Raises 2012 Revenue and Non-GAAP Earnings Guidance
LAKE SUCCESS, N.Y. -- DealerTrack Holdings, Inc. (Nasdaq: TRAK) today reported financial results for the first quarter ended March 31, 2012.
GAAP Results for the First Quarter 2012
Revenue for the quarter was $91.6 million, as compared to $77.2 million for the first quarter of 2011
GAAP net income for the quarter was $17.0 million, as compared to $24.7 million for the first quarter of 2011
Diluted GAAP net income per share for the quarter was $0.39, as compared to $0.59 for the first quarter of 2011
GAAP net income for the first quarter of 2012 was positively impacted by $16.1 million (net of tax), or $0.37 per share, from a non-cash gain related to the contribution of Chrome to the Chrome Data Solutions, LP joint venture. GAAP net income for the first quarter of 2011 was positively impacted by $24.5 million, or $0.58 per share, from a non-cash reduction in the valuation allowance against the company's net U.S. deferred tax assets.
Non-GAAP Results for the First Quarter 2012
Adjusted EBITDA for the quarter was $19.4 million, as compared to $15.5 million for the first quarter of 2011
Adjusted net income for the quarter was $9.4 million, as compared to $7.5 million for the first quarter of 2011
Diluted adjusted net income per share for the quarter was $0.22, as compared to $0.18 for the first quarter of 2011
Guidance for 2012 Annual Revenue Performance
DealerTrack raised annual guidance for revenue and non-GAAP earnings to reflect its stronger outlook for the year, and adjusted its expected GAAP earnings to further reflect certain interest expense and costs related to the company's issuance of $200 million in senior convertible notes in March 2012, as follows:
Expected GAAP Results
Revenue for the year is expected to be between $375.0 million and $382.0 million, an increase from prior guidance of between $365.0 to $372.0 million
GAAP net income for the year is expected to be between $27.0 million and $30.0 million, a decrease from prior guidance of between $33.0 million and $36.0 million
Diluted GAAP net income per share for the year is expected to be between $0.61 and $0.68, a decrease from prior guidance of between $0.75 and $0.81 per share
Expected Non-GAAP Results
Adjusted EBITDA for the year is expected to be between $94.0 million and $97.0 million, an increase from prior guidance of between $91.0 and $95.0 million
Adjusted net income for the year is expected to be between $46.0 million and $49.0 million, an increase from prior guidance of between $44.0 and $47.0 million
Diluted adjusted net income per share for the year is expected to be between $1.04 and $1.11, an increase from prior guidance of between $0.99 and $1.06
The guidance assumes that new car sales by franchised dealers will be approximately 14.2 million units, up from our previous expectation of 13.5 million units, and used car sales by franchised dealers will be approximately 14.0 million units for 2012, an amount unchanged from our previous estimate. Diluted GAAP net income and adjusted net income per share guidance for the year continue to be based on an estimated 44.3 million diluted weighted average shares outstanding.
Mark F. O'Neil, chairman and chief executive officer of DealerTrack, commented, "We are pleased with our strong performance in the first quarter. Transaction revenue grew at a multiple of growth in car sales as we increased the average transaction revenue per car sold. Our subscription business also performed well, as we saw particularly strong interest in our Inventory solution." O'Neil further commented, "We are increasing our revenue guidance for 2012, reflecting strong first quarter results and an increase in our 2012 car sales expectations. Continued momentum combined with investments in our future growth make us more confident in our outlook for 2012 and beyond."
Conference Call
DealerTrack will host a conference call to discuss its first quarter 2012 results and other matters on May 8, 2012 at 5:00 p.m. Eastern Time. The conference call will be webcast live on the Internet at ir.dealertrack.com. 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 May 21, 2012.
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, stock-based compensation, and contra-revenue and may exclude certain items such as: impairment charges, restructuring charges, impact of acquisition-related activity (including contingent consideration changes, compensation expense, basis difference amortization, and professional service fees), realized gains or losses on sales of securities, gains or losses on sales or disposals of subsidiaries, and certain other non-recurring items.
All stock-based compensation expense is excluded from the calculation of the adjusted EBITDA non-GAAP measure. This may reduce the comparability with prior periods. This non-cash expense was included in presentations prior to fourth quarter 2011.
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, and contra-revenue, and may also exclude certain items such as: impairment charges, restructuring charges, impact of acquisition-related activity (including contingent consideration changes, compensation expense, basis difference amortization, and professional service fees), realized gains or losses on sales of securities, gains or losses on sales or disposals of subsidiaries, adjustments to deferred tax asset valuation allowances, non-cash interest expense and certain other non-recurring items. These adjustments to net income, which are shown before taxes, are adjusted for their tax impact.
Adjusted EBITDA and adjusted net income are presented because management believes that they provide additional information with respect to the performance of our fundamental business activities and are also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. Adjusted EBITDA and adjusted net income are also presented because 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, in 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 (loss) and has provided a reconciliation of adjusted EBITDA to GAAP net income (loss) and adjusted net income to GAAP net income (loss) in this press release.
About DealerTrack (www.dealertrack.com)
DealerTrack's intuitive and high-value web-based software solutions and services enhance efficiency and profitability for all major segments of the retail automotive industry, including dealers, lenders, OEMs, third-party retailers, agents and aftermarket providers. DealerTrack, whose solution set for dealers is the industry's most comprehensive, operates the largest online credit application network in the United States, connecting over 17,000 dealers with more than 1,100 lenders. DealerTrack's Dealer Management System (DMS) provides dealers with easy-to-use tools and real-time data access to enhance their efficiency. DealerTrack's Inventory offerings provide vehicle inventory management and merchandising solutions to help dealers drive higher in-store and online traffic with state-of-the-art, real-time listings, accelerate used-vehicle turn rates, and increase dealer profits. DealerTrack's Sales and F&I solutions allow dealers to streamline the entire sales process as they structure deals from a single integrated platform. Its Compliance offering helps dealers meet legal and regulatory requirements, and protect their assets. DealerTrack also offers additional solutions for the automotive industry, including electronic motor vehicle registration and titling applications, paper title storage, and digital document services. For more information visit: www.dealertrack.com.
05/08/12
