IRVINE, Calif. -

A year-over-year total revenue gain of more than 30 percent helped Autobytel shave its first-quarter net loss down significantly compared to the losses it sustained in earlier quarters.

Company officials calculated their first-quarter net loss amounted to $571,000 or 1 cent per share, which was sharply reduced from a net loss of $3.3 million or 7 cents per share for the preceding fourth quarter.

Autobytel recorded net income of $797,000 or 2 cents per diluted share during the first quarter of last year. However, excluding a $2.8 million credit to total operating expenses, the company acknowledged its net loss for the first quarter of 2010 would have been $2.0 million or 4 cents per share.

What compelled company leadership to say “outstanding progress” has been made is how Autobytel’s total first-quarter revenue grew 36 percent to $16.0 million, compared with $11.8 million for the 2010 first quarter of last year. The $16 million also represented a 9-percent increase from what the company posted in the preceding fourth quarter when its total revenue came in at $14.7 million.

Purchase request revenue — what the company stressed is its principal business — grew 39 percent during the first quarter when compared to the year-ago period. Against the fourth-quarter amount, Autobytel indicated this revenue stream ticked up 9 percent.

“The improvements reflect significantly increased sales of wholesale purchase requests resulting from the acquisition of Cyber Ventures and Autotropolis in September 2010, including purchase requests sold directly or indirectly to automobile manufacturers through third party customers,” company officials explained.

Comparing year-over-year, Autobytel acknowledged that its first-quarter advertising revenue slipped to $1.0 million from $1.1 million in the first quarter of 2010. The company said the slight decline reflected a reduction in monetized page views and the effect of poor quality traffic that has since been eliminated.

However, the company computed its advertising revenue grew 17 percent from the fourth quarter of last year. Management thinks the gain was attributable in part to the benefit of additional page views on Autobytel’s websites.

“Autobytel made outstanding progress in the first quarter,” Autobytel president and chief executive officer Jeffrey Coats declared.

“Our financial results reflected the benefits of acquiring Cyber Ventures and Autotropolis last September, which changed our course by enabling Autobytel to sell a substantially increased volume of higher quality, internally-generated automobile purchase requests to auto manufacturers and dealers,” Coats continued. “Our performance also reflects actions that have been taken over the past two years to reduce operating expenses and re-position Autobytel for profitable growth.

“As 2011 unfolds, our positive momentum is continuing, and we are on the path of continued progress,” he went on to say. “We achieved positive non-GAAP cash flow for the first quarter, and although the automotive sector is seeing some market disruption from the earthquake and tsunami in Japan, we continue to believe that Autobytel is well positioned for growth and that we will remain non-GAAP cash flow positive in the second quarter of 2011.”

More Analysis of Results

Along with specifics about net losses and revenue, Autobytel reported its first-quarter gross profit was up almost 30 percent comparing year-over-year. As a percentage of revenue, the company determined gross margin ticked down slightly to 38.4 percent from 40.2 percent in the year-ago quarter and from 39.3 percent for the fourth quarter.

“The year-over-year and sequential decline in gross margin is principally due to a shift in revenue mix, which provided increased gross profit dollars at a lower margin,” Autobytel explained.

“Both gross profit and gross margin rose in the latter half of the 2011 first quarter as the result of optimization initiatives related to search engine marketing, which are expected to be reflected in future periods,” the company added.

Officials also shared their total first-quarter operating expenses settled at $6.6 million, down from $9.0 million in the preceding fourth quarter. They mentioned the decline included costs related to a work force reduction and expenses associated with the acquisition of Cyber Ventures and Autotropolis.

The company’s total operating expenses for the first quarter of last year were $4.1 million, which included a $2.8 million credit to operating expenses related to patent litigation settlements, $2.7 million of which was the final payment of a $20.0 million settlement reached with a competitor in December 2006.

Excluding the credit, Autobytel’s total operating expenses for last year’s first quarter were $6.9 million.

Turning to its cash situation, the company revealed its cash flow used in first-quarter operations was $1.2 million, compared to $1.4 million in the year-ago time frame.

Autobytel said its non-GAAP cash flow was approximately $371,000 for the first quarter, a $2.7-million improvement from the preceding fourth quarter and down $1.0 million compared with the first quarter of last year. The year-ago quarter included a $2.7 million final patent litigation settlement payment.

Excluding the final patent litigation settlement payment, officials determined non-GAAP cash flow increased $1.7 million compared with the first quarter of 2010. Autobytel stressed non-GAAP cash flow is defined as EBITDA plus non-cash stock compensation.

Finally, the company indicated its cash and cash equivalents totaled $7.5 million as of March 31, compared with $8.8 million on Dec. 31.

John Honiotes Remembered

John Honiotes — a founding member of Autobytel and its first national sales director — passed away on May 3 at his home in Newport Beach, Calif. He was 63.

Honiotes, named by Automotive News as one of the 10 most innovative individuals in the industry for building one of the nation’s most technologically sophisticated dealerships, was the first to introduce dealerships to the concept of Internet vehicles sales. Leaders believe the Internet department model he developed continues as the norm in dealerships across the country today.

Additionally, the industry credits Honiotes for formulating the first Internet training programs for dealerships and was instrumental in creating the first Web-based customer relations management (CRM) system.

“John was a true automotive Internet pioneer and helped shape the careers of an entire generation of automotive leaders,” stated Dale Pollak, founder of vAuto.

Honiotes was born in Joliet, Ill., and began his automotive career nearly 40 years ago as a partner in a Dodge-Datsun dealership. In 1980 at age 33, he became the principal in a Cadillac dealership. People close to him said his lifelong passion for people, cars and technology led him to California where he joined the founding team at Autobytel and played a significant role in helping the industry realize the potential of the Internet.

In 1999, Honiotes built a sophisticated AutoNation USA megastore in the Cleveland-area community of Bedford, Ohio. The dealership was conceived from the ground up for Web-savvy consumers with design innovations that resulted in the Automotive News award. 

Honiotes rejoined Autobytel in 2002 as vice president of automotive operations, where he oversaw the continuing development of the company’s dealer network.

Recently, Honiotes served as vice president of sales for SpaBooker, the technology division of SpaFinder and as an automotive consultant.

Continuing his passion for vehicles and people, he founded the Honiotes Car Shows, which remain popular events in Southern California. He was also a dedicated supporter of the U.S. Marine Corps’ annual “Toys for Tots” program.

“Without question, John introduced me to more people and automotive technology, that have been instrumental to my success, than anyone in the industry,” said Bill Krouse, marketing director of Polar Chevrolet Mazda, located in White Bear Lake, Minn., northeast of Minneapolis.

“He always put the needs of others ahead of his own,” added Krouse, who also is president of Krouse Consulting.

John Honiotes’ father, Pete Honiotes, preceded him in death. He is survived by mother, Mary; his fiancée, Shari Malatesta; sisters Gail (Jerry) Austin, Lainie (Archie) Jenkins and Barb Honiotes; and brothers George (Denet), Jim (Mary Jo) and Pete (Sally). He is also survived by his daughter Tanna (John) Mee and grandsons John, Sean and Gavin Mee.