LAKE SUCCESS, N.Y. — Reporting its third-quarter results, DealerTrack recently indicated that the tightened credit market has taken a toll, with the number of lender-to-dealer relationships down, along with fewer transactions processed via the platform.

More specifically, the company said the number of lender-to-dealer relationships came in at about 179,000, compared with 227,000 at the beginning of the year. As for transactions, the company said these declined 19 percent to 19.2 million from 23.8 million in the previous year.

However, total subscriptions for the company were 33,123, up 21 percent over 2007. Also, about 65 percent of active dealers now have one or more subscription product. The average monthly revenue for subscribing dealers was $557, up 5 percent from $528 during the third quarter of 2007.

The number of active dealers in the network dropped 7 percent from 22,551, officials reported.

"The National Automobile Dealers Association projects that as many as 700 franchised dealerships will close this year, a decrease of 3 percent industry wide," executives pointed out. "This consolidation is expected to continue in 2009."

On a brighter note, DealerTrack said the number of active financing sources on its network hit 706, up 43 percent from 495 in 2007.

"We are pleased with the continued growth in subscription revenue," said Mark O'Neil, chairman and chief executive officer. "However, the tight credit market and decade-low new-car sales continue to present serious headwinds for transactions on the DealerTrack network.

"We remain confident that when credit availability and consumer confidence rebound, we are well-positioned to see a return of growth in our transaction business," he added.

Looking specifically at the third quarter, the company reported GAAP revenue of $60.5 million, down 4 percent from $62.9 million in the prior year.

GAAP net loss, meanwhile, came in at $2.6 million, a decrease from GAAP net income of $4.5 million for the third quarter of last year.

Also, GAAP diluted net-loss per share for the quarter was $0.07, a decrease from GAAP diluted net income per share of $0.11 in 2007.

Included in these statistics is an impairment charge of $5.7 million related to certain auction rate securities.

"The charge was deemed necessary after an analysis of other-than-temporary impairment factors, including the severity of decline in the securities and current financial market conditions," officials explained.

"Auction rate securities with an original par value of $9.6 million were written down to an estimated fair value of $3.9 million as of Sept. 30, 2008," the company said.

For the nine-month period, the company reported GAAP revenue of $188 million, up 9 percent from $173.1 million.

GAAP net income came in at $2.8 million, down 82 percent from $15.6 million for the same time frame in 2007.

Additionally, GAAP diluted net income per share for the nine-month period was $0.07, an 82-percent decrease from $0.38 per share in 2007.

"Our balance sheet is strong with approximately $200 million in cash and investments," noted O'Neil. "Cash flow from operations during the third quarter of 2008 increased by 63 percent to approximately $20.5 million, compared to $12.6 million a year ago."

Going forward, the company has revised expected GAAP results:

—Revenue for the year is expected to be $240 million to $243 million, compared with the original estimate of $246 million to $243 million.

—GAAP net income for the year is expected to be $1.2 million to $1.7 million, compared with prior estimates of $9.4 million to $12.8 million.

—Finally, GAAP diluted net income per share is expected to come in at $0.03 and $0.04 per share, compared with the original estimate of $0.22 to $0.30 per share.

Officials noted that this guidance is based on a seasonally adjusted annualized rate of 10 to 10.5 million new-car sales for the fourth quarter and continued tightening in the auto lending market.