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FINANCIAL SUMMARY
The Company reported revenue of $550,787 for the three months ended June 30, 2009 compared to $849,859 during the same period in 2008, a decrease of $299,072 or 35%. The Company reported revenue of $1,192,134 for the six months ended June 30, 2009 compared to $1,647,747 during the same period in 2008, a decrease of $455,613 or 28%.
The Company reported an operating loss of $291,253 or $(0.05) per share for the three months ended June 30, 2009 as compared to a net loss of $457,151 or $(0.10) per share for the three months ended June 30, 2008. The Company reported an operating loss of $459,043 or $(0.08) per share for the six months ended June 30, 2009 as compared to a net loss of $651,202 or $(0.13) per share for the six months ended June 30, 2008.
FINANCIAL DETAILS - 3 MONTHS ENDED JUNE 30, 2009
Revenues. During the three months ended June 30, 2009, the Company had revenues of $550,787 compared to revenues of $849,859 during the same period in 2008, a decrease of $299,072 or 35%. The decrease in revenues is a result of a 14% decrease in revenues from the Company's liquidation business and a 77% decrease in revenues from its Live Auction services.
Revenues from the Company's liquidation services totalled $437,426 (or 79% of total revenue) compared to revenues of $510,831 (or 60% of total revenue) during the same period in 2008. The revenue from the Company's liquidation service decreased by $73,405 or 14% compared to the three months ended June 30, 2008.
Revenues from the Company's live auctions services totalled $54,794 (or 10% of total revenue) compared to revenues of $236,206 (or 28% of total revenue) during the same period in 2008. The decrease in revenues is a direct result of the termination of eBay's Live Auction platform.
The Company's liquidation services accounted for 79% of total revenue for the three month period ending June 30, 2009. The Company anticipates that revenues from its liquidation sector will continue to represent a significant percentage of overall revenues. The Company believes that the results of its liquidation business and the number of antique and collectible auctions it managed during the quarter is directly related to the general economy of the US, and that the current economic down-turn in the US could continue to have a dampening effect on its revenues from this business segment.
During the three months ended June 30, 2009, the Company had investment income of $54,797 compared to $38,701 for the same period in 2008. The investment in property development is long term in nature and, as a result, returns will be realized on completion of projects. As of June 30, 2009, the holdings in real estate, including the head office building and entities that hold real estate for development, totalled approximately $18,541,786, representing the lower of cost or market for these assets.
Cost of Revenue. Cost of revenue was $358,431 or 65% of the Company's revenues for the three months ended June 30, 2009, compared to $586,572 or 69% of its revenues during the same period in 2008.
Gross Profit. Gross profit was $192,356 or 35% of total revenue for the three months ended June 30, 2009, compared to gross profit of $263,287 or 31% of total revenue for the three months ended June 30, 2008.
Operating Expenses. During the three month period ended June 30, 2009, the Company put a number of cost cutting measures in place to withstand the decrease in revenues from its liquidation and live auction broadcast operations. Operating expenses during the three month period ended June 30, 2009 were $512,848 or approximately 93% of revenue compared to $705,860 or approximately 83% during the three month period ended June 30, 2008. Operating expenses are expected to further decrease in the third quarter of the 2009 fiscal year as we realize the effects of additional cost cutting measures.
FINANCIAL DETAILS - 6 MONTHS ENDED JUNE 30, 2009
Revenues. During the six months ended June 30, 2009, the Company had revenues of $1,192,134 compared to revenues of $1,647,747 during the same period in 2008, a decrease of $455,613 or 28%. The decrease in revenues is a result of a 47% decrease in revenues from the Company's liquidation business and an 82% decrease in revenues from its Live Auction services.
Revenues from the Company's liquidation services totalled $880,876 (or 74% of total revenue) compared to revenues of $944,076(or 57% of total revenue) during the same period in 2008. The revenue from the Company's liquidation service decrease by 4% for the six months ended June 30, 2008.
Revenues from the Company's live auctions services totalled $125,796 (or 11% of total revenue) compared to revenues of $438,186 (or 27% of total revenue) during the same period in 2008. The decrease in revenues is a direct result of the termination of eBay's Live Auction platform.
The Company's liquidation services accounted for 74% of total revenue for the six month period ending June 30, 2009. The Company anticipates that revenues from its liquidation sector will continue to represent a significant percentage of overall revenues. The Company believes that the results of its liquidation business and the number of antique and collectible auctions managed during the period is directly related to the general economy of the US, and that the current economic down-turn in the US could continue to have a dampening effect on revenues from this segment of business.
During the six months ended June 30, 2009, the Company had investment income of $135,821 compared to $73,703 for the same period in 2008.
Cost of Revenue. Cost of revenue was $765,109 or 64% of revenues for the six months ended June 30, 2009, compared to $1,001,082 or 61% of revenues during the same period in 2008.
Gross Profit. Gross profit was $427,025 or 36% of total revenue for the six months ended June 30, 2009, compared to gross profit of $646,665 or 39% of total revenue for the six months ended June 30, 2008.
Operating Expenses. During the six month period ended June 30, 2009, the Company put a number of cost cutting measures in place to withstand the decrease in revenues from its liquidation and live auction broadcast operations. Operating expenses during the six month period ended June 30, 2009 were $980,850 or approximately 82% of revenue compared to $1,213,561 or approximately 74% during the six month period ended June 30, 2008. Operating expenses are expected to further decrease in the third quarter of the 2009 fiscal year as further cost cutting measures are realized.
Although the Company has implemented strong cost control measures to reduce recurring operating expenses, if the U.S. economy does not experience a significant recovery during the 2009 fiscal year, the Company expects that its operations will continue to be adversely affected. As a result, the Company is continuing to explore all avenues to mitigate any further losses including the divestiture and possible liquidation or winding-down of certain operations. The Company will continue to restructure its operations or acquire or merge with another business. However, in the absence of a definitive transaction, the Company intends to continue focusing on its investment and property development business, which management believes to be in the best interests of the Company and its shareholders.
About Ableauctions.com
Ableauctions.com Inc. (AMEX "aac") is a high-tech liquidator and on-line auction facilitator that operates the domains iCollector.com, Naalive.com and Unlimited Closeouts.com.
As an on-line auction facilitator, the Company, with the experience of over 3,000 auctions, has developed state-of-the-art technology to broadcast auctions over the Internet (www.ableauctions.com/technology) and currently provides the technology and related services to auction houses, enabling them to broadcast auctions over the Internet. The Company broadcasts business and industrial auctions over the Internet for auctioneers and members of the National Auctioneers Association (NAA) and art, antique and collectible auctions for numerous galleries and auction houses around the world through eBay Live Auctions.
As a liquidator, the Company, through Unlimited Closeouts, purchases overstocks, order cancellations and discontinued products from major manufacturers and importers, then sells the merchandise to major retail chains, other resellers or the public.
For a comprehensive Corporate Update and prior releases, visit www.ableauctions.com. For more information, contact Investor Relations at investorrelations@ableauctions.com
This press release contains forward-looking statements, particularly as related to, among other things, the business plans of the Company, statements relating to goals, plans and projections regarding the Company's financial position, the Company's business strategy and the Company's real estate development project. The words or phrases "would be," "will allow," "intends to," "may result," "are expected to," "will continue," "anticipates," "expects," "estimate," "project," "indicate," "could," "potentially," "should," "believe," "considers" or similar expressions are intended to identify "forward-looking statements." These forward-looking statements fall within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to the safe harbor created by these sections. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. Such forward-looking statements are based on current expectations, involve known and unknown risks, a reliance on third parties for information, transactions or orders that may be cancelled, 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 staff, management, financing, competition, on-line auction business, our ability to implement or manage our expansion strategy, general economic conditions, our ability to license our software to other auction houses, our ability to acquire profitable companies and integrate them into our business successfully and other factors that are detailed in our Annual Report on Form 10-KSB and on documents we file from time-to-time with the Securities and Exchange Commission. Factors that could cause our real estate development results to differ materials from anticipated results include delay experienced during any phase of the project development (such as in obtaining permits) or unforeseen problems (such as labor disputes, increasing materials costs, or an inability to obtain adequate financing). Even if we are able to build the project, the market for the units we build could decline. We cannot guarantee you that our building projects will be successful or that we will be able to recover the money we put into them. If our building projects are unsuccessful, our business and our cash flow will be materially adversely affected. Price changes may occur in the market as a whole, or they may occur in only a particular company, industry, or sector of the market. Real estate values and mortgage loans can be seriously affected by factors such as interest rate fluctuations, bank liquidity, the availability of financing, and by factors such as a zoning change or an increase in property taxes. Since the majority of our investments are held in Canadian funds, currency fluctuations may affect the value of our portfolio significantly. There can be no assurance that the securities and other assets in which we have invested will increase, or even maintain, their value. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company cautions readers not to place undue reliance on such statements. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement. Actual results may differ materially from the Company's expectations and estimates. The Company does not realize nor book the full revenue of auctions that it facilitates in its financials, only the net auction fees, that can vary from time-to-time, that it realizes.
ABLEAUCTIONS.COM, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
JUNE 30 DECEMBER 31
2009 2008
ASSETS
Current
Cash and cash equivalents $ 303,195 $ 223,592
Accounts receivable - trade, net of allowance 517,538 545,740
Employee receivable 312,071 248,072
Mortgages and loans receivable 2,395,787 2,294,745
Inventory 522,233 666,138
Prepaid expenses 43,363 63,841
4,094,187 4,042,128
Deposits 335,376 320,558
Property and Equipment 2,352,974 2,312,187
Property Held for Development 13,148,668 8,520,055
Investment in Joint Venture 1,275,568 1,223,728
Investment in Surrey City Central 1,867,085 1,671,638
$ 23,073,858 $ 18,090,294
LIABILITIES
Current
Accounts payable and accrued liabilities $ 297,598 $ 519,043
Deferred revenue 10,331
Due to related parties 1,334,607 1,363,765
Bank loan 11,756,092 6,367,756
13,398,628 8,250,564
STOCKHOLDERS' EQUITY
Capital Stock
Authorized:
100,000,000 common shares with a par value of $0.001
Issued and outstanding:
5,754,172 common shares at June 30, 2009
5,906,957 common shares at December 31, 2008 5,754 5,907
Additional paid-in capital 37,866,057 37,903,221
Deficit (28,611,724 ) (28,152,681 )
Accumulated Other Comprehensive Income 427,800 83,283
Treasury Stock, at cost (12,657 ) -
9,675,230 9,839,730
$ 23,073,858 $ 18,090,294
ABLEAUCTIONS.COM, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
3 MONTHS ENDED 6 MONTHS ENDED
JUNE 30 JUNE 30
2009 2008 2009 2008
Net Revenues
Sales $ 550,787 $ 849,859 $ 1,192,134 $ 1,647,747
Cost Of Revenues 358,431 586,572 765,109 1,001,082
Gross Profit 192,356 263,287 427,025 646,665
Investment Income 54,797 38,701 135,821 73,703
247,153 301,988 562,846 720,368
Expenses
Operating expenses 512,848 705,860 980,850 1,213,561
Depreciation and amortization 22,183 43,701 38,591 89,059
535,031 749,561 1,019,441 1,302,620
(Loss) Income from Operations (287,878 ) (447,573 ) (456,595 ) (582,252 )
Other Items
Share of net income (loss) of joint venture (5,228 ) (8,275 ) (5,815 ) (7,563 )
Settlement of legal claim - - - (65,035 )
Gain on Sale of Asset 3,423 3,423
Foreign exchange gain (loss) (1,570 ) (1,303 ) (56 ) 3,648
(3,375 ) (9,578 ) (2,448 ) (68,950 )
Income (Loss) For The Period $ (291,253 ) $ (457,151 ) $ (459,043 ) $ (651,202 )
Basic (loss) Earnings per Share $ (0.05 ) $ (0.10 ) $ (0.08 ) $ (0.13 )
Diluted (loss) Earnings per Share $ (0.05 ) $ (0.10 ) $ (0.08 ) $ (0.13 )
Weighted Average Number Of Shares Outstanding:
Basic 5,735,247 4,944,947 5,793,636 5,011,338
Diluted 8,200,524 4,944,947 5,793,636 5,011,338
ABLEAUCTIONS.COM, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
3 MONTHS ENDED 6 MONTHS ENDED
JUNE 30 JUNE 30
2009 2008 2009 2008
(Loss) Income for the Period $ (291,253 ) $ (457,151 ) $ (459,043 ) $ (651,202 )
Other Comprehensive (Loss)
Income, net of tax
Foreign currency translation 652,271 79,679 344,517 (330,985 )
adjustments
Consolidated Comprehensive (Loss) $ 361,018 $ (377,472 ) $ (114,526 ) $ (982,187 )
Income
Basic Comprehensive (Loss) Income $ 0.06 $ (0.08 ) $ (0.02 ) $ (0.20 )
per Share
Diluted Comprehensive (Loss) Income $ 0.04 $ (0.08 ) $ (0.02 ) $ (0.20 )
per Share
ABLEAUCTIONS.COM, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
6 MONTHS ENDED JUNE 30
2009 2008
Cash Flows From Operating Activities
Income (Loss) for the period from continuing operations $ (459,043 ) $ (651,202 )
Non-cash items included in net Income:
Depreciation and amortization 38,591 89,059
Stock based compensation - 16,000
Gain on sales of asset (3,423 ) -
Joint Venture (Income) loss 5,815 7,563
Changes in operating working capital items:
(Increase) Decrease in accounts receivable 42,473 184,602
(Increase) Decrease in inventory 145,027 10,948
(Increase) Decrease in prepaid expenses 20,559 (71,201 )
(Increase) Decrease in employee receivable (63,999 ) (65,389 )
Increase (Decrease) in accounts payable and accrued liabilities (225,718 ) (300,542 )
Increase (Decrease) in deferred revenue 9,865 (7,736 )
Net cash used in (from) operating activities (489,853 ) (787,898 )
Cash Flows From Investing Activities
Purchase (sale) of property and equipment, net 2,393 (24,366 )
Purchase of property held for development (4,005,519 ) (1,369,893 )
Loan advances (100,000 ) (464,037 )
Loan repayment 107,481 -
Investment in surrey city central (195,447 ) -
Other receivables - 215,067
Deposits - (4,000 )
Net cash from (used in) Investing Activities (4,191,092 ) (1,647,229 )
Cash Flows From Financing Activities
Proceed from Bank Loan 4,858,079 1,470,625
Repayment to related parties (60,092 ) -
Purchase of Treasury Stock (49,974 ) (374,304 )
Proceeds from issuance of capital stock, net - -
Net cash from (used in) financing activities 4,748,013 1,096,321
Effect of Exchange Rates On Cash 12,535 (14,519 )
Change in Cash and Cash Equivalents For The Period 67,068 (1,338,806 )
Cash And Cash Equivalents, Beginning of Period 223,592 1,594,657
Cash And Cash Equivalents, End Of Period $ 303,195 $ 241,332
SOURCE: Ableauctions.com Inc.
Ableauctions.com Vid Wadhwani, 604-521-3369 Email: investorrelations@ableauctions.com Website: www.ableauctions.com
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