Though reporting an overall net loss as far as income goes, Autobytel emphasized the progress the company has made with its various revenue streams when the company revealed its third-quarter financial performance late last week.

Looking at specifics, the company indicated that its third-quarter net loss was $3.1 million, or 7 cents per share. The year-ago quarter’s net loss was $799,000 or 2 cents per share, which included a gain of $642,000 from discontinued operations related to the sale of the company’s AVV business in January 2008.

Autobytel said third-quarter revenue totaled $12.9 million. Although the amount was down from the $13.4 million Autobytel compiled in the third quarter of 2009, executives stressed how it marked a rise of about 7 percent from the previous quarter. The company posted $12.1 million in revenue in the second quarter of this year.

Elsewhere, the company indicated its third-quarter purchase request revenue increased 2 percent from the same quarter last year and 6 percent from the immediately preceding quarter. Autobytel determined those increases stemmed primarily from substantially improved wholesale OEM purchase request revenue.

Officials also noted their third-quarter advertising revenue declined to $1 million from $1.6 million in the year-ago period. However, the figure represented $869,000 rise from the preceding quarter thanks to an increase in direct marketing revenue.

In other elements of its financial report, Autobytel stated its third-quarter gross margin increased to 36.8 percent. The rise signaled a jump from both the year-ago quarter (35.5 percent) and the preceding quarter (35.0 percent).

“These increases are primarily attributable to a greater proportion of internally generated auto purchase requests,” company officials explained.

As a result of strategic investments to enhance Autobytel’s market position — including activities associated with its Cyber Ventures and Autotropolis acquisition — the company pointed out its total operating expenses in the third quarter were $7.9 million. A year ago, they were $6.2 million, and in the second quarter they settled at $7.5 million.

Again the company elaborated about why its expenses jumped.

“The increase was due largely to higher product development and personnel costs, particularly related to the consumer website re-design and platform improvements,” Autobytel insisted.

As a result, company officials calculated that they incurred an operating loss of $3.1 million in the third quarter. A year ago, Autobytel’s operating loss was $1.4 million.

Despite the aforementioned losses, Autobytel president and chief executive officer Jeffrey Coats remained upbeat.

“We have made tangible progress over the last several months by enhancing our internal purchase request generation capabilities, growing our dealer customer base and improving the consumer experience throughout our network of automotive websites,” Coats offered.

“Although significant challenges remain in the automotive industry, we are pleased with our ability to grow revenue on a sequential basis for the second consecutive period, add net new dealers in every month of the quarter, and complete a milestone acquisition that changes the competitive landscape and positions the company for growth in 2011,” he continued.

Coats elaborated what steps Autobytel is taking to improve its financial footing going forward.

“In connection with the acquisition, we also re-evaluated our business to ensure that the company is operating as efficiently as possible,” Coats explained.

“As a result, we recently initiated actions to reduce head count, which should eliminate approximately $3.2 million of annualized expenses,” he went on to say. “We have also identified approximately $1.8 million of annualized non-head count related operating expense and approximately $1.3 million of annualized cost of revenue savings. We believe these actions should result in approximately $6.3 million of total annualized savings going forward.”

Nine-Month Results

Autobytel also shared how the company has performed through the nine-month span that ended Sept. 30.

Autobytel computed that its revenue through the first nine months of 2010 totaled $36.9 million. In the year-ago period, it was $40.7 million.

Officials determined purchase request revenue for the year-to-date period declined 4 percent from the first nine months of last year. They added advertising revenue totaled $3 million for the nine months of 2010 versus $5.1 million for the corresponding period of 2009.

Also, Autobytel found that its gross margin improved to 37.3 percent for the 2010 year-to-date period from 34.8 percent last year.

The company’s operating expense climbed from $18.3 million to $19.5 million for the first nine months of the year. It resulted in an operating loss of $5.8 million versus $4.1 million a year ago.

The company wrapped up its financial report by sharing why its cash and cash equivalents declined. Autobytel said they dropped principally as a result of the acquisition of Cyber Ventures and Autotropolis in September and a $1 million investment in DriverSide.com, an online resource for vehicle owners. Those moves left the company with $10.3 million as of Sept. 30, down from $23.9 million at June 30 and from $25.1 million at Dec. 31, 2009.

“The acquisition of Cyber Ventures and Autotropolis was highly significant for Autobytel,” Coats stated.

“It enables us to generate a significantly greater number of high-quality, high-volume, in-market consumer automotive purchase requests for dealers and manufacturers as we continue to enhance the value we provide to the automotive industry and grow our company,” he concluded.