LAKE SUCCESS, N.Y. — In addition to reporting fourth quarter and full-year results, DealerTrack announced it is hosting a Webinar this Thursday to help lenders prepare for Red Flags regulations.

Featured during this Webinar will be Randy Henrick, associate general counsel of the company.

The event will cover:

-What does the Red Flags Rule require for third-party auto finance?

-What are your obligations for accounts purchased from auto dealers?

-How is red flags compliance different for third-party auto finance versus direct lending to consumers?

The Webinar will be held Feb. 26 at 2 p.m. EST. To reserve space, visit, or call (888) 482-5935.

DealerTrack Shares 4Q Results

Discussing quarterly results and full-year guidance, Mark O'Neil, chairman and chief executive officer of DealerTrack, said his management team expected the second half of last year to be difficult and isn't seeing much change early this year.

"The second half of 2008 was obviously very challenging, and we do not expect the first half of 2009 to improve as it relates to credit availability or car sales. Given this outlook, we took aggressive action early in the new year to realign our work force and business to focus on growth opportunities that we believe will make DealerTrack a stronger, more nimble company," he explained.

"We continue to invest in the solutions that have healthy end-markets today, specifically our DMS and Inventory Management solutions, and expect that these and other subscription products will deliver significant revenue growth in 2009," O'Neil added.

For instance, one of the company's changes occurred last week when officials announced that John Blair, the chief executive officer of Automotive Lease Guide — a company DealerTrack acquired in 2005 — will be stepping down to pursue other business endeavors.

Stepping back into the leadership role for ALG going forward will be Raj Sundaram, who was previously the president of ALG and currently serves as senior vice president of solutions at DealerTrack. 

Continuing on, the company shared GAAP results for the fourth quarter, reporting:

-Revenue for the quarter was $54.7 million, as compared with $60.7 million for the fourth quarter of 2007.

-GAAP net loss for the quarter was $(1.1) million, as compared with GAAP net income of $4.1 million for the fourth quarter of 2007.

-GAAP diluted net loss per share for the quarter was $(0.03), as compared to GAAP diluted net income of $0.10 per share for the fourth quarter of 2007.

For the full year, the company indicated:

-Revenue for the year was $242.7 million, as compared with $233.8 million for 2007.

-GAAP net income for the year was $1.7 million, as compared with $19.8 million for 2007.

-GAAP diluted net income per share for the year was $0.04, as compared with $0.48 per share for 2007.

Offering a bit of guidance for 2009, officials said they are forecasting:

-Revenue for the year to be between $242 million and $250 million.

-GAAP net loss for the year is expected to be between $(11.1) million and $(9.6) million. Included in the expected GAAP net loss for the year are an estimated $4.2 million of amortization of intangible assets and approximately $0.3 million in professional service fees related to the acquisition of certain assets, including the AAX suite of inventory management solutions and services, from JM Dealer Services, Inc. on Jan. 23 and approximately $4.7 million in restructuring charges related to the realignment of the work force and the relocation of the digital services business, which, in each case, are net of taxes.

-GAAP net loss per share for the year is expected to be between $(0.28) and $(0.24).

Additionally, the company pointed out that cash net income guidance for the year is based on an assumed 41.5 million diluted weighted average shares outstanding. GAAP net loss guidance for the year is based on 39.5 million basic weighted average shares outstanding.

The guidance assumes an approximately 10 percent to 15 percent decline in lender-to-dealer relationships in 2009. It also assumes that U.S. new-car sales for 2009 of approximately 10.5-11.5 million units, compared with an approximately 10.5 million run rate in the fourth quarter of 2008, officials explained.

Furthermore, the forecast assumes used-car sales from U.S. franchised dealers of approximately 12 to 13 million units for 2009, compared with 2008 total sales of approximately 13.2 million units.

In other related news, executives said the judge in DealerTrack's pending patent litigation recently moved the trial commencement date from Feb. 24, 2009 to April 21, 2009 due to a conflict in the court's schedule.

Moreover, on March 18, 2008, DealerTrack's board of directors authorized a stock repurchase program. In the quarter ended Dec. 31, 2008, DealerTrack repurchased 0.4 million shares for approximately $5.1 million. In the full-year 2008, DealerTrack repurchased 3.0 million shares for approximately $49.8 million.

In conclusion, O'Neil said, "We maintain a strong balance sheet and believe we will continue to generate strong cash flows from operations throughout 2009. Ultimately, we expect to enter 2010 with an even stronger leadership position in automotive retail software and technology."