Attached files
| file | filename |
|---|---|
| 8-K - Dealertrack Technologies, Inc | v211754_8k.htm |
Exhibit 99.1
CONTACT:
Elizabeth
Besen
Director
of Investor Relations
(516)
734-3859
investorrelations@dealertrack.com
DEALERTRACK
HOLDINGS REPORTS RESULTS FOR FOURTH
QUARTER
AND 2010 AND ISSUES GUIDANCE FOR 2011
Lake Success, N.Y., February 16, 2011
– DealerTrack Holdings, Inc. (Nasdaq: TRAK) today reported financial
results for the fourth quarter and year ended December 31, 2010.
GAAP
Results for the Fourth Quarter 2010
|
§
|
Revenue
for the quarter was $62.0 million, as compared to $53.2 million for the
fourth quarter of 2009.
|
|
§
|
GAAP
net loss for the quarter was $(26.4) million, as compared to GAAP net loss
of $(0.7) million for the fourth quarter of 2009. GAAP net loss
for the fourth quarter of 2010 was negatively impacted by a non-cash $28.4
million valuation allowance on the company’s net U.S. deferred tax
assets.
|
|
§
|
GAAP
net loss per share for the quarter was $(0.65), as compared to GAAP net
loss per share of $(0.02) for the fourth quarter of 2009. GAAP net loss
per share for the fourth quarter of 2010 was negatively impacted by $0.70
per share (non-cash) for a valuation allowance on the company’s net U.S.
deferred tax assets.
|
Non-GAAP
Results for the Fourth Quarter 2010
|
§
|
Adjusted
EBITDA for the quarter was $14.5 million, as compared to $8.2 million for
the fourth quarter of 2009.
|
|
§
|
Adjusted
net income for the quarter was $7.8 million, as compared to $4.8 million
for the fourth quarter of 2009.
|
|
§
|
Diluted
adjusted net income per share was $0.19 for the quarter, as compared to
$0.12 for the fourth quarter of
2009.
|
GAAP
Results for the Year Ended December 31, 2010
|
§
|
Revenue
for the year was $243.8 million, as compared to $225.6 million for
2009.
|
|
§
|
GAAP
net loss for the year was $(27.8) million, as compared to GAAP net loss of
$(4.3) million for 2009. GAAP net loss for 2010 was negatively
impacted by a non-cash $28.4 million valuation allowance on the company’s
net U.S. deferred tax assets.
|
|
§
|
GAAP
net loss per share for the year was $(0.69), as compared to GAAP net loss
per share of $(0.11) for 2009. GAAP net loss per share for 2010
was negatively impacted by $0.70 per share (non-cash) for a valuation
allowance on the company’s net U.S. deferred tax
assets.
|
Non-GAAP
Results for the Year Ended December 31, 2010
|
§
|
Adjusted
EBITDA for the year was $42.1 million, as compared to $34.4 million for
2009.
|
|
§
|
Adjusted
net income for the year was $21.9 million, as compared to $20.0 million
for 2009.
|
|
§
|
Diluted
adjusted net income per share for the year was $0.53, as compared to $0.49
for 2009.
|
Guidance
for 2011 Annual Performance
DealerTrack’s
revenue and GAAP and non-GAAP earnings guidance for the full year 2011 is as
follows:
Expected
GAAP Results
|
§
|
Revenue
for the year is expected to be between $316.0 million and $324.0 million,
net of approximately $3.7 million of
contra-revenue.
|
|
§
|
GAAP
net income for the year is expected to be between $2.9 million and $5.4
million.
|
|
§
|
Diluted
GAAP net income per share for the year is expected to be between $0.07 and
$0.13.
|
Expected
Non-GAAP Results
|
§
|
Adjusted
EBITDA for the year is expected to be between $57.0 million and
$61.0 million.
|
|
§
|
Adjusted
net income for the year is expected to be between $29.2 million and $31.7
million.
|
|
§
|
Diluted
adjusted net income per share for the year is expected to be between $0.68
and $0.74.
|
GAAP net
income and adjusted net income per share guidance for the year are based on an
assumed 42.8 million diluted weighted average shares
outstanding. The guidance assumes that for 2011 new car sales
will be approximately 12.8 million units and used car sales will be
approximately 13.0 million units. The guidance also includes the
impact of DealerTrack’s recent acquisition of triVIN Holdings, Inc. which closed
at the end of January.
Mark
O’Neil, chairman and chief executive officer of DealerTrack, commented, “We are
very pleased with our non-GAAP results for the fourth quarter as our businesses
benefited from an improving operating environment.” O’Neil continued,
“We are continuing to see the benefits of our investments as we generated an
adjusted EBITDA margin in excess of 20 percent for the second consecutive
quarter.”
Conference
Call
DealerTrack
will host a conference call to discuss its fourth quarter and full year 2010
results and other matters on February 16, 2011 at 5:00 p.m. Eastern
Time. The conference call will be webcast live on the Internet at
http://ir.dealertrack.com/eventdetail.cfm?eventid=91881.
In addition, a live audio of the call will be accessible to the public by
calling 877-303-6648 (domestic) or 970-315-0443 (international); no access code
is necessary. Callers should dial in approximately 10 minutes before the call
begins. A replay will be available on the DealerTrack website until March 9,
2011.
Non-GAAP
Financial Measures
The
non-GAAP measures of adjusted EBITDA and adjusted net income disclosures are not
presented in accordance with generally accepted accounting principles (GAAP) and
are not intended to be used in lieu of GAAP presentations of net income.
Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income
(loss) excluding interest, taxes, depreciation and amortization expenses,
contra-revenue and may exclude certain items such as: impairment
charges, restructuring charges, acquisition-related earn-out compensation
expense and professional service fees, realized gains or (losses) on securities
and certain other non-recurring items. Adjusted net income is a
non-GAAP financial measure that represents GAAP net income (loss) excluding
stock-based compensation expense, the amortization of acquired identifiable
intangibles, contra-revenueand may also exclude certain items, such as:
impairment charges, restructuring charges, acquisition-related earn-out
compensation expense and professional service fees, realized gains or (losses)
on securities and certain other non-recurring items. These
adjustments to net income, which are shown before taxes, are adjusted for their
tax impact.
Page
2
Adjusted
EBITDA and adjusted net income are presented because management believes they
provide additional information with respect to the performance of our
fundamental business activities as the purchase accounting treatment of
acquisitions can have a negative impact on our GAAP results because the
depreciation and amortization expenses associated with acquired assets, as well
as particular intangibles (which tend to have a relatively short useful life),
can be substantial in the first several years following an acquisition. As a
result, we monitor our adjusted EBITDA and adjusted net income and other
business statistics as a measure of operating performance in addition to net
income and the other measures included in our consolidated financial statements.
Management believes the adjusted EBITDA and adjusted net income information is
useful to investors for these reasons. Adjusted EBITDA and adjusted net income
are non-GAAP financial measures and should not be viewed as an alternative to
GAAP measures of performance. Management believes the most directly comparable
GAAP financial measure for adjusted EBITDA and adjusted net income is GAAP net
income and has provided a reconciliation of adjusted EBITDA to GAAP net income
and adjusted net income to GAAP net income, in Attachment 4 to this press
release.
About
DealerTrack (www.dealertrack.com)
DealerTrack's
intuitive and high-value software solutions enhance efficiency and profitability
for all major segments of the automotive retail industry, including dealers,
lenders, OEMs, agents and aftermarket providers. Our solution set for dealers is
the industry's most comprehensive. DealerTrack operates the industry's largest
online credit application network in the United States, connecting approximately
17,000 dealers with over 950 lenders. Our Dealer Management System (DMS)
provides dealers with easy-to-use tools and real-time data access that will
streamline any automotive business. Dealers using DealerTrack AAX get the
inventory management tools and services needed to accelerate turns and increase
profit. Our Sales/Finance and Insurance solution enables dealers to streamline
the entire sales process while structuring all types of deals from a single
integrated platform. DealerTrack's Compliance solution helps dealers meet legal
and regulatory requirements and protect their assets. DealerTrack's family of
companies also includes data and consulting services providers ALG and Chrome
Systems. For more information, visit www.dealertrack.com.
Safe
Harbor for Forward-Looking and Cautionary Statements
Statements
in this press release regarding DealerTrack’s expected 2011 performance, the
long-term outlook for its business, and all other statements in this release
other than the recitation of historical facts are forward-looking statements (as
defined in the Private Securities Litigation Reform Act of
1995). These statements involve a number of risks, uncertainties and
other factors that could cause actual results, performance or achievements of
DealerTrack to be materially different from any future results, performance or
achievements expressed or implied by these forward-looking
statements.
Page
3
Factors
that might cause such a difference include: economic trends that affect the
automotive retail industry or the indirect automotive financing industry
including the number of new and used cars sold; reductions in auto dealerships;
increased competitive pressure from other industry participants, including Open
Dealer Exchange, RouteOne, CUDL, Finance Express and AppOne; the impact of some
vendors of software products for automotive dealers making it more difficult for
DealerTrack’s customers to use DealerTrack’s solutions and services; security
breaches, interruptions, failures and/or other errors involving DealerTrack’s
systems or networks; the failure or inability to execute any element of
DealerTrack’s business strategy, including selling additional products and
services to existing and new customers; DealerTrack’s success in implementing an
ERP system; the volatility of DealerTrack’s stock price; new regulations or
changes to existing regulations; the integration of recent acquisitions and the
expected benefits, as well as the integration and expected benefits of any
future acquisitions that DealerTrack may pursue; DealerTrack’s success in
expanding its customer base and product and service offerings, the impact of
recent economic trends, and difficulties and increased costs associated with
raising additional capital; the impairment of intangible assets, such as
trademarks and goodwill; and other risks listed in DealerTrack’s reports filed
with the Securities and Exchange Commission (SEC), including its most recent
Annual Report on Form 10-K. These filings can be found on DealerTrack’s website
at www.dealertrack.com and the SEC’s website at www.sec.gov. Forward-looking
statements included herein speak only as of the date hereof and DealerTrack
disclaims any obligation to revise or update such statements to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events or circumstances.
Page
4
Attachment
(1) Actual Results
Three-Month
Period
DEALERTRACK
HOLDINGS, INC.
Consolidated
Statements of Operations
(Dollars
in thousands, except per share data)
(Unaudited)
|
Three Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Net
revenue
|
$ | 62,006 | $ | 53,247 | ||||
|
Cost
of revenue
|
30,404 | 27,237 | ||||||
|
Product
development
|
3,095 | 2,957 | ||||||
|
Selling,
general and administrative
|
25,368 | 25,638 | ||||||
|
Total
operating expenses
|
58,867 | 55,832 | ||||||
|
Income
(loss) from operations
|
3,139 | (2,585 | ) | |||||
|
Interest
and other income, net
|
211 | 867 | ||||||
|
Income
(loss) before (provision for) benefit from income taxes
|
3,350 | (1,718 | ) | |||||
|
(Provision
for) benefit from income taxes
|
(29,797 | ) | 1,037 | |||||
|
Net
loss
|
$ | (26,447 | ) | $ | (681 | ) | ||
|
Basic
net loss per share
|
$ | (0.65 | ) | $ | (0.02 | ) | ||
|
Diluted
net loss per share
|
$ | (0.65 | ) | $ | (0.02 | ) | ||
|
Weighted
average shares outstanding (basic)
|
40,595,939 | 39,787,985 | ||||||
|
Weighted
average shares outstanding (diluted)
|
40,595,939 | 39,787,985 | ||||||
|
Adjusted
EBITDA (non-GAAP) (a)
|
$ | 14,463 | $ | 8,177 | ||||
|
Adjusted
EBITDA margin (non-GAAP) (b)
|
23 | % | 15 | % | ||||
|
Adjusted
net income (non-GAAP) (a)
|
$ | 7,787 | $ | 4,820 | ||||
|
Diluted
adjusted net income per share (non-GAAP) (c)(d)
|
$ | 0.19 | $ | 0.12 | ||||
|
Stock-based
compensation expense was classified as follows:
|
||||||||
|
Cost
of revenue
|
$ | 361 | $ | 525 | ||||
|
Product
development
|
$ | 143 | $ | 153 | ||||
|
Selling,
general and administrative
|
$ | 2,050 | $ | 2,322 | ||||
(a) See
Reconciliation Data in Attachment 4.
(b)
Represents adjusted EBITDA as a percentage of net revenue.
(c) For
the three months ended December 31, 2010, the adjusted net income per share of
approximately $0.19 is based on 41,774,695 diluted weighted average shares
outstanding.
(d) For
the three months ended December 31, 2009, the adjusted net income per share of
approximately $0.12 is based on 40,898,826 diluted weighted average shares
outstanding.
Page
5
Attachment
(1) Actual Results
Twelve-Month
Period
DEALERTRACK
HOLDINGS, INC.
Consolidated
Statements of Operations
(Dollars
in thousands, except per share data)
(Unaudited)
|
Twelve Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Net
revenue
|
$ | 243,826 | $ | 225,626 | ||||
|
Cost
of revenue
|
124,070 | 113,875 | ||||||
|
Product
development
|
13,386 | 13,994 | ||||||
|
Selling,
general and administrative
|
105,715 | 108,707 | ||||||
|
Total
operating expenses
|
243,171 | 236,576 | ||||||
|
Income
(loss) from operations
|
655 | (10,950 | ) | |||||
|
Interest
and other income, net
|
1,527 | 1,704 | ||||||
|
Realized
gain on securities
|
582 | 1,393 | ||||||
|
Income
(loss) before (provision for) benefit from income taxes
|
2,764 | (7,853 | ) | |||||
|
(Provision
for) benefit from income taxes
|
(30,597 | ) | 3,519 | |||||
|
Net
loss
|
$ | (27,833 | ) | $ | (4,334 | ) | ||
|
Basic
net loss per share
|
$ | (0.69 | ) | $ | (0.11 | ) | ||
|
Diluted
net loss per share
|
$ | (0.69 | ) | $ | (0.11 | ) | ||
|
Weighted
average shares outstanding (basic)
|
40,322,939 | 39,524,544 | ||||||
|
Weighted
average shares outstanding (diluted)
|
40,322,939 | 39,524,544 | ||||||
|
Adjusted
EBITDA (non-GAAP) (a)
|
$ | 42,070 | $ | 34,438 | ||||
|
Adjusted
EBITDA margin (non-GAAP) (b)
|
17 | % | 15 | % | ||||
|
Adjusted
net income (non-GAAP) (a)
|
$ | 21,943 | $ | 19,967 | ||||
|
Diluted
adjusted net income per share (non-GAAP) (c)
(d)
|
$ | 0.53 | $ | 0.49 | ||||
|
Stock-based
compensation expense was classified as follows:
|
||||||||
|
Cost
of revenue
|
$ | 1,640 | $ | 2,354 | ||||
|
Product
development
|
$ | 614 | $ | 755 | ||||
|
Selling,
general and administrative (e)
|
$ | 8,979 | $ | 13,880 | ||||
(a)
See Reconciliation Data in Attachment 4.
(b)
Represents adjusted EBITDA as a percentage of net revenue.
(c) For
the twelve months ended December 31, 2010, the adjusted net income per share of
approximately $0.53 is based on 41,299,993 diluted weighted average shares
outstanding.
(d) For
the twelve months ended December 31, 2009, the adjusted net income per share of
approximately $0.49 is based on 40,509,324 diluted weighted average shares
outstanding.
(e) Included
in stock-based compensation expense for the year ended December 31, 2009 was
$3.9 million of stock-based compensation expense related to the realignment of
our workforce and business on January 5, 2009, which was primarily allocated to
selling, general and administrative expenses.
Page
6
Attachment
(2) Condensed Consolidated Balance Sheets
DEALERTRACK
HOLDINGS, INC.
Condensed
Consolidated Balance Sheets
(Dollars
in thousands)
(Unaudited)
|
December 31,
2010
|
December 31,
2009
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ | 192,563 | $ | 197,509 | ||||
|
Short-term
investments
|
490 | 1,484 | ||||||
|
Accounts
receivable, net
|
24,273 | 17,478 | ||||||
|
Prepaid
expenses and other current assets
|
17,929 | 9,620 | ||||||
|
Total
current assets
|
235,255 | 226,091 | ||||||
|
Property
and equipment, net
|
18,875 | 13,514 | ||||||
|
Software
and website development costs, net
|
29,875 | 21,158 | ||||||
|
Intangible
assets, net
|
23,163 | 41,604 | ||||||
|
Goodwill
|
136,408 | 134,747 | ||||||
|
Deferred
taxes and other long-term assets
|
15,387 | 35,213 | ||||||
|
Total
assets
|
$ | 458,963 | $ | 472,327 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 28,575 | $ | 26,960 | ||||
|
Deferred
revenue
|
5,010 | 4,992 | ||||||
|
Due
to acquirees and other current liabilities
|
728 | 2,245 | ||||||
|
Total
current liabilities
|
34,313 | 34,197 | ||||||
|
Long-term
liabilities
|
15,733 | 17,244 | ||||||
|
Total
liabilities
|
50,046 | 51,441 | ||||||
|
Total
stockholders' equity
|
408,917 | 420,886 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 458,963 | $ | 472,327 | ||||
Page
7
Attachment
(3) Consolidated Statements of Cash Flows
DEALERTRACK
HOLDINGS, INC.
Consolidated
Statements of Cash Flows
(Dollars
in thousands)
(Unaudited)
|
Twelve Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Operating
activities:
|
||||||||
|
Net loss
|
$ | (27,833 | ) | $ | (4,334 | ) | ||
|
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
|
Depreciation
and amortization
|
36,753 | 35,060 | ||||||
|
Deferred
tax provision (benefit)
|
29,174 | (7,262 | ) | |||||
|
Stock-based
compensation expense
|
11,233 | 16,989 | ||||||
|
Provision
for doubtful accounts and sales credits
|
5,488 | 7,698 | ||||||
|
Loss
(gain) on sale of property and equipment
|
23 | (184 | ) | |||||
|
Reversal
of pre-acquisition accrued contingency
|
- | (609 | ) | |||||
|
Amortization
of bond premium
|
- | 55 | ||||||
|
Amortization
of deferred interest
|
68 | 152 | ||||||
|
Deferred
compensation
|
- | 300 | ||||||
|
Stock-based
compensation windfall tax benefit
|
(1,714 | ) | (673 | ) | ||||
|
Realized
gain on securities
|
(582 | ) | (1,393 | ) | ||||
|
Changes
in operating assets and liabilities, net of effects of
acquisitions:
|
||||||||
|
Accounts
receivable
|
(12,059 | ) | (6,342 | ) | ||||
|
Prepaid
expenses and other current assets
|
(9,627 | ) | 3,725 | |||||
|
Accounts
payable and accrued expenses
|
(1,403 | ) | 3,025 | |||||
|
Deferred
revenue and other current liabilities
|
7 | 14 | ||||||
|
Other
long-term liabilities
|
(1 | ) | (642 | ) | ||||
|
Deferred
rent
|
195 | 145 | ||||||
|
Other
long-term assets
|
(10,574 | ) | (257 | ) | ||||
|
Net
cash provided by operating activities
|
19,148 | 45,467 | ||||||
|
Investing
activities:
|
||||||||
|
Capital
expenditures
|
(10,801 | ) | (5,360 | ) | ||||
|
Restricted
cash
|
- | 142 | ||||||
|
Sale
of investments
|
2,519 | 44,569 | ||||||
|
Capitalized
software and website development costs
|
(16,899 | ) | (13,021 | ) | ||||
|
Proceeds
from sale of property and equipment
|
1 | 109 | ||||||
|
Payment
for acquisition of business and intangible assets, net of acquired
cash
|
(3,028 | ) | (34,722 | ) | ||||
|
Net
cash used in investing activities
|
(28,208 | ) | (8,283 | ) | ||||
Page
8
Attachment
(3) Consolidated Statements of Cash Flows (cont'd)
DEALERTRACK
HOLDINGS, INC.
Consolidated
Statements of Cash Flows
(Dollars
in thousands)
(Unaudited)
|
|
2010
|
2009
|
||||||
| Financing activities: | ||||||||
|
Principal
payments on capital lease obligations
|
(513 | ) | (414 | ) | ||||
|
Proceeds
from the exercise of employee stock options
|
2,270 | 2,202 | ||||||
|
Proceeds
from employee stock purchase plan
|
697 | 875 | ||||||
|
Purchase
of treasury stock
|
(643 | ) | (379 | ) | ||||
|
Principal
payments on notes payable
|
- | (848 | ) | |||||
|
Stock-based
compensation windfall tax benefit
|
1,714 | 673 | ||||||
|
Net
cash provided by financing activities
|
3,525 | 2,109 | ||||||
|
Net
(decrease) increase in cash and cash equivalents
|
(5,535 | ) | 39,293 | |||||
|
Effect
of exchange rate changes on cash and cash equivalents
|
589 | 2,760 | ||||||
|
Cash
and cash equivalents, beginning of period
|
197,509 | 155,456 | ||||||
|
Cash
and cash equivalents, end of period
|
$ | 192,563 | $ | 197,509 | ||||
|
Twelve Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Supplemental
disclosure:
|
||||||||
|
Cash
paid for:
|
||||||||
|
Income
taxes
|
$ | 6,776 | $ | 4,961 | ||||
|
Interest
|
$ | 57 | $ | 60 | ||||
Page
9
Attachment
(4) Reconciliation Data
DEALERTRACK
HOLDINGS, INC.
Reconciliation
of GAAP Net Loss to Non-GAAP Adjusted EBITDA
(Dollars
in thousands)
(Unaudited)
|
Three Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
GAAP
net loss
|
$ | (26,447 | ) | $ | (681 | ) | ||
|
Interest
income
|
(144 | ) | (144 | ) | ||||
|
Interest
expense
|
20 | 68 | ||||||
|
Provision
for (benefit from) income taxes
|
29,797 | (1,037 | ) | |||||
|
Depreciation
and amortization
|
4,678 | 3,824 | ||||||
|
Amortization
of acquired identifiable intangibles
|
4,600 | 4,948 | ||||||
|
EBITDA
(non-GAAP)
|
12,504 | 6,978 | ||||||
|
Adjustments:
|
||||||||
|
Acquisition
related and other non-recurring professional fees
|
1,180 | 1,808 | ||||||
|
Reversal
of pre-acquisition accrued contingency
|
- | (609 | ) | |||||
|
Contra-revenue
|
779 | - | ||||||
|
Adjusted
EBITDA (non-GAAP)
|
$ | 14,463 | $ | 8,177 | ||||
Page
10
Attachment
(4) Reconciliation Data
DEALERTRACK
HOLDINGS, INC.
Reconciliation
of GAAP Net Loss to Non-GAAP Adjusted Net Income
(Dollars
in thousands)
(Unaudited)
|
Three Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
GAAP
net loss
|
$ | (26,447 | ) | $ | (681 | ) | ||
|
Adjustments:
|
||||||||
|
Deferred
tax asset valuation allowance (non-taxable)
|
28,406 | - | ||||||
|
Stock-based
compensation
|
2,554 | 3,000 | ||||||
|
Amortization
of acquired identifiable intangibles
|
4,600 | 4,948 | ||||||
|
Acquisition
related and other non-recurring professional fees
|
1,180 | 1,808 | ||||||
|
Reversal
of pre-acquisition accrued contingency
|
- | (609 | ) | |||||
|
Contra-revenue
|
779 | - | ||||||
|
Tax
impact of adjustments (a)
|
(3,285 | ) | (3,646 | ) | ||||
|
Adjusted
net income (non-GAAP)
|
$ | 7,787 | $ | 4,820 | ||||
(a) The
tax impact of adjustments for the three months ended December 31, 2010, are
based on a U.S. statutory tax rate of 36.9% applied to taxable adjustments other
than amortization of acquired identifiable intangibles and stock-based
compensation expense, which are based on a blended tax rate of 35.3% and 36.7%,
respectively. The tax impact of adjustments for the three months ended December
31, 2009, are based on a U.S. effective tax rate of 37.8% applied to taxable
adjustments other than amortization of acquired identifiable intangibles and
stock-based compensation expense, which are based on a blended tax rate of 37.0%
and 37.8%, respectively.
Page
11
Attachment
(4) Reconciliation Data
DEALERTRACK
HOLDINGS, INC.
Reconciliation
of GAAP Loss to Non-GAAP Adjusted EBITDA
(Dollars
in thousands)
(Unaudited)
|
Twelve Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
GAAP
net loss
|
$ | (27,833 | ) | $ | (4,334 | ) | ||
|
Interest
income
|
(525 | ) | (1,081 | ) | ||||
|
Interest
expense
|
175 | 221 | ||||||
|
Provision
for (benefit from) income taxes
|
30,597 | (3,519 | ) | |||||
|
Depreciation
and amortization
|
17,329 | 14,719 | ||||||
|
Amortization
of acquired identifiable intangibles
|
19,424 | 20,341 | ||||||
|
EBITDA
(non-GAAP)
|
39,167 | 26,347 | ||||||
|
Adjustments:
|
||||||||
|
Restructuring
costs (including stock-based compensation) (a)
|
- | 6,686 | ||||||
|
Acquisition
related and other non-recurring professional fees
|
1,905 | 2,407 | ||||||
|
Realized
gain on securities
|
(582 | ) | (1,393 | ) | ||||
|
Reversal
of pre-acquisition accrued contingency
|
- | (609 | ) | |||||
|
Acquisition
related earn-out compensation expense
|
- | 1,000 | ||||||
|
Contra-revenue
|
1,580 | - | ||||||
|
Adjusted
EBITDA (non-GAAP)
|
$ | 42,070 | $ | 34,438 | ||||
(a) Includes
$3.9 million in non-cash costs related to a reduction in
workforce.
Page
12
Attachment
(4) Reconciliation Data
DEALERTRACK
HOLDINGS, INC.
Reconciliation
of GAAP Net Loss to Non-GAAP Adjusted Net Income
(Dollars
in thousands)
(Unaudited)
|
Twelve Months Ended
|
||||||||
|
December 31,
|
||||||||
|
2010
|
2009
|
|||||||
|
GAAP
net loss
|
$ | (27,833 | ) | $ | (4,334 | ) | ||
|
Adjustments:
|
||||||||
|
Deferred
tax asset valuation allowance (non-taxable)
|
28,406 | - | ||||||
|
Stock-based
compensation (excluding restructuring costs)
|
11,233 | 13,104 | ||||||
|
Amortization
of acquired identifiable intangibles
|
19,424 | 20,341 | ||||||
|
Acquisition
related and other non-recurring professional fees
|
1,905 | 2,407 | ||||||
|
Realized
gain on securities (non-taxable)
|
(582 | ) | (1,393 | ) | ||||
|
Amended
state tax return impact (non-taxable)
|
101 | (1,070 | ) | |||||
|
Restructuring
costs (including stock-based compensation) (a)
|
- | 6,686 | ||||||
|
Reversal
of pre-acquisition accrued contingency
|
- | (609 | ) | |||||
|
Acquisition
related earn-out compensation expense
|
- | 1,000 | ||||||
|
Contra-revenue
|
1,580 | - | ||||||
|
Tax
impact of adjustments
(b)
|
(12,291 | ) | (16,165 | ) | ||||
|
Adjusted
net income (non-GAAP)
|
$ | 21,943 | $ | 19,967 | ||||
(a)
Includes $3.9 million in non-cash costs related to a reduction in
workforce.
(b) The
tax impact of adjustments for the year ended December 31, 2010, are based on a
U.S. statutory tax rate of 36.9% applied to taxable adjustments other than
amortization of acquired identifiable intangibles and stock-based compensation
expense, which are based on a blended tax rate of 35.4% and 36.7%, respectively.
The tax impact of adjustments for the year ended December 31, 2009, are based on
a U.S. effective tax rate of 37.8% applied to taxable adjustments other than
amortization of acquired identifiable intangibles and stock-based compensation
expense, which are based on a blended tax rate of 37.0% and 37.8%,
respectively.
Page
13
Attachment
(4) Reconciliation Data
DEALERTRACK
HOLDINGS, INC.
Reconciliation
of Forward-looking GAAP Net Income to Forward-looking Non-GAAP Adjusted
EBITDA
(Dollars
in millions)
(Unaudited)
|
Year Ending December 31, 2011
|
||||||||
|
Expected Range
|
||||||||
|
GAAP
net income
|
$ | 2.9 | $ | 5.4 | ||||
|
Net
interest income
|
(0.1 | ) | (0.1 | ) | ||||
|
Provision
for income taxes
|
4.0 | 5.5 | ||||||
|
Depreciation
and amortization
|
23.0 | 23.0 | ||||||
|
Amortization
of acquired identifiable intangibles
|
21.5 | 21.5 | ||||||
|
EBITDA
(non-GAAP)
|
51.3 | 55.3 | ||||||
|
Adjustments:
|
||||||||
|
Non-recurring
costs (a)
|
2.0 | 2.0 | ||||||
|
Contra-revenue
|
3.7 | 3.7 | ||||||
|
Adjusted
EBITDA (non-GAAP)
|
$ | 57.0 | $ | 61.0 | ||||
(a)
Includes certain professional fees, integration costs and restructuring
costs.
Page
14
Attachment
(4) Reconciliation Data
DEALERTRACK
HOLDINGS, INC.
Reconciliation
of Forward-looking GAAP Net Income to Forward-looking Non-GAAP Adjusted Net
Income
(Dollars
in millions)
(Unaudited)
|
Year Ending December 31, 2011
|
||||||||
|
Expected Range
|
||||||||
|
GAAP
net income
|
$ | 2.9 | $ | 5.4 | ||||
|
Adjustments:
|
||||||||
|
Stock-based
compensation charges
|
11.6 | 11.6 | ||||||
|
Amortization
of acquired identifiable intangibles
|
21.5 | 21.5 | ||||||
|
Non-recurring
costs (a)
|
2.0 | 2.0 | ||||||
|
Deferred
tax asset valuation allowance (non-taxable)
|
1.5 | 1.5 | ||||||
|
Contra-revenue
|
3.7 | 3.7 | ||||||
|
Tax
impact of adjustments (b)
|
(14.0 | ) | (14.0 | ) | ||||
|
Adjusted
net income (non-GAAP)
|
$ | 29.2 | $ | 31.7 | ||||
(a)
Includes certain professional fees, integration costs and restructuring
costs.
(b) The
tax impact of adjustments are based on a blended tax rate of 36.1% applied to
taxable adjustments.
Page
15
Attachment
(5) Summary of Business Statistics
DEALERTRACK
HOLDINGS, INC.
Summary
of Business Statistics (Unaudited)
Three
months ended
|
Dec 31,
|
Sep 30,
|
Jun 30,
|
Mar 31,
|
Dec 31,
|
||||||||||||||||
|
2010
|
2010
|
2010
|
2010
|
2009
|
||||||||||||||||
|
Active
U.S. dealers (a)
|
16,829 | 16,961 | 17,120 | 17,102 | 16,690 | |||||||||||||||
|
Active
U.S. lenders (b)
|
970 | 921 | 891 | 847 | 823 | |||||||||||||||
|
Transactions
processed (in thousands)(c)
|
11,997 | 13,296 | 12,239 | 11,841 | 10,114 | |||||||||||||||
|
Active
U.S. lender to dealer relationships (d)
|
137,058 | 137,388 | 137,919 | 127,724 | 118,209 | |||||||||||||||
|
Subscribing
dealers (e)
|
13,996 | 13,856 | 13,468 | 13,705 | 13,852 | |||||||||||||||
(a) We
consider a dealer to be active as of a date if the dealer completed at least one
revenue-generating credit application processing transaction using the U.S.
DealerTrack network during the most recently ended calendar month. For the three
months ended March 31, 2010, the number of active U.S. dealers was updated from
the number originally reported (16,860). For the three months ended June 30,
2010, the number of active U.S. dealers was updated from the number originally
reported (17,343). The number of active U.S. dealers is based on the number of
dealer accounts as communicated by lenders on the DealerTrack
network.
(b)
We consider a lender to be active in our DealerTrack network as of a date if it
is accepting credit application data electronically from U.S. dealers in the
DealerTrack network.
(c)
Represents revenue-generating transactions processed in the DealerTrack,
DealerTrack Digital Services and DealerTrack Canada networks at the end of a
given period.
(d)
Each lender to dealer relationship represents a pair between an active U.S.
lender and an active U.S. dealer.
(e) Represents
the number of dealerships with one or more active subscriptions on the
DealerTrack or DealerTrack Canada networks at the end of a given
period.
Page
16
Attachment
(5) Summary of Business Statistics
DEALERTRACK
HOLDINGS, INC.
Summary
of Business Statistics (Unaudited)
Three
months ended
|
Dec 31,
|
Sep 30,
|
Jun 30,
|
Mar 31,
|
Dec 31,
|
||||||||||||||||
|
2010
|
2010
|
2010
|
2010
|
2009
|
||||||||||||||||
|
Transaction
revenue (in
thousands)
|
$ | 25,091 | $ | 27,188 | $ | 26,851 | $ | 22,870 | $ | 20,237 | ||||||||||
|
Subscription
revenue (in
thousands)
|
$ | 32,205 | $ | 31,273 | $ | 30,341 | $ | 29,728 | $ | 28,982 | ||||||||||
|
Other
revenue (in
thousands)
|
$ | 4,710 | $ | 4,667 | $ | 4,715 | $ | 4,187 | $ | 4,028 | ||||||||||
|
Average
transaction price (a)
|
$ | 2.16 | $ | 2.09 | $ | 2.19 | $ | 1.93 | $ | 2.00 | ||||||||||
|
Average
monthly subscription revenue per subscribing dealership (b)
|
$ | 769 | $ | 759 | $ | 749 | $ | 719 | $ | 695 | ||||||||||
(a)
Represents the average revenue earned per transaction processed in the
DealerTrack, DealerTrack Aftermarket, DealerTrack Digital Services and
DealerTrack Canada networks during a given period. Revenue used in calculation
adds back contra-revenue.
(b)
For the 2010 periods, represents net subscription revenue divided by average
subscribing dealers for a given period in the DealerTrack and DealerTrack Canada
networks.
TRAK-E
###
Page
17