Greenbackd

Autobytel Inc (NASDAQ:ABTL) has filed its 10K for the year ended December 31, 2008.

We’ve been following ABTL (see our post archive here) because it is trading at a discount to its liquidation value. We initially estimated the company’s liquidation value at $35.3M or $0.78 per share. We’ve now adjusted our valuation down significantly to $24.3M or $0.54 per share, partially because of the deterioration in ABTL’s balance sheet and partially because our initial analysis was overly optimistic (ABTL was one of our earliest posts). This is a disappointing outcome, but with the stock trading at less than half its liquidation value and 80% of its net cash value we plan to hold on for the moment.

The value proposition updated

ABTL has consumed a great deal of cash over the last 12 months, using $20M net cash in operating activities primarily from a net operating loss and an increase in its net working capital. Its principal sources of liquidity are from proceeds from dispositions of non-core businesses and the patent litigation settlement payments. ABTL has no debt and its cash and cash equivalents totaled $27.4 million as of December 31, 2008 compared to cash and cash equivalents of $27.6 million as of December 31, 2007. Our estimate for ABTL’s liquidation value is set out below (the “Book Value” column shows the assets as they are carried in the financial statements, and the “Liquidating Value” column shows our estimate of the value of the assets in a liquidation):

We estimate ABTL’s net cash position at $15.4M or $0.34 per share and its liquidation value at $24.3M or $0.54 per share. Further cash payments are expected from the settlement with Dealix Corporation of $2.7M in March 2009 and 2010, which should bolster this position further.

Off-balance sheet arrangements and Contractual obligations

ABTL does not have any off-balance sheet arrangements. Its contractual obligations are around $3.4M in total through 2011, consisting of $1.8M in operating leases and $1.5M in purchase obligations.

A trancript of the company’s earnings conference call is available here.

Conclusion

Our position in ABTL has been a disappointing one, and has dragged down the performance of the portfolio. We propose to hold on for the time being, however, as the stock is trading at a price at which we would enter it, and so it makes no sense to exit.

[Full Disclosure:  We do not have a holding in ABTL. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.]