LAKE SUCCESS, N.Y. — Despite what it called moves by some of its financing source customers to curb credit origination volume, DealerTrack Holdings reported a strong upswing in revenue growth for the first quarter of 2008, the company stated.

According to officials, quarterly revenue climbed to $64.3 million, up from $51.7 million a year ago, a 24-percent spike. Net income, however, fell from $4.8 million to $2.3 million.

"Our 24 percent revenue growth over the first quarter of 2007 demonstrates DealerTrack's ability to generate strong revenue growth even in the face of macroeconomic headwinds," explained Mark O'Neil, chairman and chief executive officer of DealerTrack. "We have seen a shift in credit practices by many of our financing source customers. These customers have purposefully reduced the number of dealers they service in an effort to curtail their credit origination volume.

"This reduction in the number of loans that financing sources are willing to compete for has resulted in a decrease in transaction volume of up to 30 percent from these financing source customers," O'Neil continued. "Despite these factors, the strength of our model and the value of our offerings enabled us to continue to grow in both the transaction and subscription side of our business.

"In addition, we believe that our investments in 2008 in new products and services position us for strong growth in the future," he added.

Breaking it down further,  EBITDA was reported at $13.3 million for the first quarter, down from $14.6 million a year ago. According to officials, this includes $3.7 million in expenses "resulting from pending litigation and professional fees associated with an acquisition the company chose not to complete."

Cash net income, meanwhile, was $9.3 million, falling from $9.5 million in 2007.

"Our financial performance in the quarter was directly impacted by charges of $3.2 million relating to our outstanding patent litigation and $0.5 million associated with an acquisition that the company chose not to complete. Combined, these same expenses amounted to only $0.6 million in the first quarter of 2007," O'Neil explained. "The litigation charges are not expected to continue past the third quarter of this year."

The company also provided a revised guidance for its 2008 annual performance.

Officials project revenue for the year somewhere between $268 million and $272 million. Previous expectations were $270 million to $276 million for the year.

Meanwhile, the company forecasted net income to be between $21 million and $22.6 million. Earlier estimates were between $24.8 million and $26.2 million.

EBITDA is anticipated to come in between $67.3 million and $70 million, versus the previously estimated range of $71.2 million to $73.5 million.

The company expects cash net income to reach somewhere between $45.8 million and $47.4 million. Previously, it was anticipated to be in the $50.4 million to $51.8 million range.

According to the company, revisions in the 2008 guidance includes a expected reduction in interest income of $2.7 million (net of taxes), $0.3 million "for professional fees associated with an acquisition we chose to complete" and then another $0.3 million stemming from the increase to roughly 40 percent in the expected effective tax rate.

"Although a number of manufacturers still maintain a 2008 forecast of 15.5 million new-vehicle sales, our revised guidance is based upon the lending and sales environments we saw in the first four months of 2008. Additionally we see a reduction in interest income due to the current interest rate environment," O'Neil suggested.

"While we have not yet been able to repurchase stock during the past month due to legal restrictions, we remain committed to repurchasing stock in the open market and expect the $75 million stock repurchase program authorized by our board of directors to begin shortly," he concluded.