 financial results. Kim?

Kimberly Boren:	Thanks, Jeff, and good afternoon everyone. As noted in our press release today, for year over year comparative purposes, the results for all periods presented and discussed on our call today, exclude our specialty finance leads product, which was divested on December 31, 2016.
	For those of you following along with our earnings presentation, on slide six, you can see our quarter revenues worth 34.6 million, essentially unchanged compared to the prior year adjusted quarter.
	Advertising revenues increased 52 percent to $8 million, with click revenues up 76 percent to $6.5 million.
	Moving to slide seven, you’ll see that we delivered approximately 2 million automotive leads during the second quarter, compared to 2.1 million last year; a slight reduction, resulting primarily from the eliminated traffic discussed earlier. Note that this lead volume reflects all leads sold to both the retail and the wholesale channels.
	As a reminder, the retail channel comprises leads sold directly to dealers, whereas our wholesale channel reflects leads sold to OEMs and wholesale partners that are then distributed to dealers.
	On slide eight, you'll see that dealer counts stood at 24,464 at June 30th; a 2 percent decrease from Q1, driven primarily by changes at the wholesale level.
	Similar to our leads breakout, this dealer count reflects all of the dealers we sell leads to, including both the wholesale and retail channels for new cars. Moving on to advertising, our advertising revenues increased 52 percent to $8 million compared to $5.3 million in the year-ago quarter.
	The growth was once again due to a significant increase in click revenues. On slide nine, you’ll see click revenues increased 76 percent to $6.5 million compared to $3.7 million in the same period last year.
	The increase was driven by continued strong customer demand despite the traffic acquisition issue and the usual seasonal step-back from Q1. Now moving to slide 10, gross profit during the second quarter was $10.6 million compared to an adjusted $13.5 million in the year-ago quarter.
	Gross margin for the quarter came in lower than expected at 30.7 percent compared to an adjusted 39.1 percent as a result of the investment in additional traffic acquisition beginning in Q3’16, combined with the aforementioned traffic issues.
	We expect gross margin to continue in the low 30 percent range as we focus on rebuilding original high-quality traffic stream and optimizing traffic acquisition costs.
	Total operating expenses in the second quarter decreased 18 percent to $10.4 million compared to an adjusted $12.7 million in the year-ago quarter. The decrease was driven by the reduction of headcount and related expenses.
	As a percentage of revenues, total operating expenses were 30 percent compared to an adjusted $36.7 percent for the year-ago quarter. We expect our opex as a percentage of revenue to continue in the low 30 percent range.

	On the GAAP basis, net income in the second quarter was $322,000 or $0.02 per diluted share on 13.3 million shares, compared to adjusted net income of $360,000 or $0.03 per share on 13.3 million shares in the year-ago quarter.
	For the second quarter, non-GAAP income, which adds back amortization on acquired intangibles, non-cash stock-based compensation, acquisition costs, severance costs, gain or loss on investment or sale, litigation settlements, and income taxes was $2.5 million or $0.19 per diluted share, compared to an adjusted $3 million or $0.23 per diluted share in the second quarter of 2016.
	The decrease is primarily driven by market softness and the aforementioned traffic issues. Cash provided by operations in the second quarter improved to $6.5 million compared to $4.6 million, unadjusted, in the prior year quarter.
	On slide eleven, you’ll see that our cash balance remains strong and continues to grow despite debt pay-down, with cash and cash equivalents of $44.6 million at June 30th, 2017 compared to $38.5 million at December 31st, 2016.
	Total debt at June 30th, 2017 was reduced to $19.1 million compared to $23.1 million at the end of 2016. With that, I’ll now turn the call back over to Jeff.
Jeff Coats:	Thank you, Kim. Before getting into some of the usual quarterly metrics, I’d like to provide some more color on the traffic issues discussed earlier. To be more specific, the campaigns we identified were not sustainable from a conversion rate perspective.
	This traffic exhibited classic characteristics that indicated a propensity for high quality, including a strong conversion rate to leads, but ultimately did not convert to automotive purchases at an acceptable range of close rates for the vehicle selected.
	The impact of the eliminated traffic and the actions we have taken to address this issue had a negative effect on Q2 revenues, and more so gross margins.
	As I mentioned, we have a variety of initiatives in place that are meant to diversify our traffic acquisition to help offset the loss of these campaigns. We continue to believe the advancements we’re making in digital automotive marketing will pay dividends in the months and years to come.
	Today, most dealers know very little about users visiting their website and the majority of dealers display the same messaging to every single user that visits their site.
	Consumers are getting more and more sophisticated regarding digital marketing and the days of one-size-fits-all is becoming a relic of the past. But with big data, machine learning, and audience management, dealers can and should provide a more relevant user experience.
	Our technology focus is on pinpointing specific consumer characteristics that are influential in the car-buying process to optimize ad-spend for car dealers and make car research and buying easier for consumers.
	The technology will expand and meaningfully improve our already extensive process of traffic optimization and will enable us to analyze endless behavioral and contextual signals from consumers to ensure that we’re presenting the right message to the right person at the right time.

We are ultimately developing a more efficient pathway to purchase for consumers, while offering better ROI for dealers and OEMs through highly targeted clicks and leads as opposed to a mass target campaign.

In our clicks business, we’re continuing to increase click volumes with existing clients and have added new dealers, OEMs, and advertising customers.

As I’ve mentioned in the past, our strong growth in clicks up to this point has only come from a small number of customers, so there’s plenty of room for ongoing growth.

It should be noted that even though we have seen strong click growth in revenue, this growth has been limited by the elimination of traffic campaigns that we referenced earlier.

Also, as I mentioned earlier, the usedcars.com site is gaining traction. Q2 traffic is up 60 percent year over year and after working collaboratively with Google, our engineers have improved site load time by 72 percent, which is truly an exciting development. We will continue to work with our Google experts to adopt more adaptive experiences to create an optimal user flow.

As we continue to improve the user experience for our consumers and expand our inventory across usedcars.com, we will accelerate our approach and mission to drive new traffic in the coming quarters.

We have a lot of opportunity to grow here as our paid SEM efforts only represent a fraction of our overall investment and we have a clear path to get there.

We are creating a mobile first experience that we believe will allow us to reach all in-market consumers with ease. On slide thirteen, you’ll see that our estimated average buy rate for internally generated leads in the second quarter was 17 percent, which remains within our targeted range of 16 to 24 percent.

Because of our ongoing commitment to lead quality, we are continuing to focus on enhanced methodologies to meaningful increase the mix of internally generated leads from the current 80 percent level, while only utilizing volume from a small number of trusted suppliers who share our commitment to quality.

On slide fourteen, you’ll also note that these estimated buy rates have remained consistently strong since Q1 2011, with autobytel.com generating an average buy rate of 26 percent, and all Autobytel internally generated leads at about 18 percent.

Moving on to the industry outlook, as you can see on slide fifteen, J.D. Power LMC Automotive has the seasonally adjusted annual run rate, or SAAR, for total sales at 17.2 million units for July 2017, which is down 4 percent compared to one year ago and up from 16.5 million units in June.

In addition, on AutoNation’s earnings call yesterday, Mike Jackson noted that they expect SAAR for 2018 to be in the high 16 to low 17 million unit range.

And on slide sixteen, you’ll see that J.D. Power LMC Automotive again reduced the forecasted full year 2017 total light-vehicle sales to 17 million units and retail light vehicle sales to 13.8 million units, both down from 2016. Moving now to our 2017 business outlook, highlighted on slide seventeen.

	As I mentioned earlier, due to the actions we’re taking to address traffic issues and the widely accepted expectation for auto sales to decline in 2017, we now expect revenue to range between $144 million and $148 million, which compares to our previous guidance range of $156 million to $160 million.
	We also expect non-GAAP income to range between $10.5 million and $11.1 million, which compares to our previous guidance range of $16.8 million to $17.3 million. And expect non-GAAP diluted EPS to range between $0.78 and $0.82 on 13.5 million shares, compared to our previous guidance of $1.24 to $1.28.
	Though our near-term focus will be placed on resolving the traffic and related margin issues, we have not lost sight of our core growth objectives, and remain committed to expanding our used car leads and clicks businesses.
	The key will be to personalize the consumer experience on our website, landing pages, and display networks to ensure we’re delivering the right message to the right audience with optimal timing.
	We will also renew our focus on operating efficiencies, and have begun to further improve our internal data analytics capabilities and related reporting to ensure that we can better and more quickly detect any potential disruptions in traffic quality down the road.
	Given the expectation for auto sales to decline in 2017, we believe that our delivery of high-intent car buyers will be all the more important to our dealer and OEM customers. Operator, at this time we’ll take questions.
Operator:	Thank you, Sir. Ladies and gentlemen, if you do have a question at this time, please press star then one on your touchtone telephone. If at any time your question has been answered or you wish to remove yourself from the queue, please press the pound key.
	To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question is from Sameet Sinha with B. Riley. Your line is now open.
Sameet Sinha:	Yes, thank you very much. A couple of questions, so if you’re talking about the revenue side of the equation, you mentioned that there were some changes at a wholesale program. Can you elaborate on that? And secondly, if you can also talk about are you seeing the – just overall dealers reducing the number of leads they buy or is it just number of dealers we’re churning out of the program? And then, I have a second question about that traffic issue.
Jeffrey Coats:	OK. The wholesale issue that you referenced, it really is more a typical kind of function of what happens at the wholesale level as they reduce coverage for us with different dealers.
	In this particular case, the reduction probably had more to do with some of the quality concerns that we were seeing. This all started in the last few months of 2016. We began working to diagnose it and understand where it was coming from.
	We – as you know, we were looking at a lot of different and optimizing for a lot of new traffic sources. So it took us a while to get through everything and ultimately identify the primary issues.
	And during that period of time, some of our wholesale customers were the first ones to notice the decline in quality and we were hearing from them. So that reaction was a little bit of function of that.

Kimberly Boren:	In regard to the second question, Sameet, we actually increased our leads per dealer in the second quarter, from a year-over-year perspective. So we are not seeing a decline in the number of leads per dealer.
Jeffrey Coats:	And it’s really – on the leads side, it’s not really a demand issue. It’s a supply issue, related to the traffic issue. We still have seen, and continue to see, pretty strong demand at both the dealer and the wholesale levels. Candidly, the reduction in our guidance for the rest of the year is totally a supply issue.
	It’s – you know, we’re beginning to build back our traffic flow. We’re beginning to have some of our accounts re-learned. And as that process continues, we’ll have a much better idea of how quickly we should be able to get back to them on more normal kind of situation.
Sameet Sinha:	OK. Second question regarding the traffic issues and I think you alluded to it, that softness is also going to impact the AutoWeb business. Can you talk to us about, you know, what’s the interplay?
	I know that some traffic was being diverted towards AutoWeb. How are you planning to fix the situation in the core business? And how much should we – and if you can talk about how much of your full year guidance reduction – or second half reduction, is a reduction of the lead business versus the AutoWeb – Autoclicks, sorry.
Jeffrey Coats:	OK. It – it’s really …
Kimberly Boren:	Sure. So in, moving back to the first question, about 70 percent of the click volume comes from our internal traffic generation and probably about 70 percent of that comes from the lead traffic – or I should say, initiates with the lead traffic. So, we saw some softness with that -- there that did impact the clicks business in the second quarter. We would have expected it to probably be at least 10 percent higher, had that not happened. So, I would say the majority of the revenue decline in guidance is a result of the lead revenue -- with a small component being on the click side.
Sameet Sinha:	Thank you.
OPERATOR:	Our next question is from Ed Woo with Ascendiant Capital. Your line is now open.
Edward Woo:	Yes, thank you for taking my question. I know you mentioned a little bit about the timing, about how you noticed some of the Holiday issues, right at the end of last year.
	And just curiosity, you know how did it -- the future does it seem to have accelerated a lot in the second quarter, and how quickly do you think you can get this -- I guess -- stabilized to get this back on track?
Jeffrey Coats:	The second part of your question, we are -- we, as I said, finally fully diagnosed everything -- relatively in -- light in the second quarter. We have been working hard in order to figure out the timing on that.
	We’ve already seen the beginnings of a recovery so far during the month of July -- as we move into the stronger third quarter period of the year.

	So, candidly, and we just need a couple more months of what’s going on with our accounts, and really getting through this period in order to figure out what it should look like. So, we would anticipate we can give a much more definitive answer to that question, on the third quarter earnings call -- a much better feel for a true timeline on that. We began hearing from some of our OEM customers -- like I’ve mentioned in 2016-- we had a lot of different traffic programs going. But several people -- we had started trying to do some new stuff ourselves.
	So, we began working through the programs that we would have expected might have yielded the lower quality first -- some of the new stuff we were trying, as well as -- we looked into perhaps some of our outside suppliers, having an issue in some of the stuff they were sending to us.
	As we turned these things off, or -- and back on -- over the course of those months. It took us awhile to finally get to the area where we had the primary issue -- which again, was pretty deep into 2017 -- which is one of the reasons I said we are absolutely already beginning to significantly upgrade our analytics, and reporting capabilities.
	Our new clicks business and the traffic acquisition, we do as part of that, is much more sophisticated than our -- older analytics capabilities could support, and so, we are -- we’re a little behind on getting all of that development work done.
	But we are in process and we are getting that done. It’s not so much that it picked up and was more pronounced in the second quarter -- it’s once we understand what was going on. We had been buying this particular traffic source for a period of time.
	And had optimized around it for -- quite significantly in a number of our accounts, and really -- we had really no choice but to just, almost immediately, turn it off.
	It was really just generating some pretty poor quality. And, when we start hearing loud issues at the manufacturer level, it has really gone too far. So, we’re addressing that, we’re working with all of our customers to make sure they understand. We’re working with our traffic suppliers, and a supplier in particular -- in order to improve the situation -- yet our regular traffic stream is back on track in order to begin generating the higher volumes. We don’t have all of the answers today; we’ve been working hard to try to figure that out.
	I think fortunately, we are working through this during a pretty robust period, which is actually a good period of time to really dig into it, and understand it better, because we should normally face some lift and some pretty strong abilities this quarter. So, we’re working through it as quickly as we can. It really is an all hands on deck kind of a situation.
Edward Woo:	All right, I think it was previously mentioned that it’s -- you know -- the majority of the decline in revenue guidance is more of a supply issue as opposed to a demand issue; so, is it as simple as you can’t get the good quality lead, so you can’t sell it?
Jeffrey Coats:	It’s that we can’t get the good quality traffic to generate the -- leads and traffic related to that at margin levels that we can stomach. You can already see the effect on our gross margin in the second quarter of the beginning of dealing with this, as we’ve begun paying up -- for traffic.
	So, we just have to work through this – again, it’ll take a little bit of time as we work through, but we should be able to further improve our margins for the remainder of this year; and as I said, we would think by the third quarter earnings call we should be able to give you guys some more definitive answers on timing, on timing and the future opportunity.

	We are still bullish about the business, the usedcars.com situation is extremely exciting. We have a very good brand there. Our partners at Google are working with us to optimize that site. We are very bullish about that. It unfortunately comes – this other issue comes in the middle of a lot of that and it really, kind of, throws off some of our momentum.
	The clicks business is still a strong business, as Kim mentioned earlier. It has mostly been driven by the abandonment traffic from our lead forms thus far, which has always historically been very high volume, very high quality.
	We are qualifying additional traffic sources and as we get everything back on track, we would expect to see strong growth in our clicks business again as well. So we have those two strong growth opportunities still in front of us and we feel very bullish about them.
Edward Woo:	Great, well, thank you for answering my questions. You were very thorough and I wish you guys the best of luck. Thank you.
Jeffrey Coats:	Thank you, Ed.
Kimberly Boren:	Thanks, Ed.
Operator:	As a reminder, ladies and gentlemen, if you would like to ask a question, please press star then one. Our next question is from Bruce Goldfarb with Lake Street Capital Markets. Your line is now open.
Bruce Goldfarb:	Hi, everyone. Hope you guys are well. I – so I – couple questions. First, are OEMs behaving differently amongst each other within regard to their appetite for leads?
Jeffrey Coats:	No, we’re not seeing anything any different. If anything, the last few months we’ve seen stronger demand for leads on the OEM side.
Bruce Goldfarb:	OK. And then, is your lead volume being more impacted by – I should add – I should add that, by unit-to-clients, or dealer churn, or is it more just the supply issue?
Jeffrey Coats:	It’s predominately the supply problem. It’s the traffic, which we then generate the leads, that’s the primary problem. Dealer churn does affect it a little bit, but it’s certainly a much smaller impact. Significantly smaller impact and what’s going on – on the supply side. We’re still seeing good dealer demand and good wholesale…
Bruce Goldfarb:	That was my next question, because I think it would – I think – you have mentioned in the past that when demand moderates – I mean, when the SAAR kind of moderates a little bit, that demand can pick up because dealers will get more aggressive in terms of marketing. You know - trying to move inventory?
Jeffrey Coats:	We have historically expected to see that. I would say some of what’s been going on the last few months is some of our quality issues have affected that – what would normally be some countercyclical quality because right now it’s – we got plenty of demand, we’re just not able to meet it with supply. And certainly not at margin levels that are tolerable. I mean, we – the gross margin we posted for the second quarter is not a margin that we are pleased with.
	And we are working strongly to bring that back round. As part of also, at the same time, rebuilding our overall traffic volume and working with our customers to make sure that they are getting the high quality leads that they demand.

Bruce Goldfarb:	And clicks.
	And then, just in terms of at least for July activity -- it sounds like things were kinda turning more positive, you indicated earlier?
Jeffrey Coats:	Yes, actually, we knew – we were seeing some softness in the industry moving into Q2. April’s a little softer than usual. May looked ok, but we didn’t really see the surge in June that we would normally expect to see.
	I mean, we still posted decent numbers for the quarter on both the top and the bottom line. But, we would have expected to be able to do, I would say, you know, meaningfully better than that, as we’ve seen our normal surge beginning in June, moving into July. We didn’t really see the June surge. We did start seeing more of that in July. But, even the improvement that we saw in July was not as pronounced as we would normally see. Some of this probably has to do with consumers and, you know, consumer sentiment. I don’t know if it’s affected by economic concerns or the concerns with Washington or whatever, we certainly don’t have a new tax regime in place, so that may affect how some people look at it, but we think that it’s still likely to be a pretty good year.
	We are beginning to recover from taking that large amount of traffic out of our mix. So, it’ll just take us a little bit of time. But as I said, we still have very strong growth attributes and used and clicks in front of us and we have a very strong – historically, a very strong new car business as well.
	So, we’ll work through this and we should be in a much more knowledgeable position by the third quarter earnings call to give everybody much more succinct answers on what we think the future is going to hold for us as we finish this year and roll into 2018.
Bruce Goldfarb:	Great, thank you very much. That’s all I had.
Jeffrey Coats:	Thank you.
Kimberly Boren:	Thank you, Bruce.
Operator:	At this time, this concludes our question and answer session. I would now like to turn the call back over to Mr. Coats for any closing remarks.
Jeffrey Coats:	Thank you. Thanks everybody for joining us today. I also want to thank our team of hardworking and dedicated employees. We look forward to speaking with all of you in the weeks and months ahead.
	We’ll be at the Liolios Gateway Conference in September in San Francisco. If we don’t see you in the interim, then we will be speaking with you on the third quarter earnings call in November. Thank you everybody.
Operator:	Ladies and gentlemen, this does conclude today’s teleconference. You may now disconnect your lines at this time. Thank you for your participation.

END