First Quarter 2022 Financial Summary
Q1 2022 | Q4 2021 | Q1 2021 | |
Total Revenues(millions) | |||
Gross Profit(millions) | |||
Gross Margin | 20.4% | 19.8% | 32.5% |
Net Loss(millions) | |||
Net Loss per share | |||
Adjusted EBITDA1(millions) |
First Quarter 2022 Key Operating Metrics
Q1 2022 | Q4 2021 | Q1 2021 | |
Lead Traffic2(millions) | 15.3 | 14.0 | 19.1 |
Lead Volume3(millions) | 0.9 | 0.9 | 1.2 |
Retail Dealer Count4 | 1,589 | 1,581 | 1,777 |
Retail Lead Capacity5 | 104,000 | 103,000 | 111,000 |
Click Traffic6(millions) | 30.5 | 23.7 | 23.2 |
Click Volume7(millions) | 5.6 | 4.3 | 5.3 |
CarZeus Quarterly Operating Metrics
Q1 2022 | Q4 2021 | Q3 2021 | |
Vehicles Purchased | 199 | 237 | 126 |
Vehicles Sold | 219 | 195 | 115 |
Average Sales Price Per Unit Sold | |||
Average Gross Profit Per Unit Sold |
1 Refer to the note below about Non-GAAP financial measures.
2 Lead traffic = total visits to AutoWeb’s owned lead websites.
3 Lead volume = total new and used vehicle leads invoiced to retail and wholesale customers.
4 Retail dealer count = the number of franchised dealers contracted for delivery of retail new vehicle leads plus the number of vehicle dealers (franchised or independent) contracted for delivery of retail used vehicle leads.
5 Retail lead capacity = the number of new and used vehicle leads contracted for by new or used retail vehicle dealers that the dealers wish to receive each month (i.e., “targets”) at the end of the applicable quarter.
6 Click traffic = total visits to AutoWeb’s owned click referral websites and
7 Click volume = the number of times during the applicable quarter that consumers clicked on advertisements on AutoWeb’s owned click referral websites and on
Management Commentary
“The overall environment within the automotive market continued to degrade during the first quarter, triggering a 50-year low in buying conditions for vehicles, according to data procured by the
“The unfavorable macro-economic conditions continue to significantly impact our operating cash flows. As a result, we’ve announced our board of directors has created a special committee to evaluate strategic alternatives for the company. Given the current financial constraints we are operating under, we have made the difficult decision to suspend our CarZeus used vehicle acquisition operations and furlough our employees within that segment. We still believe there is long-term growth potential for used vehicle acquisition within our digital media platform, but given the cash requirements to continue to grow the business, we made this decision to suspend its operations in an effort to conserve cash. We continue to believe in the underlying long-term value of our platform and will work tirelessly in our efforts to guide this business through these difficult times.”
Going Concern and Review of Strategic Alternatives
As disclosed in the company’s Form 10-Q for the first quarter ended
The company’s ability to continue as a going concern is contingent upon the successful execution of strategic alternatives and management’s near-term operating plans. There can be no assurance that the company will be successful in achieving any strategic alternative or management’s near-term operating plans.
The special committee and the company’s management team, working with the company’s financial, legal and other advisers, plan to proceed in a timely and orderly manner, but have not set a definitive timetable for completion of this process, nor have there been any decisions related to strategic alternatives at this time. The company undertakes no obligation to provide further disclosure regarding developments or the status of the special committee’s process or management’s near-term operating plans and does not intend to make such disclosure unless and until events warrant such disclosure or further disclosure is legally required.
Investors are encouraged to review the company’s Form 10-Q at www.autoweb.com (click on “Investors” and then click on “SEC Filings”).
First Quarter 2022 Financial Results
Total revenues in the first quarter of 2022 increased 7% to
Gross profit in the first quarter of 2022 was
Total operating expenses in the first quarter of 2022 were
Net loss in the first quarter of 2022 was
Adjusted EBITDA in the first quarter of 2022 was
At
At
Conference Call
Date:
Time:
Toll-free dial-in number: 1-877-852-2929
International dial-in number: 1-404-991-3925
Conference ID: 3084846
The conference call will also be broadcast live here and at www.autoweb.com (click on “Investors” 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
A replay of the conference call will be available after
Toll-free replay number: 1-855-859-2056
International replay number: 1-404-537-3406
Replay ID: 3084846
Tax Benefit Preservation Plan
At
The Plan was adopted by the company’s board of directors to preserve the company’s NOLs and other tax attributes, and thus reduce the risk of a possible change of ownership under Section 382 of the Internal Revenue Code. Any such change of ownership under Section 382 would limit or eliminate the ability of the company to use its existing NOLs for federal income tax purposes. In general, an ownership change will occur if the company’s 5% shareholders, for purposes of Section 382, collectively increase their ownership in the company by an aggregate of more than 50 percentage points over a rolling three-year period. The Plan is designed to reduce the likelihood that the company experiences such an ownership change by discouraging any person or group from becoming a new 5% shareholder under Section 382. Rights issued under the Plan could be triggered upon the acquisition by any person or group of 4.9% or more of the company’s outstanding common stock and could result in substantial dilution of the acquirer’s percentage ownership in the company. There is no guarantee that the Plan will achieve the objective of preserving the value of the company’s NOLs.
As of
About
Investors and other interested parties can receive
Note about Non-GAAP Financial Measures
The company’s management believes that presenting Adjusted EBITDA provides useful information to investors regarding the underlying business trends and performance of the company’s ongoing operations, as well as providing for more consistent period-over-period comparisons. This non-GAAP measure assists management in its operational and financial decision-making and monitoring the company’s performance. In addition, we use Adjusted EBITDA as a measure for determining incentive compensation targets. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the company’s consolidated financial statements in their entirety and to not rely on any single financial measure.
Forward-Looking Statements Disclaimer
The statements contained in this press release or that may be made during the conference call described above that are not historical facts are forward-looking statements under the federal securities laws. Words such as “anticipates,” “could,” “may,” “estimates,” “expects,” “projects,” “intends,” “pending,” “plans,” “believes,” “will” and words or phrases of similar substance, or the negative of those words, used in connection with any discussion of future operations, financial performance, plans, events, trends or circumstances can be used to identify some, but not all, forward-looking statements. In particular, statements regarding plans, expectations and opportunities, new product expectations and capabilities, projections, statements regarding future events, and our outlook regarding our performance and growth are forward-looking statements. These forward-looking statements, including, that (i) the company continues to believe in the underlying long-term value of its platform and will work tirelessly in its efforts to guide the business through these difficult times; and (ii) strategic alternatives that may be explored or evaluated as part of the company’s special committee process include, but are not limited to seeking debt or equity financing; sale or divestiture transactions, including a sale of the company or its assets; partnering/licensing transactions; and restructuring of the company’s debt and operations, including the possibility that the company may seek protection under the
Company Contact
Chief Financial Officer
949-225-4528
carlton.hamer@autoweb.com
Investor Relations Contact:
949-574-3860
AUTO@gatewayir.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Amounts in thousands, except share data) | ||||||||
2022 | 2021 | |||||||
ASSETS | (Unaudited) | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 3,792 | $ | 7,315 | ||||
Restricted cash | 4,317 | 4,314 | ||||||
Accounts receivable, net of allowances for bad debts and customer credits | ||||||||
of | 10,881 | 11,433 | ||||||
Vehicle inventory | 480 | 1,076 | ||||||
Prepaid expenses and other current assets | 631 | 998 | ||||||
Total current assets | 20,101 | 25,136 | ||||||
Property and equipment, net | 3,900 | 3,853 | ||||||
Right-of-use assets | 1,822 | 1,993 | ||||||
Intangibles assets, net | 3,340 | 3,634 | ||||||
Other assets | 474 | 516 | ||||||
Total assets | $ | 29,637 | $ | 35,132 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 7,249 | $ | 7,705 | ||||
Borrowings under revolving credit facility | 9,108 | 10,001 | ||||||
Accrued employee-related benefits | 1,517 | 1,782 | ||||||
Other accrued expenses and other current liabilities | 717 | 610 | ||||||
Current portion of lease liabilities | 729 | 781 | ||||||
Current portion of financing debt | 48 | 64 | ||||||
Total current liabilities | 19,368 | 20,943 | ||||||
Lease liabilities, net of current portion | 1,303 | 1,432 | ||||||
Total liabilities | 20,671 | 22,375 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity | ||||||||
* | Preferred stock, | |||||||
Series A Preferred stock, 2,000,000 shares authorized, none issued and outstanding at | - | - | ||||||
* | Common stock, | |||||||
14,051,149 and 13,489,482 shares issued and outstanding at | 14 | 13 | ||||||
Additional paid-in capital | 368,683 | 368,168 | ||||||
Accumulated deficit | (359,731 | ) | (355,424 | ) | ||||
Total stockholders' equity | 8,966 | 12,757 | ||||||
Total liabilities, minority interest and stockholders' equity | $ | 29,637 | $ | 35,132 | ||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(Amounts in thousands, except share and per share data) | ||||||||
Three Months Ended | ||||||||
2022 | 2021 | |||||||
Revenues: | ||||||||
Lead generation | $ | 10,576 | $ | 14,186 | ||||
Digital advertising | 4,137 | 3,694 | ||||||
Used vehicle sales | 4,351 | - | ||||||
Total revenues | 19,064 | 17,880 | ||||||
Cost of revenues: | ||||||||
Cost of revenues - lead generation and digital advertising | 10,954 | 12,071 | ||||||
Cost of revenues - used vehicles | 4,206 | - | ||||||
Total cost of revenues | 15,160 | 12,071 | ||||||
Gross profit | 3,904 | 5,809 | ||||||
Operating Expenses | ||||||||
Sales and marketing | 2,650 | 2,200 | ||||||
Technology support | 1,533 | 1,367 | ||||||
General and administrative | 3,562 | 3,132 | ||||||
Depreciation and amortization | 65 | 204 | ||||||
Total operating expenses | 7,810 | 6,903 | ||||||
Operating loss | (3,906 | ) | (1,094 | ) | ||||
Interest and other (expense) income: | ||||||||
Interest (expense) income, net | (266 | ) | (251 | ) | ||||
Other income | (9 | ) | 1,655 | |||||
Gain (loss) before income tax provision | (4,181 | ) | 310 | |||||
Income taxes provision | 126 | - | ||||||
Net income (loss) | $ | (4,307 | ) | $ | 310 | |||
Basic and diluted loss per share: | ||||||||
Basic loss per common share | $ | (0.32 | ) | $ | 0.02 | |||
Diluted loss per common share | $ | (0.32 | ) | $ | 0.02 | |||
Shares used in computing net loss per share: | ||||||||
Basic | 13,295 | 13,177 | ||||||
Diluted | 13,295 | 13,317 | ||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(amounts in thousands) | |||||||
Three Months Ended | |||||||
2022 | 2021 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) income | (4,307 | ) | 310 | ||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||
Depreciation and amortization | 569 | 641 | |||||
Provision for bad debts and customer credits, net of recoveries | (33 | ) | (40 | ) | |||
Forgiveness of PPP Loan | - | (1,384 | ) | ||||
Share-based compensation | 516 | 499 | |||||
Amortization of Right-of-use assets | 241 | 224 | |||||
Deferred income taxes | 110 | - | |||||
Changes in assets and liabilities | |||||||
Accounts receivable | 585 | 79 | |||||
Prepaid expenses and other current assets | 367 | 157 | |||||
Vehicle inventory | 596 | - | |||||
Other non-current assets | 42 | 91 | |||||
Accounts payable | (569 | ) | 598 | ||||
Accrued expenses and other current liabilities | (193 | ) | (583 | ) | |||
Lease Liabilities | (251 | ) | (242 | ) | |||
Net cash (used in) provided by operating activities | (2,327 | ) | 350 | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (209 | ) | (66 | ) | |||
Purchase of intangible asset | (75 | ) | - | ||||
Net cash used in provided by investing activities | (284 | ) | (66 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings under CNC credit facility | 18,627 | 18,144 | |||||
Payments under CNC credit facility | (19,520 | ) | (18,121 | ) | |||
Proceeds from exercise of stock options | - | 126 | |||||
Payments under financing agreement | (16 | ) | (15 | ) | |||
Net cash provided by (used in) financing activities | (909 | ) | 134 | ||||
Net increase in cash and cash equivalents and restricted cash | (3,520 | ) | 418 | ||||
Cash and cash equivalents and restricted cash at beginning of period | 11,629 | 15,107 | |||||
Cash and cash equivalents and restricted cash at end of period | 8,109 | 15,525 | |||||
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | |||||||
Cash and cash equivalents at beginning of period | $ | 7,315 | $ | 10,803 | |||
Restricted cash at beginning of period | 4,314 | 4,304 | |||||
Cash and cash equivalents and restricted cash at beginning of period | $ | 11,629 | $ | 15,107 | |||
Cash and cash equivalents at end of period | $ | 3,792 | $ | 11,218 | |||
Restricted cash at end of period | 4,317 | 4,307 | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 8,109 | $ | 15,525 | |||
Supplemental disclosures of cash flow information: | |||||||
Cash paid for interest | 216 | 215 | |||||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Purchases on account related to capitalized software | 113 | 300 | |||||
Right-of-use assets obtained in exchange for operating lease liabilities | 70 | - | |||||
RECONCILIATION OF ADJUSTED EBITDA | |||||||||
(Amounts in thousands) | |||||||||
Three Months Ended | |||||||||
Net income (loss) | $ | (4,307 | ) | $ | (2,609 | ) | $ | 310 | |
Depreciation and amortization | 569 | 564 | 640 | ||||||
Interest income | (3 | ) | (3 | ) | (3 | ) | |||
Interest expense | 269 | 264 | 253 | ||||||
Other income (expense) | 9 | 2 | 19 | ||||||
Federal, state and local taxes | 147 | 19 | 43 | ||||||
Non-cash stock compensation expense | 516 | 472 | 499 | ||||||
(Gain)/loss on PPP Loan Forgiveness | - | - | (1,394 | ) | |||||
(Gain)/loss on insurance reimbursement | - | - | (216 | ) | |||||
Adjusted EBITDA | $ | (2,800 | ) | $ | (1,291 | ) | $ | 151 | |
Source:
2022 GlobeNewswire, Inc., source