Asbury Selects DealerTrack as DMS Provider, More
NEW YORK and LAKE SUCCESS, N.Y. — Asbury announced this week that it has selected DealerTrack as its DMS solutions and technology partner.
Asbury's 124 new vehicle franchises currently use DMS systems from three other providers, but will begin systematically replacing them with DealerTrack's Arkona DMS in all of its stores as existing agreements expire, officials explained.
Once the new multi-year contract with DealerTrack is fully implemented, Asbury said it expects to achieve cost savings of more than 50 percent annually.
"We are excited that Asbury chose DealerTrack's Arkona system not only for the strength of our platforms, but also because our companies share a longer-term vision for automotive retailing, that technology can enhance the entire process for the benefit of both dealers and consumers," explained Mark O'Neil, chairman and chief executive officer of DealerTrack.
Charles Oglesby, president and chief executive officer of Asbury, added, "Mark O'Neil and I both firmly believe that through technology we can provide a better customer experience while creating a more efficient retail operation. In particular, DealerTrack's DMS solution stands out based on its Web-based platform, competitive pricing and the open access it provides to integrate with other vendors."
Oglesby continued, "Looking ahead, this is a key step in a longer-term process of implementing a full range of sales, CRM, F&I and other technology solutions, from both DealerTrack and other vendors, and integrating them all into a seamless deal process. We believe this will generate additional 'hard' cost savings for Asbury, as well as significant efficiency benefits and improved customer satisfaction."
O'Neil concluded, "In this competitive situation, with one of the nation's largest auto retailing groups, the winning solution was the result of the strong combination of our technology and vision. We look forward to partnering with Asbury in our mutual efforts to streamline processes and significantly increase retail efficiencies in the industry."
DealerTrack Announces Proposed Public Offering of Common Stock
In other recent news, the company announced that it has filed a registration statement with the Securities and Exchange Commission relating to the proposed public offering of 4 million shares of its common stock.
DealerTrack is offering 2 million shares, and First Advantage Corp.'s affiliate, Credit Management Solutions, the selling stockholder, is offering 2 million shares.
DealerTrack and the selling stockholder said they have granted the underwriters an option to purchase an additional 600,000 shares of DealerTrack's common stock to cover any over-allotments.
The company said it will use the proceeds from the sale for general corporate purposes. Officials noted that DealerTrack will note receive any proceeds from the sale of its common stock by the selling stockholder.
In connection with the proposed offering, the selling stockholder has agreed not to sell, transfer or seek registration of shares of DealerTrack common stock for a period of 90 days following the date of the final prospectus related to the offering without the consent of Lehman Brothers, subject to customary exceptions.
DealerTrack and its executive officers and directors have also agreed to similar restrictions.
Lehman Brothers is the sole book-runner of the proposed offering. William Blair & Co. and Deutsche Bank Securities will serve as co-lead managers and Cowen and Co. LLC, Wachovia Securities, JMP Securities, Thomas Weisel Partners LLC and Barrington Research will serve as co-managers.
In connection with the proposed offering and based upon previously reported and expected results, DealerTrack also updated its guidance for 2007 results to reflect third- and fourth-quarter costs, including those associated with the ongoing integration and expansion of the Arkona dealer management system.
According to the company, the revised guidance for the year, excluding the effects of the proposed offering, is as follows:
Expected GAAP Results
—Revenue is expected to be between $232 million and $234 million as compared with the previous estimate of $230 million to $232 million.
—GAAP net income is expected to be between $19.7 and $20.2 million as compared with the previous estimate of $20.6 million to $21.0 million.
—Diluted GAAP net income per share is expected to be between $0.48 and $0.49, based on an estimate of 40.9 million weighted average diluted shares outstanding for 2007 as compared with the previous estimate of $0.50 to $0.51.
Expected Non-GAAP Results
—EBITDA is expected to be between $65.3 million and $66.1 million as compared with the previous estimate of $66.7 million to $67.3 million.
—Cash net income is expected to be between $42.4 million and $42.9 million as compared with the previous estimate of $42.9 million to $43.3 million.
—Diluted cash net income per share is expected to be between $1.04 and $1.05, based on an estimate of 40.9 million weighted average diluted shares outstanding for 2007 as compared with the previous estimate of $1.06 to $1.07.
Company Names New Board of Director
In a final announcement this morning, DealerTrack said it has named Barry Zwarenstein to serve on its board of directors, effective Nov. 6. Zwarenstein is expected to serve on DealerTrack's Audit Committee.
"We are very pleased to welcome Barry to the DealerTrack board of directors," said O'Neil. "Given the breadth of his experience with other rapidly growing public companies, and his background in M&A and the international arena, we are confident Barry will bring valuable perspective to the board's deliberations."
Zwarenstein, 59, joined VeriFone Holdings in June 2004 as senior vice president and chief financial officer and was subsequently promoted to executive vice president and chief financial officer.
Over the prior eight years, he served as chief financial officer of Iomega Corp., Mellanox Technologies Limited, Acuson Corp. and Logitech S.A.
Zwarenstein began his career at FMC Corp., where he held a variety of positions in finance, and at the time of his departure was chief financial officer for FMC Europe, officials indicated.
In addition, DealerTrack has announced that Thomas Gilman will resign from the board, effective Nov. 5. Gilman's move to an operating role at Cerberus makes it challenging for him to continue to fulfill his responsibilities on the DealerTrack board, executives explained.
"We would like to thank Tom for his contributions to the growth and development of DealerTrack over the course of this year," said O'Neil.
Gilman also added, "I would like to thank everyone at DealerTrack and especially the members of the board for their support and graciousness as I arrived at my decision. I wish you all the best of success in the future."
Because of similar circumstances, it is anticipated that director Thomas Gibson, a senior advisor to Cerberus, will resign from the DealerTrack board in the near future. To ensure a smooth transition, Gibson plans to remain a director for DealerTrack until a replacement has been designated, officials concluded.