AutoWeb, Inc.

Good morning, and thank you for participating in today's conference call to discuss AutoWeb's financial results for the second quarter ended June 30, 2021. Joining us today are AutoWeb's President and CEO, Jared Rowe, the company's CFO, Michael Sadowski, and the company's Outside Investor Relations Advisor, Cody Cree, with Gateway Investor Relations. Following their remarks, we will open the call for your questions. And now, I would like to turn the call over to Mr. Cree for some introductory comments.

Thank you, Maria. Before I introduce Jared, I remind you that during today's call, including the question and answer session, statements that are not historical facts, including any projections, statements regarding future events or future financial performance, or statements of intent or belief, are forward-looking statements and are covered by the safe harbor disclaimers CONTAINED IN TODAY'S PRESS RELEASE IN THE COMPANY'S PUBLIC FILINGS WITH THE SEC. ACTUAL OUTCOMES AND RESULTS MAY DIFFER MATERIALLY FROM WHAT IS EXPRESSED IN OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. SPECIFICALLY, PLEASE REFER TO THE COMPANY'S FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2021, WHICH WAS FILED PRIOR TO THIS CALL, AS WELL AS OTHER FILINGS MADE BY AUTO WEB WITH THE SEC FROM TIME TO TIME. THESE FILINGS IDENTIFY FACTORS THAT COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE FORWARD-LOOKING STATEMENTS. Please also note that during this call, management will be disclosing adjusted EBITDA. This is a non-GAAP financial measure as defined by SEC Regulation G. A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure in a statement disclosing the reasons why company management believes that adjusted EBITDA provides useful information to investors regarding the company's financial condition and results of operations are included in today's press release that is posted on the company's website. And with that, I will now turn the call over to Jared. Jared, the floor is yours.

Thanks, Cody, and hello, everybody. You know, we continue to execute on our transformation strategy during the second quarter. We generated sustained improvements across some of our key financial metrics. Building off the momentum we generated during Q1, we delivered sequential and year-over-year growth across revenue and gross profits. and year-over-year improvement in net loss and adjusted EBITDA, with Q2 being our fifth sequential quarter of generating positive adjusted EBITDA. On an operational level, we continue to make improvements. We re-platformed two of our key sites, and we did complete the acquisition of specified assets of Karzu subsequent to the quarter. I am proud of the progress that we've made through the first half of 2021. made possible by our team's thorough commitment to efficient execution and product innovation. Even as consumer demand has recovered from COVID-19-related lows last year, persistent supply challenges have curtailed the automotive industry's return to growth. The ongoing worldwide semiconductor and microchip shortage has forced many automakers to restrict production levels, causing prices for both new and used vehicles to rise. This industry-wide inventory pressure has begun to weigh on overall car sales volumes, which did contract in May and June as a result of the supply shortages and drove prices up. Now, by the beginning of July, new vehicle inventories reached historic lows and prices reached record highs. Cox Automotive reported that only 1.3 million cars were left unsold nationwide. And they were at an average listing price of just over $41,000. Now, this is all of June 21, 2021. So, again, as you can see, we've been in an interesting time from a supply and demand perspective in the auto industry, really unprecedented. As we previewed last quarter, these broader factors have impacted our customer base and hampered some of our Q2 growth prospects. And, again, We expect these headwinds to persist throughout the second half of the year. The industry-related impacts were most directly reflected in our dealer count and in our lead performance. At the end of May, we reported that Ford Direct, one of our largest customers, had decided to suspend its vehicle leads marketing program overall and terminate the new vehicle leads portion of its agreement with us with an early termination effective June 30th. As I just mentioned, though, this was something that was a bit of a strategic change for Ford in terms of how they want to manage their marketing spend. We do anticipate transitioning some of Ford Direct's retail franchise dealers into our retail program as inventory levels recover. But we do, and again, like we said in past periods, we do continue to expect our quarter-to-quarter dealer count to remain choppy for the time being. Now, as we discussed during our last call, we're very focused on the next phase of AutoWeb's evolution, which is investing in product progression to fuel our growth. To that end, we re-platformed two additional sites. We formed a strategic relationship with a digital retailing platform, Credit IQ, and we acquired specified assets of a direct-from-consumer used vehicle acquisition platform, CarSeus, which we are very excited about. I'd like to emphasize that our overall progress has both advanced our growth strategy and enhanced the overall stability of our business amid ongoing industry headwinds. You know, in a buying environment that remains challenged by macroeconomic factors beyond dealers or consumers' control, expanding the optionality of our platform and the precision of our matches helps us optimize the factors that are within our control to encourage completed vehicle sales. When dealers have limited inventory on hand, their resources are best served by having more robust leads from the consumers who are actively browsing their available inventory. Meanwhile, buyers are best served by knowing if and where the vehicles they have in mind are available. We're improving our offerings to meet these two needs more fully, creating a comprehensive platform that encourages completed transactions, regardless of what the broader buying environment looks like. I'll talk more about this after Mike runs through the Q2 financial results, but as of now, I'm going to turn it over to Mike.