DealerTrack Holdings Reports 1Q 2009 Financial Results

DealerTrack Holdings, Inc. hasreported financial results for the first quarter ended March 31.

In a release on May 7, the company noted:

GAAP Results for the First Quarter 2009

- Revenue for the quarter was $55.7 million, as compared to $64.3 million for the first quarter of 2008.

- GAAP net loss for the quarter was $(5.6) million, as compared to GAAP net income of $2.3 million for the first quarter of 2008.

- GAAP diluted net loss per share for the quarter was $(0.14), as compared to GAAP diluted net income of $0.05 per share for the first quarter of 2008.

Non-GAAP Results for the First Quarter 2009

- Adjusted EBITDA for the quarter was $6.1 million, as compared to $13.8 million for the first quarter of 2008.

- Cash net income for the quarter was $1.8 million, as compared to $9.3 million for the first quarter of 2008.

- Diluted cash net income per share for the quarter was $0.04, as compared to $0.21 per share for the first quarter of 2008.

Guidance for 2009 annual performance

DealerTrack has lowered revenue guidance, reduced GAAP net loss guidance and reaffirmed non-GAAP earnings guidance for the full year 2009 as follows:

Expected GAAP Results

- Revenue for the year is expected to be between $232 million and $238 million, compared to the previous estimate of $242 million to $250 million.

- GAAP net loss for the year is expected to be between $(7.0) million and $(5.5) million, compared to the previous estimate of $(11.1) million to $(9.6) million.

- GAAP net loss per share for the year is expected to be between $(0.18) and $(0.14), compared to the previous estimate of $(0.28) to $(0.24).

Expected Non-GAAP Results

- Adjusted EBITDA for the year is expected to be between $31.0 million and $33.0 million.

- Cash net income for the year is expected to be between $16.7 million and $18.2 million.

- Diluted cash net income per share for the year is expected to be between $0.40 and $0.44.

GAAP net loss guidance was reduced primarily due to a change in estimated full year amortization of acquired identifiable intangibles from $25.4 million to $20.3 million resulting from the actual valuation of assets acquired from JM Dealer Services, Inc. on January 23.

Cash net income per share guidance for the year is based on an assumed 41.3 million diluted weighted average shares outstanding. GAAP net loss guidance for the year is based on 40.0 million basic weighted average shares outstanding.

The guidance assumes an approximately 15 percent to 20 percent decline in lender to dealer relationships from January 1, through the end of 2009. Actual lender to dealer relationships declined 14 percent in the first quarter of 2009. It also assumes U.S. new car sales for 2009 of approximately 9.5 to 10.5 million units, compared to an approximately 9.4 million run rate in the first quarter of 2009. Additionally, it assumes used car sales from U.S. franchised dealers of approximately 12.0-13.0 million units for 2009, compared to 2008 total sales of approximately 13.2 million units. DealerTrack's guidance does not reflect the impact of accelerated dealer closures resulting from Chrysler's bankruptcy filing or GM's restructuring plans because, at the time of this press release, definitive information is not fully available. The company expects to have more clarity around the impact of GM and Chrysler's dealer closures by its second quarter earnings call.

Mark F. O'Neil, chairman and chief executive officer of DealerTrack, commented, "The first quarter of 2009 proved to be a challenging macro-economic environment in terms of auto sales and credit availability. We did not see this downturn until the second half of last year, so the first quarter of 2009 is difficult to compare to the first quarter of 2008." O'Neil continued, "That said, we continue to make targeted investments in the business. We are pleased with the acquisition of AAX, which has made us a clear leader in the strategic inventory management space. We expect our DMS business to continue to grow and have experienced success with our solutions selling model. While we have decreased revenue guidance, we have reaffirmed our non-GAAP earnings guidance because of the growth in the subscription business and the cost containment measures we have put into place."

DealerTrack Holdings, Inc. is a provider of on-demand software and data solutions for the U.S. automotive industry.

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