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Autobytel Expects Profit, Diluting Doubts

Cars: The online service credits higher revenue, more consumer Web use and an acquisition.

February 06, 2001|From Dow Jones

Despite reports questioning its viability, Chief Executive Mark Lorimer says the online vehicle referral service has plenty of cash and will be profitable in the second half of the year.

In a press briefing at the National Automobile Dealers Assn. Convention in Las Vegas, Lorimer said Autobytel has $125 million in assets and $81.9 million cash in the bank.

He said the Irvine company is also on track to be profitable from operations in the third quarter, but the company expects to have a nonrecurring charge during the quarter.

Autobytel's stock rose 16%, or 38 cents a share, on Monday, closing at $2.75 in Nasdaq trading. The shares, however, have lost nearly 75% of their value over the last year.

Initially, the company had not planned to turn a profit until 2002, Lorimer said. Lorimer wasn't specific about how profitable the company would be.

Lorimer attributes the company's sooner-than-expected profit to international revenue growth, increased use of the Web site by consumers and the added revenue from its CarSmart unit, which was acquired last February.

In acquiring rival CarSmart, Autobytel increased its network of new and used auto dealers by 1,500 to 4,800 and expanded its customer database by about 2 million people to more than 6.5 million.

"Profitability is going to distinguish us from our dot-com brethren," Lorimer said.

Recent reports have questioned Autobytel's survival prospects as dealers scale back from using third-party sites to get customers. In addition, Ford Motor Co. and General Motors Corp. have developed their own sites and are working to link dealer networks that have an Internet presence.

Autobytel also announced that it has created a system called iManager that will help dealers organize information about their customers.

The company said iManager will save dealers time and money because they can track customer appointments, inventory and service reports.

In addition, the system will allow dealers to send marketing information to consumers via e-mail instead of regular mail, saving them 70 cents to 80 cents per customer, the company said.

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