Aug. 5, 2013 11:21 UTC
Dealertrack Technologies, Inc. Reports Second Quarter 2013 Financial Results
Updates 2013 Guidance to Reflect Strong Second Quarter Performance and 26% Year over Year Revenue Growth
LAKE SUCCESS, N.Y.--(BUSINESS WIRE)-- Dealertrack Technologies, Inc. (NASDAQ: TRAK) today reported financial results for the second quarter ended June 30, 2013.
GAAP Results for the Second Quarter 2013
| • | Revenue for the quarter was $121.8 million, as compared to $96.4 million for the second quarter of 2012. |
| • | GAAP net income for the quarter was $3.8 million, as compared to $5.9 million for the second quarter of 2012. |
| • | Diluted GAAP net income per share for the quarter was $0.09, as compared to $0.13 for the second quarter of 2012. |
GAAP net income for the second quarter of 2012 was positively impacted by a $3.5 million, or $0.08 per share, gain (net of taxes) from the sale of certain Chrome branded assets that were not contributed to our Chrome Data joint venture.
Non-GAAP Results for the Second Quarter 2013
| • | Adjusted EBITDA for the quarter was $32.8 million, as compared to $25.0 million for the second quarter of 2012. |
| • | Adjusted net income for the quarter was $16.7 million, as compared to $13.7 million for the second quarter of 2012. |
| • | Diluted adjusted net income per share for the quarter was $0.37, as compared to $0.31 for the second quarter of 2012. |
GAAP Results for the Six Months Ended June 30, 2013
| • | Revenue for the six months was $230.8 million, as compared to $188.0 million for the same period in 2012. |
| • | GAAP net income for the six months was $3.8 million, as compared to GAAP net income of $22.9 million for the same period in 2012. |
| • | Diluted GAAP net loss per share for the six months was $0.09, as compared to GAAP net income per share of $0.52 for the same period in 2012. |
GAAP net income for the six months ended June 30, 2012 was positively impacted by a $16.1 million, or $0.37 per share, gain (net of taxes) for the contribution of the net assets of Chrome to the Chrome Data Solutions joint venture and a $3.5 million, or $0.08 per share, gain (net of taxes) from the sale of certain Chrome branded assets that were not contributed to our Chrome Data joint venture.
Non-GAAP Results for the Six Months Ended June 30, 2013
| • | Adjusted EBITDA for the six months was $57.1 million, as compared to $44.5 million for the same period in 2012. |
| • | Adjusted net income for the six months was $28.7 million, as compared to $23.2 million for the same period in 2012. |
| • | Diluted adjusted net income per share for the six months was $0.64, as compared to $0.53 for the same period in 2012. |
Mark F. O’Neil, chairman and chief executive officer of Dealertrack Technologies, Inc., commented, “Our momentum continued into the second quarter with revenue of nearly $122 million, up 26% in total from a year ago and up 17% on an organic basis. Customers are increasingly embracing our vision of transforming auto retail through integrated technology solutions. During the second quarter, we saw accelerating organic subscription revenue growth. We also saw strong trends in transaction revenue independent of healthy car sales and credit trends, as we increased average transaction price per car sold through growing adoption and cross selling of registration, titling and lien services. We are optimistic that these positive trends will continue through the end of the year, as reflected in the increase of our full year guidance, and believe they position us for sustainable growth in the years ahead.”
Updated Guidance for 2013
Dealertrack updated its 2013 annual guidance as follows to reflect its strong second quarter performance and increasing revenue growth trends:
Expected GAAP Results
| • | Revenue for the year is expected to be between $464.0 million and $468.0 million, an increase from prior guidance of between $453.0 million and $462.0 million. |
| • | GAAP net income for the year is expected to be between $10.0 million and $12.0 million, compared to prior guidance of between $9.5 million and $12.5 million. |
| • | Diluted GAAP net income per share for the year is expected to be between $0.22 and $0.27, compared to prior guidance of between $0.21 and $0.28 per share. |
Expected Non-GAAP Results
| • | Adjusted EBITDA for the year is expected to be between $115.0 million and $118.0 million, an increase from prior guidance of between $112.5 million and $116.5 million. |
| • | Adjusted net income for the year is expected to be between $57.0 million and $59.0 million, an increase from prior guidance of between $55.0 million and $58.0 million. |
| • | Diluted adjusted net income per share for the year is expected to be between $1.26 and $1.31, an increase from prior guidance of between $1.21 and $1.28. |
The updated guidance reflects the benefit we have seen from increased car sales trends in the first half of the year and what we expect for the remainder of the year. We are increasing our estimate of new car sales by franchised dealers by 300,000 units, to approximately 15.5 million units, and similarly increasing our estimate for used car sales by franchised dealers by 400,000 units to approximately 15.4 million units in 2013. Diluted GAAP net income and adjusted net income per share guidance for the year is based on an estimated 45.2 million diluted weighted average shares outstanding, a decrease from prior guidance of 45.4 million.
Conference Call
Dealertrack will host a conference call to discuss its second quarter 2013 results on August 5, 2013 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 Technologies, Inc. website until August 27, 2013.
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 (loss). Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income (loss) excluding interest, taxes, depreciation and amortization expenses, stock-based compensation, contra-revenue and certain items, as applicable, 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 on sales of previously impaired securities, gains or losses on sales or disposals of subsidiaries and other assets, rebranding expense 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-revenue, and certain items, as applicable, 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 on sales of previously impaired securities, gains or losses on sales or disposals of subsidiaries and other assets, adjustments to deferred tax asset valuation allowances, non-cash interest expense, rebranding expense and certain other non-recurring items. These adjustments to net income (loss), which are shown before taxes, are adjusted for their tax impact at their applicable statutory rates.
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 acquisition method of accounting 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 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 Technologies (www.dealertrack.com)
Dealertrack Technologies' intuitive and high-value web-based software solutions and services enhance efficiency and profitability for all major segments of the automotive retail industry, including dealers, lenders, OEMs, third-party retailers, agents and aftermarket providers. In addition to the industry's largest online credit application network, connecting more than 20,000 dealers with more than 1,300 lenders, Dealertrack Technologies delivers the industry's most comprehensive solution set for automotive retailers, including Dealer Management System (DMS), Inventory, Sales and F&I, Interactive and Registration and Titling solutions. For more information visit www.dealertrack.com.
Safe Harbor for Forward-Looking and Cautionary Statements
Statements in this press release regarding Dealertrack’s expected 2013 performance based on both GAAP and non-GAAP measures, 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.
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; credit availability; 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, except as required by law.
| DEALERTRACK TECHNOLOGIES, INC. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net revenue | $ | 121,782 | $ | 96,396 | $ | 230,841 | $ | 188,013 | ||||||||
| Cost of revenue | 67,587 | 53,712 | 130,775 | 106,862 | ||||||||||||
| Product development | 4,064 | 2,944 | 7,694 | 5,938 | ||||||||||||
| Selling, general and administrative | 42,502 | 34,067 | 83,992 | 68,195 | ||||||||||||
| Total operating expenses | 114,153 | 90,723 | 222,461 | 180,995 | ||||||||||||
| Income from operations | 7,629 | 5,673 | 8,380 | 7,018 | ||||||||||||
| Interest expense, net | (3,228 | ) | (3,024 | ) | (6,468 | ) | (3,951 | ) | ||||||||
| Other income (expense), net | 62 | (926 | ) | 128 | (850 | ) | ||||||||||
| Gain on disposal of subsidiary and sale of other assets | — | 5,500 | — | 33,193 | ||||||||||||
| Earnings from equity method investment, net | 1,279 | 145 | 2,498 | 308 | ||||||||||||
| Income before provision for income taxes, net | 5,742 | 7,368 | 4,538 | 35,718 | ||||||||||||
| Provision for income taxes, net | (1,903 | ) | (1,443 | ) | (733 | ) | (12,832 | ) | ||||||||
| Net income | $ | 3,839 | $ | 5,925 | $ | 3,805 | $ | 22,886 | ||||||||
| Basic net income per share | $ | 0.09 | $ | 0.14 | $ | 0.09 | $ | 0.54 | ||||||||
| Diluted net income per share | $ | 0.09 | $ | 0.13 | $ | 0.09 | $ | 0.52 | ||||||||
| Weighted average common stock outstanding (basic) | 43,545 | 42,470 | 43,360 | 42,286 | ||||||||||||
| Weighted average common stock outstanding (diluted) | 44,881 | 43,957 | 44,741 | 43,839 | ||||||||||||
| Adjusted EBITDA (non-GAAP) (a) | $ | 32,835 | $ | 25,037 | $ | 57,064 | $ | 44,456 | ||||||||
| Adjusted EBITDA margin (non-GAAP) (b) | 27 | % | 26 | % | 25 | % | 24 | % | ||||||||
| Adjusted net income (non-GAAP) (a) | $ | 16,702 | $ | 13,714 | $ | 28,738 | $ | 23,158 | ||||||||
| Diluted adjusted net income per share (non-GAAP) | $ | 0.37 | $ | 0.31 | $ | 0.64 | $ | 0.53 | ||||||||
| Stock-based compensation expense was classified as follows: | ||||||||||||||||
| Cost of revenue | $ | 786 | $ | 590 | $ | 1,478 | $ | 1,225 | ||||||||
| Product development | 195 | 206 | 363 | 420 | ||||||||||||
| Selling, general and administrative | 2,874 | 2,586 | 5,285 | 5,067 | ||||||||||||
| $ | 3,855 | $ | 3,382 | $ | 7,126 | $ | 6,712 | |||||||||
(a) See Reconciliation Data.
(b) Represents adjusted EBITDA as a percentage of net revenue.
| DEALERTRACK TECHNOLOGIES, INC. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (Dollars in thousands) | ||||||||
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 121,579 | $ | 143,811 | ||||
| Marketable securities | 43,808 | 34,031 | ||||||
| Customer funds | 5,262 | 1,999 | ||||||
| Customer funds receivable | 29,003 | 14,077 | ||||||
| Accounts receivable, net | 58,507 | 43,679 | ||||||
| Deferred tax assets, net | 4,412 | 4,412 | ||||||
| Prepaid expenses and other current assets | 26,641 | 19,142 | ||||||
| Total current assets | 289,212 | 261,151 | ||||||
| Marketable securities – long-term | — | 4,428 | ||||||
| Property and equipment, net | 31,289 | 27,407 | ||||||
| Investments | 121,666 | 122,808 | ||||||
| Software and website development costs, net | 57,457 | 46,182 | ||||||
| Intangible assets, net | 114,282 | 117,599 | ||||||
| Goodwill | 278,142 | 270,646 | ||||||
| Deferred tax assets, net | 43,881 | 43,611 | ||||||
| Other assets — long-term | 13,379 | 16,684 | ||||||
| Total assets | $ | 949,308 | $ | 910,516 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Accounts payable and accrued expenses | $ | 51,908 | $ | 50,852 | ||||
| Customer funds payable | 34,265 | 16,076 | ||||||
| Deferred revenue | 8,474 | 7,959 | ||||||
| Deferred tax liabilities | 3,125 | 3,031 | ||||||
| Due to acquirees | 11,439 | 11,124 | ||||||
| Total current liabilities | 109,211 | 89,042 | ||||||
| Long-term liabilities | 252,489 | 250,157 | ||||||
| Total liabilities | 361,700 | 339,199 | ||||||
| Total stockholders' equity | 587,608 | 571,317 | ||||||
| Total liabilities and stockholders' equity | $ | 949,308 | $ | 910,516 | ||||
| DEALERTRACK TECHNOLOGIES, INC. | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| (Dollars in thousands) | ||||||||
| (Unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| Operating activities: | ||||||||
| Net income | $ | 3,805 | $ | 22,886 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 28,821 | 24,927 | ||||||
| Deferred tax (benefit) provision | (653 | ) | 11,389 | |||||
| Stock-based compensation expense | 7,126 | 6,712 | ||||||
| Provision for doubtful accounts and sales credits | 5,559 | 3,831 | ||||||
| Earnings from equity method investment, net | (2,498 | ) | (308 | ) | ||||
| Deferred compensation | 84 | 75 | ||||||
| Stock-based compensation windfall tax benefit | (4,278 | ) | (4,108 | ) | ||||
| Gain on disposal of subsidiary and sale of other assets | — | (33,193 | ) | |||||
| Realized gain on sale of securities | (11 | ) | — | |||||
| Amortization of debt issuance costs and debt discount | 4,666 | 2,981 | ||||||
| Change in contingent consideration | (500 | ) | (900 | ) | ||||
| Change in fair value of warrant | — | 1,000 | ||||||
| Amortization of deferred interest | 636 | 164 | ||||||
| Changes in operating assets and liabilities, net of effects of acquisitions: | ||||||||
| Accounts receivable | (20,535 | ) | (7,223 | ) | ||||
| Prepaid expenses and other current assets | (4,185 | ) | 478 | |||||
| Other assets — long-term | 7,075 | 4,092 | ||||||
| Accounts payable and accrued expenses | (4,351 | ) | (6,130 | ) | ||||
| Deferred rent | 178 | 7 | ||||||
| Deferred revenue | 453 | 613 | ||||||
| Other liabilities — long-term | (884 | ) | (743 | ) | ||||
| Net cash provided by operating activities | 20,508 | 26,550 | ||||||
| Consolidated Statements of Cash Flows (continued) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| Investing activities: | ||||||||
| Capital expenditures | (6,112 | ) | (4,340 | ) | ||||
| Capitalized software and website development costs | (17,360 | ) | (9,223 | ) | ||||
| Proceeds from sale of Chrome-branded asset | — | 5,500 | ||||||
| Purchases of marketable securities | (27,231 | ) | (70,175 | ) | ||||
| Proceeds from sales and maturities of marketable securities | 21,309 | 4,500 | ||||||
| Cash contributed for equity method investment | — | (1,750 | ) | |||||
| Payment for acquisition of businesses, net of acquired cash | (20,984 | ) | — | |||||
| Net cash used in investing activities | (50,378 | ) | (75,488 | ) | ||||
| Financing activities: | ||||||||
| Principal payments on capital lease obligations and financing arrangements | (74 | ) | (445 | ) | ||||
| Proceeds from stock purchase plan and exercise of stock options | 5,295 | 5,451 | ||||||
| Proceeds from issuance of senior convertible notes | — | 200,000 | ||||||
| Payments for debt issuance costs | — | (7,723 | ) | |||||
| Payments for convertible note hedges | — | (43,940 | ) | |||||
| Proceeds from issuance of warrants | — | 29,740 | ||||||
| Purchases of treasury stock | (762 | ) | (742 | ) | ||||
| Stock-based compensation windfall tax benefit | 4,278 | 4,108 | ||||||
| Net cash provided by financing activities | 8,737 | 186,449 | ||||||
| Net (decrease) increase in cash and cash equivalents | (21,133 | ) | 137,511 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1,099 | ) | (69 | ) | ||||
| Cash and cash equivalents, beginning of period | 143,811 | 78,709 | ||||||
| Cash and cash equivalents, end of period | $ | 121,579 | $ | 216,151 | ||||
| Supplemental disclosure: | ||||||||
| Cash paid for: | ||||||||
| Income taxes | $ | 3,298 | $ | 2,041 | ||||
| Interest | 1,891 | 260 | ||||||
| Non-cash investing and financing activities: | ||||||||
| Accrued capitalized hardware, software and fixed assets | 5,714 | 1,364 | ||||||
| Assets acquired under capital leases and financing arrangements | 116 | 725 | ||||||
| Non-cash consideration issued for investment in Chrome Data Solutions | — | 42,301 | ||||||
| DEALERTRACK TECHNOLOGIES, INC. | ||||||||||||||||
| Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| GAAP net income | $ | 3,839 | $ | 5,925 | $ | 3,805 | $ | 22,886 | ||||||||
| Interest income | (117 | ) | (184 | ) | (241 | ) | (414 | ) | ||||||||
| Interest expense – cash | 981 | 988 | 2,043 | 1,442 | ||||||||||||
| Interest expense – non-cash | 2,364 | 2,220 | 4,666 | 2,923 | ||||||||||||
| Provision for income taxes, net | 1,903 | 1,443 | 733 | 12,832 | ||||||||||||
| Depreciation of property and equipment and amortization of capitalized software and website costs | 7,165 | 6,295 | 13,746 | 11,395 | ||||||||||||
| Amortization of acquired identifiable intangibles | 7,759 | 6,653 | 15,075 | 13,532 | ||||||||||||
| EBITDA (non-GAAP) | 23,894 | 23,340 | 39,827 | 64,596 | ||||||||||||
| Adjustments: | ||||||||||||||||
| Stock-based compensation | 3,855 | 3,382 | 7,126 | 6,712 | ||||||||||||
| Contra-revenue | 1,381 | 996 | 2,735 | 2,098 | ||||||||||||
| Acquisition-related and other professional fees | 573 | 538 | 1,056 | 737 | ||||||||||||
| Acquisition-related contingent consideration changes and compensation expense, net | 594 | (220 | ) | 629 | (42 | ) | ||||||||||
| Integration and other related costs | 1,567 | 221 | 2,366 | 221 | ||||||||||||
| Gain on disposal of subsidiary and sale of other assets | — | (5,500 | ) | — | (33,193 | ) | ||||||||||
| Amortization of equity method investment basis difference | 706 | 996 | 1,412 | 1,993 | ||||||||||||
| Rebranding expense | 265 | 284 | 1,913 | 334 | ||||||||||||
| Change in fair value of warrant | — | 1,000 | — | 1,000 | ||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 32,835 | $ | 25,037 | $ | 57,064 | $ | 44,456 | ||||||||
| DEALERTRACK TECHNOLOGIES, INC. | ||||||||||||||||
| Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income | ||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| GAAP net income | $ | 3,839 | $ | 5,925 | $ | 3,805 | $ | 22,886 | ||||||||
| Adjustments: | ||||||||||||||||
| Interest expense – non-cash (not tax-impacted) | 2,364 | 2,220 | 4,666 | 2,923 | ||||||||||||
| Amortization of acquired identifiable intangibles | 7,759 | 6,653 | 15,075 | 13,532 | ||||||||||||
| Stock-based compensation | 3,855 | 3,382 | 7,126 | 6,712 | ||||||||||||
| Contra-revenue | 1,381 | 996 | 2,735 | 2,098 | ||||||||||||
| Gain on disposal of subsidiary and sale of other assets | — | (5,500 | ) | — | (33,193 | ) | ||||||||||
| Acquisition-related and other professional fees | 573 | 538 | 1,056 | 737 | ||||||||||||
| Acquisition-related contingent consideration changes and compensation expense, net | 594 | (220 | ) | 629 | (42 | ) | ||||||||||
| Integration and other related costs | 1,810 | 221 | 2,609 | 221 | ||||||||||||
| Rebranding expense | 265 | 284 | 1,913 | 334 | ||||||||||||
| Amortization of equity method investment basis difference | 706 | 996 | 1,412 | 1,993 | ||||||||||||
| Accelerated depreciation of certain technology assets | — | 929 | — | 929 | ||||||||||||
| Change in fair value of warrant | — | 1,000 | — | 1,000 | ||||||||||||
| Amended state tax returns impact (non-taxable) | — | — | 56 | — | ||||||||||||
| Tax impact of adjustments (a) | (6,444 | ) | (3,710 | ) | (12,344 | ) | 3,028 | |||||||||
| Adjusted net income (non-GAAP) | $ | 16,702 | $ | 13,714 | $ | 28,738 | $ | 23,158 | ||||||||
(a) The tax impact of adjustments for the three and six months ended June 30, 2013 are based on a U.S. statutory tax rate of 38.2% 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 38.1% and 37.8%, respectively, for the three months ended June 30, 2013, and 38.1% and 37.7%, respectively, for the six months ended June 30, 2013. The tax impact of adjustments for the three and six months ended June 30, 2012 were based on a U.S. statutory tax rate of 37.4% 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 37.3% and 36.8%, respectively, for the three months ended June 30, 2012, and 37.3% and 36.9%, respectively, for the six months ended June 30, 2012.
A reconciliation of GAAP to non-GAAP measures is included in our investor presentation, which also includes the impact of reconciled items on individual income statement classifications.
| DEALERTRACK TECHNOLOGIES, INC. | ||||||||
| Reconciliation of Forward-looking GAAP Net Income to Forward-looking Non-GAAP Adjusted EBITDA | ||||||||
| (Dollars in millions) | ||||||||
| (Unaudited) | ||||||||
| Year Ending December 31, 2013 Expected Range | ||||||||
| GAAP net income | $ | 10.0 | $ | 12.0 | ||||
| Interest, net | 13.0 | 13.0 | ||||||
| Income taxes, net | 6.1 | 7.3 | ||||||
| Amortization of basis difference from joint venture | 2.8 | 2.8 | ||||||
| Depreciation and amortization | 26.2 | 26.0 | ||||||
| Amortization of acquired identifiable intangibles | 30.8 | 30.8 | ||||||
| EBITDA (non-GAAP) | 88.9 | 91.9 | ||||||
| Adjustments: | ||||||||
| Stock-based compensation | 14.9 | 14.9 | ||||||
| Non-recurring costs (a) | 6.0 | 6.0 | ||||||
| Contra-revenue | 5.2 | 5.2 | ||||||
| Adjusted EBITDA - (non-GAAP) | $ | 115.0 | $ | 118.0 | ||||
(a) Includes certain professional fees, integration and other related costs, acquisition-related compensation expense, rebranding and fair value adjustments.
| Reconciliation of Forward-looking GAAP Net Income to Forward-looking Non-GAAP Adjusted Net Income | ||||||||
| (Dollars in millions) | ||||||||
| (Unaudited) | ||||||||
| Year Ending December 31, 2013 Expected Range | ||||||||
| GAAP net income | $ | 10.0 | $ | 12.0 | ||||
| Adjustments: | ||||||||
| Stock-based compensation | 14.9 | 14.9 | ||||||
| Amortization of acquired identifiable intangibles | 30.8 | 30.8 | ||||||
| Amortization of basis difference from joint venture | 2.8 | 2.8 | ||||||
| Non-cash interest expense (not tax-impacted) | 9.3 | 9.3 | ||||||
| Non-recurring costs (a) | 6.0 | 6.0 | ||||||
| Contra-revenue | 5.2 | 5.2 | ||||||
| Tax impact of adjustments (b) | (22.0 | ) | (22.0 | ) | ||||
| Adjusted net income (non-GAAP) | $ | 57.0 | $ | 59.0 | ||||
(a) Includes certain professional fees, integration and other related costs, acquisition-related compensation
expense, rebranding, accelerated depreciation and fair value adjustments.
(b) The tax impact of adjustments are based on a blended tax rate of 37% applied to taxable adjustments.
| DEALERTRACK TECHNOLOGIES, INC. | ||||||||||||||||||||
| Summary of Business Statistics | ||||||||||||||||||||
| Three months ended | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Jun 30, | Mar 31, | Dec 31, | Sep 30, | Jun 30, | ||||||||||||||||
| 2013 | 2013 | 2012 | 2012 | 2012 | ||||||||||||||||
| Active U.S. dealers (a) | 20,205 | 20,041 | 19,067 | 19,107 | 18,638 | |||||||||||||||
| Active U.S. lenders (b) | 1,355 | 1,291 | 1,261 | 1,237 | 1,212 | |||||||||||||||
| Transactions processed (in thousands) (c) | 26,176 | 24,106 | 20,782 | 22,738 | 22,562 | |||||||||||||||
| Active U.S. lender to dealer relationships (d) | 184,273 | 181,578 | 174,628 | 178,809 | 177,570 | |||||||||||||||
| Subscribing dealers (e) | 18,076 | 17,832 | 17,619 | 16,421 | 16,280 | |||||||||||||||
| Transaction revenue (in thousands) | $ | 71,645 | $ | 61,364 | $ | 54,589 | $ | 58,789 | $ | 57,493 | ||||||||||
| Subscription revenue (in thousands) | $ | 44,623 | $ | 42,778 | $ | 42,212 | $ | 35,723 | $ | 33,932 | ||||||||||
| Other revenue (in thousands) | $ | 5,514 | $ | 4,917 | $ | 4,974 | $ | 4,572 | $ | 4,971 | ||||||||||
| Average transaction price (f) | $ | 2.79 | $ | 2.60 | $ | 2.67 | $ | 2.63 | $ | 2.59 | ||||||||||
| Transaction revenue per car sold (g) | $ | 7.38 | $ | 8.99 | $ | 7.18 | $ | 6.47 | $ | 6.12 | ||||||||||
| Average monthly subscription revenue per subscribing dealership (h) | $ | 757 | $ | 737 | $ | 749 | $ | 694 | $ | 697 | ||||||||||
(a) We consider a dealer to be active in our U.S. network 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. The number of active U.S. dealers is based on the number of dealer accounts as communicated by lenders on the U.S.
Dealertrack network.
(b) We consider a lender to be active in our U.S. network as of a date if it is accepting credit application data electronically
from U.S. dealers in the U.S. Dealertrack network.
(c) Represents revenue-generating transactions processed in the U.S. Dealertrack, Dealertrack Aftermarket Services, DealerTrack
Processing Solutions 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 at the end of
a given period.
(e) Represents the number of dealerships in the U.S. and Canada with one or more active subscriptions at the end of a given period.
Subscriptions to Dealertrack CentralDispatch have been excluded as their customers include brokers and carriers in addition to
dealers.
(f) Represents the average revenue earned per transaction processed in the U.S. Dealertrack, Dealertrack Aftermarket, Dealertrack
Processing Solutions and Dealertrack Canada networks during a given period. Revenue used in calculation adds back (excludes) transaction
related contra-revenue.
(g) Represents transaction services revenue divided by our estimate of total new and used car sales for the period in the U.S.
and Canada. Revenue used in calculation adds back (excludes) transaction related contra-revenue.
(h) Represents subscription services revenue divided by average subscribing dealers for a given period in the U.S. and Canada.
Revenue used in the calculation adds back (excludes) subscription related contra-revenue. In addition, subscribing dealers and
subscription services revenue from Dealertrack CentralDispatch have been excluded from the calculation as a majority of these customers
are not dealers.
TRAK-E
| Contacts |
| Dealertrack
Technologies, Inc. MEDIA CONTACT: Ken Engberg, 516-734-3692 kenneth.engberg@dealertrack.com or INVESTOR CONTACT: Garo Toomajanian, 888-450-0478 investorrelations@dealertrack.com |
Source: Dealertrack Technologies, Inc.
View this news release online at:
http://www.businesswire.com/news/home/20130805000000/en
