AutoWeb, Inc.

good afternoon everyone and thank you for participating in today's conference call to discuss autoweb financial results for the first quarter ended march 31 2022. joining us today are the autoweb's president and ceo jared roe the company cfo carlton hamer and the company's outside investor relations advisor cody cree with gateway group following their remarks we'll open the call for questions I'll now like to turn the call over to Mr. Cree for some introductory comments.

Thank you, Sadie. 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 and 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 period ended March 31, 2022, as well as other filings made by AutoWeb 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. The reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure, 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 as posted on the company's website. And with that, I will now turn the call over to Jared. Jared, the floor is yours.

Thank you, Cody. Good afternoon, everyone. Before addressing the going concern and review of strategic alternatives that was announced today, I want to provide context to the overall macro environment and high level overview of the quarter. The automotive market has continued to face severe headwinds. We're seeing industry-wide low consumer sentiment, rising interest rates, high inflation, and overall just an uncertain economy that saw U.S. GDP contract by 1.4% in the first quarter. In past calls, I have mentioned several key metrics that gauge the automotive industry's performance, one of them being the seasonally adjusted annualized rate of new car, new vehicle sales, or SAR as it's called in the industry. These numbers are tracked by several sources. We tend to focus on the one that's tracked by the Federal Reserve. While we saw a slight recovery in January SAR, it quickly retracted back to The low levels that we'd seen since Q3 of last year during February and March. So again, while we got a little bit of a bump in January SAR, February SAR and March SAR returned to what were fairly low levels for an industry. While consumers are still in the market searching for vehicles, it is taking them twice as long to make a purchase decision. compared to pre-pandemic conditions as a result of low available inventory for new vehicles, higher used vehicle prices, and an increase in interest rates. With prices continuing to rise, as we all know, inflation hit a 40-year high in January, according to data gathered by the Bureau of Labor Statistics. And looking at data tracked by the University of Michigan, we've seen overall buying conditions for vehicles having reached a 50-year low.