TACOMA, Wash., Nov. 14, 2002 (PRIMEZONE) -- Ableauctions.com Inc. (AMEX:AAC) (the "Company") today announced the results of operations for the third quarter ended September 30, 2002.
For the third quarter, the Company reported net auction revenue of $398,814, a 7.5% improvement over the $371,049 in net auction revenue for the corresponding period in the prior year. Gross profit margin for the quarter was 84.6%, up from 41.9% in the third quarter of 2001. The Company reported a net loss after charges of $457,321, which represents a 35% improvement over the net loss of $705,950 for the corresponding period in the prior year.
In the quarter ending September 30, 2002, the Company took a charge of $217,628 relating to adjustments in book value of the Arizona building that it sold and the operations that it closed. The Company also took a one-time charge of $234,696 relating to its acquisition of iCollector and the settlement of $3,000,000 of debt into shares of common stock of the Company at $1.43 per share.
The Company realized a gain of $300,853 from the licensing of its British Columbia operations. The Company's subsidiary, Able Auction (1991) Ltd., entered into an agreement with Able Solutions Inc. to sub-license the name "Able Auctions" for the purpose of conducting live auctions in British Columbia, Canada only.
Under the terms of the agreement, the subsidiary sub-licensed the name in consideration of:
(a) Able Solutions assuming debt of $518,777; (b) Able Solutions paying an additional $192,162 in cash over 3 years; (c) Able Solutions assuming all leases, obligations, salaries, employment contracts and material contracts of the subsidiary; (d) The subsidiary transferring receivables totaling $85,642 and inventory and leasehold improvements totaling $245,656
Abdul Ladha, President and CEO at Ableauctions.com Inc. stated: "Our results for the third quarter reflect management's ongoing efforts to reduce costs and achieve profitability. We have implemented strong controls throughout the organization with a goal of profitability by year-end. The conversion of some of the Company's debt into common stock, the sale of the Company's building in Arizona, and the licensing agreement with Able Solutions have substantially reduced the Company's overall liabilities from $5,932,099 last quarter to $990,934. We feel that we now have the right platform in place in order to build the Company for the future."
Despite the traditionally slow summer months and the limited impact of the Company's cost cutting measures on this quarter, the Company's technology arm and its subsidiary, iCollector International, ran profitably. The Company's "bricks and mortar" operations and automotive auctions were most heavily affected by the sluggish economy but are now showing signs of re-growth. The elimination of a substantial portion of the Company's debt, curbing of overhead and licensing of certain non-performing operations have now all but eliminated the drag on the Company's business. Since September 2002, the Company has increased its focus on specialty auctions and liquidations, acquiring larger inventories at better margins. Some of these "specialty auctions" include 42,000 pieces of fine, name-brand crystal and china and some inventory from an abandoned tower in New York City. The Company believes this strategy will play a pivotal role in its growth.
Mr. Ladha added: "With the continued fallout from a very challenging business environment in both North America and Europe there is a tremendous opportunity for the Company to capitalize on distressed situations in the marketplace. We believe that we have the knowledge, expertise and flexibility to be able to act swiftly, giving us an advantage over our competition and also allowing us to attract individual investors to participate in large-scale projects."
In order to finance operations, provide working capital and purchase inventory, the Company has secured a line of credit for up to $1 million from a member of the Board of Directors, secured with the Company's assets.
The Company's common stock has recently traded at all time lows. Management believes that if it can successfully implement its business plan, build strong cash reserves and eliminate all debt, the depressed value of its shares represents a worthy investment for its excess cash. The Board of Directors has authorized the Company to repurchase stock in the open market from time to time, as it sees fit.
A full comprehensive Corporate Update on the Company is available at www.ableauctions.com
About Ableauctions.com
Ableauctions.com is a high-tech business-to-business and consumer auctioneer that conducts auctions live and simultaneously broadcasts them over the Internet. The Company liquidates a broad range of products including computers, electronics, office equipment, furniture and industrial equipment that are acquired through bankruptcies, insolvencies and defaults. For a comprehensive Corporate Update and prior releases, visit www.ableauctions.com. For more information contact Investor Relations at 858-847-9667 or investorrelations@ableauctions.com.
About iCollector.com
iCollector.com is the independent connection to the world's auction houses. Founded in 1994, it was the first company dedicated to trading antiques, fine art and premium collectibles on the Internet. Today iCollector.com represents some of the world's leading auction houses. Hundreds of thousands of collectors use icollector.com to search its global client base of auction houses and place bids, with the support of its extensive catalog archive. Since January 2001, its alliance with eBay Live Auctions has resulted in hundreds of Live Auctions being broadcast in real-time, direct to the saleroom as the auction happens, selling tens of thousands of lots to many thousands of users online. With its unparalleled understanding and expertise in this sector, iCollector can help you to maximize your opportunities to find, buy or sell art, antiques and collectibles online.
This press release contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or developments in our industry, to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties related to the performance of our auction houses, our ability to implement our inventory procurement strategy, general economic conditions, our ability to license our software to other auction houses, and other factors that are detailed in our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may differ materially from the Company's expectations and estimates.