LAKE SUCCESS, N.Y. — Also prompting a raise in annual estimates, DealerTrack Holdings saw significant gains both in the second quarter and through the first six months of 2011 in net income, revenue and more.

Beginning with a look at second-quarter figures, the company calculated its revenue came in at $89.0 million as compared to $61.9 million for the second quarter of last year.

As a result, DealerTrack's second quarter net-income settled at $2.2 million, much different than the GAAP net loss of $0.1 million the company sustained during the same period a year ago.

Officials also noted net income per share for the quarter was 5 cents. In the second quarter of last year, the per-share reading was break even.

Staying in just the second quarter but moving over to non-GAAP results, DealerTrack again highlighted a litany of positive developments.

Second-quarter adjusted EBITDA was $21.3 million as compared to $9.8 million for the second quarter of 2010.
The company then said its second-quarter adjusted net income totaled $10.8 million, more than double what DealerTrack generated in the year-ago period, which was $5.3 million.

Furthermore, officials indicated their diluted adjusted net income per share was 25 cents for the quarter as compared to 13 cents for the second quarter of 2010. 

Six-Month Results

Moving along to a look at how the company performed during the six-month span that wrapped up June 30, DealerTrack again enjoyed positive year-over-year gains.

Revenue jumped from $118.7 million to $166.2 million.

The increase helped DealerTrack post quite a net income turnaround. During the first six months of this year, the company posted $26.9 million in net income. In the first half of 2010, the company suffered a $2.6-million net loss.

"Net income for 2011 has been positively impacted by a $23.5 million non-cash reduction in the valuation allowance against the company's net U.S. deferred tax assets," company officials explained.

On a per-share basis, the turnaround went from a loss of 6 cents per share a year ago to income of 64 cents per share this year.

"Diluted GAAP net income per share for 2011 was positively impacted by 56 cents per share for a non-cash reduction in the valuation allowance against the company's net U.S. deferred tax assets," DealerTrack reiterated.

As far as non-GAAP results for the first half of 2011, the company made advances in each segment:

—Adjusted EBITDA up to $34.2 million as compared to $14.7 million for the same period in 2010.

—Adjusted net income up to $18.3 million as compared to $7.3 million for the same period in 2010.

—Diluted adjusted net income per share for the six months was 43 cents as compared to 18 cents per share for the same period in 2010.

Guidance for 2011 Annual Performance

Courtesy of its strong performance during the first half of the year, DealerTrack raised revenue and both GAAP and non-GAAP earnings guidance for the full-year 2011.

The company first shared its expected GAAP results:

—Revenue for the year is expected to be between $336.0 million and $340.0 million, net of approximately $3.9 million of contra-revenue, compared to the previous estimate of between $324.0 million and $330.0 million, net of approximately $3.7 million of contra-revenue.

—GAAP net income for the year is expected to be between $24.5 million and $27.0 million, compared to the previous estimate of between $24.0 and $26.5 million. 

—Diluted GAAP net income per share for the year is expected to be between 57 cents and 63 cents, compared to the previous estimate of between 56 cents and 62 cents. 

DealerTrack revealed its expected non-GAAP results are:

—Adjusted EBITDA for the year is expected to be between $66.0 million and $70.0 million, compared to the previous estimate of between $62.0 million and $66.0 million.

—Adjusted net income for the year is expected to be between $34.5 million and $37.0 million, compared to the previous estimate of between $33.2 million and $35.7 million.

—Diluted adjusted net income per share for the year is expected to be between 81 cents and 86 cents compared to the previous estimate of between 78 cents and 83 cents.

DealerTrack emphasized diluted GAAP net income and adjusted net income per share guidance for the year are based on an assumed 42.8 million diluted weighted average shares outstanding.

Furthermore, the company stressed its guidance assumes that new-vehicle sales will be approximately 12.8 million units and used-vehicle sales will be approximately 13.8 million units for 2011.

Officials explained the assumptions for diluted weighted average shares outstanding and new-vehicle sales are unchanged from their prior estimates, and their assumption for used sales has been increased by 0.8 million.

DealerTrack also said its revised guidance implies an adjusted EBITDA margin of approximately 20 percent for the full year, up from approximately 19 percent. The company pointed out the 2011 adjusted EBITDA margin is negatively impacted by approximately 50 basis points as a result of the eCarList acquisition.

Top Executive Reacts to 2Q Report

After the second-quarter figures were revealed, DealerTrack chairman and chief executive officer Mark O'Neil stated, "We are very pleased with our results for the second quarter as our transaction businesses benefitted from the continued improvement in the credit environment.

"Our transaction results also reflect the strong performance of our recently acquired processing solutions business," O'Neil continued.

Looking forward, DealerTrack's top boss insisted that, "We believe that the subscription business will grow more rapidly in the future as our acquisition of eCarList will enable us to provide the most comprehensive inventory management solution in the industry."