LAKE SUCCESS, N.Y. — Though it still recorded a net loss, DealerTrack showed year-over-year improvements in its third-quarter financial results, and the company's leadership says it is pleased with the performance and the progress DealerTrack has made.

Specifically, the company recorded a net loss of $200,000, compared with a net loss of $2.6 million a year ago. Meanwhile, quarterly revenue totaled $58.8 million, a decrease of $1.7 million year-over-year.

Officials explained that the third quarter (and year-to-date) results were downwardly impacted by an $800,000 (net of taxes) contingent earn out compensation expense involving the company's 2007 acquisition of AutoStyleMart.

"We are pleased with our results for the quarter, which we believe clearly illustrate the operating leverage in our business," commented Mark O'Neil, chairman and chief executive officer of DealerTrack.

"For the third quarter, we posted an adjusted EBITDA margin of 18 percent, our highest level in the past 12 months as we benefited from increased volumes from the Cash for Clunkers program," he added.

Looking at year-to-date results, net loss has reached $3.7 million, versus a net income of $2.8 million for the same period in 2008.

Revenue through the first nine months of the year totaled $172.4 million, down from $188 million through the end of September 2008. 

Also, the year-to-date results (both GAAP net loss and cash net income) were favorably impacted by an approximately $1.1 million tax benefit as a result of filing several amended prior year state tax returns. However, they were also negatively impacted by an approximately $4.5 million (net of taxes) restructuring charge, of which $2.6 million (net of taxes) was a non-cash expense.

Additionally, during the first nine months of 2008, the net income includes a realized loss of $5.7 million (non-taxable) related to the impairment of certain auction rate securities.

Looking forward to the rest of 2009, DealerTrack noted that its third-quarter performance, Cash for Clunkers and an acquisition related earn-out payment have caused updated projections for full-year totals:

Expected GAAP Results

—Revenue for the year is expected to be between $227 million and $229 million, compared with the previous guidance of $228 million to $232 million.

—Net loss for the year is expected to be between $4.9 million and $3.4 million, compared with the previous estimate of $4.3 million to $2.8 million.

Expected non-GAAP Results

—Adjusted EBITDA for the year is expected to be between $33 million and $35 million, compared to the previous estimate of $32 million to $34 million.

—Cash net income for the year is expected to be between $19.9 million and $21.4 million, compared to the previous estimate of $17.9 million to $19.4 million.

Moreover, the revised guidance assumed that for 2009 new-car sales will be 10.5 million units and used-car sales will be 12.5 million units, including an expected impact of the Chrysler and GM bankruptcies, related franchise terminations and Saturn closure.

"Despite the near-term headwinds associated with the 'hangover' effect from the Cash for Clunkers program and additional dealership closures, we are constructive on the long-term outlook for our business," O'Neill added. "We are seeing signs of modest improvement in both new car sales and credit.

"We believe DealerTrack is extremely well positioned to benefit from a pickup in auto sales, as well as continued growth in our subscription business," he continued. "Given our performance in the third quarter and our continued focus on cost controls, we are raising our non-GAAP earnings guidance for the year and remain confident with our ability to generate strong cash flows."