 Gross Profit up 11 to 6.0 Million; Generated Strongest Level of Gross Margin since 2016 Cost Controls and Operating Efficiencies Continue to Improve ProfitabilityTAMPA, Fla., Aug. 05, 2020 GLOBE NEWSWIRE -- AutoWeb, Inc. Nasdaq: AUTO, a robust digital marketing platform providing digital advertising solutions for automotive dealers and OEMs, is reporting financial results for the second quarter ended June 30, 2020.Our second quarter performance demonstrates the strong progress we have made in our turnaround, even as we navigate the effects of the coronavirus pandemic, said Jared Rowe, President and CEO of AutoWeb. Despite Q2 revenues declining in-line with the broader automotive industry, we significantly expanded gross margin to the highest level in several years, reduced our net loss and achieved a critical milestone in turning adjusted EBITDA positive. These results validate our disciplined approach to expense management and running an efficient, flexible and sustainable business capable of profitable growth in both good times and bad. I am extremely proud of our teams hard work during this challenging time for our industry.Second Quarter 2020 Financial Summary Q2 2020Q1 2020Q2 2019 Total Revenues millions17.0 24.5 27.1 Advertising Revenues millions2.8 6.0 5.4 Gross Profit millions6.0 5.4 5.4 Gross Margin 35.5 21.9 19.8 Net IncomeLoss millions1.44.15.0 Net IncomeLoss per share0.100.310.38 Adjusted EBITDA1 millions0.4 1.72.1 Second Quarter 2020 Key Operating Metrics2 Q2 2020Q1 2020Q2 2019 Lead Traffic3 millions 18.3 27.3 33.1 Lead Volume4 millions 1.2 1.5 1.8 Retail Dealer Count5 1,854 1,822 2,510 Retail Lead Capacity6 100,000 106,000 142,000 Click Traffic7 millions 23.0 31.8 26.7 Click Volume8 millions 5.5 8.6 5.9 Net Revenue per Click90.420.630.75 ___1 Refer to the Non-GAAP financial measures discussed below. 2 Certain website properties have been added and removed from tracking metrics as AutoWeb continues to refine its website portfolio and its approach to tagging. These changes have been made to the prior periods for lead traffic, click traffic, and click volume as well for comparative purposes. 3 Lead traffic total visits to AutoWebs owned lead websites. 4 Lead volume total new and used vehicle leads invoiced to retail and wholesale customers. 5 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. 6 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. 7 Click traffic total visits to AutoWebs owned click referral websites and AutoWebs Click Traffic Affiliate Network websites. 8 Click volume the number of times during the applicable quarter that consumers clicked on advertisements on AutoWebs owned click referral websites and on AutoWebs Click Traffic Affiliate Network websites. 9 Net revenue per click total click revenue divided by click volume for owned affiliated sites.Across our business, our team has remained almost entirely intact with limited furloughs or layoffs, even during the lowest points in April. It was very important that we ensured job continuity for our team and maintained critical health benefits for the few employees that were furloughed. Since the lows in April, we have sequentially grown revenue, gross margin and adjusted EBITDA every month during the second quarter, and our overall operational and financial performance in July continued this positive trajectory. Our retail dealer suspend status has also continued to improve since our last corporate update and revenues in suspend status are now down more than 75 from mid-April, which is when it peaked.In our clicks business, volumes remain challenged like other traditional impression-based media, however our high-quality leads have become an even more valuable asset. We have historically referenced that dealers and OEMs turn to leads when there is market uncertainty given their high attribution and lower funnel targeting. In fact, we recently conducted an email survey of our users that showed more than 70 of respondents had no plans to delay their automotive purchase due to COVID-19, which indicates that AutoWebs leads are submitted by committed car buyers, not just shoppers. One of our key strategic decisions this quarter has also panned out. Instead of implementing widespread product discounts, we focused on matching our consumer marketing spend to projected industry selling rates, which better aligned with the true consumer demand in the market. By focusing on the changing market dynamics in a targeted manner, we believe we were able to better meet the true needs of our dealer and OEM customers by delivering them actionable car buyers, not discounted traffic made up of shoppers. Throughout the automotive industry, new car sales remain well below pre-COVID levels, and dealers are still contending with the broader macroeconomic impacts of the pandemic on consumer behavior. Analysts project that second quarter U.S. vehicle sales have fallen by about one-third, and high unemployment rates continue to affect consumer confidence. We cannot predict how these market forces will evolve in the coming months, but we will continue to support our dealer and OEM customers as they continue to turn to leads to support their sales recovery.The progress we have made this quarter would not be possible without our work to realign our organizational structure, reduce costs, and improve our operational focus over the past two years. Our work in this turnaround is not yet complete, however we remain optimistic and focused on continuing our momentum to improve profitability.Second Quarter 2020 Financial Results Total revenues in the second quarter of 2020 were 17.0 million compared to 27.1 million in the year-ago quarter, with advertising revenues of 2.8 million compared to 5.4 million in the year-ago quarter. The expected decline in total revenues was primarily due to continued challenges in the automotive industry in the wake of the coronavirus pandemic. The company anticipated these challenges and proactively reduced marketing spend to better align lead and click volumes with market demand.Gross profit in the second quarter increased 11 to 6.0 million compared to 5.4 million in the year-ago quarter. As a percentage of revenue, gross profit increased significantly to 35.5 compared to 19.8. The increase was driven by improved traffic acquisition and lower costs per lead, as well as continued focus on higher-margin distribution channels.Total operating expenses in the second quarter decreased 30 to 7.3 million compared to 10.4 million in the year-ago quarter, primarily driven by continued prudent cost management across the business.Net loss in the second quarter of 2020 improved significantly to 1.4 million or 0.10 per share, compared to a net loss of 5.0 million or 0.38 per share in the year-ago quarter.Adjusted EBITDA improved to 0.4 million compared to 2.1 million in the second quarter of 2019 See Note about Non-GAAP Financial Measures below for further discussion.At June 30, 2020, cash, cash equivalents and restricted cash totaled 8.5 million compared to 7.9 million at March 31, 2020.At June 30, 2020, AutoWeb had an outstanding balance of 7.2 million on its revolving credit facility with CIT Northridge Credit compared to 6.7 million at March 31, 2020.Conference Call AutoWeb will hold a conference call today at 5:00 p.m. Eastern time to discuss its second quarter results, followed by a question-and-answer session.Date: Wednesday, August 5, 2020 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: 8050647The conference call will also be broadcast live at 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 Gateway Investor Relations 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 12, 2020. The call will also be archived in the Investors section of the companys website for one year.Toll-free replay number: 1-855-859-2056 International replay number: 1-404-537-3406 Replay ID: 8050647Tax Benefit Preservation Plan At December 31, 2019, the company had approximately 100.5 million in available net operating loss carryforwards NOLs for U.S. federal income tax purposes. AutoWeb reminds stockholders about its Tax Benefit Preservation Plan dated May 26, 2010, as amended the Plan between the company and Computershare Trust Company, N.A., as rights agent.The Plan was adopted by the companys board of directors to preserve the companys 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. 