Dealertrack Technologies, Inc. (NASDAQ: TRAK) today reported financial results for the fourth quarter and year ended December 31, 2013.

GAAP Results for the Fourth Quarter 2013

• Revenue for the quarter was $126.1 million, as compared to $101.8 million for 2012.
• GAAP net loss for the quarter was $(3.7) million, as compared to GAAP net income of $0.5 million for 2012.
• Diluted GAAP net loss per share for the quarter was $(0.08), as compared to diluted GAAP net income per share of $0.01 for 2012.

Non-GAAP Results for the Fourth Quarter 2013

• Adjusted EBITDA for the quarter was $28.1 million, as compared to $25.8 million for 2012.
• Adjusted net income for the quarter was $12.4 million, as compared to $13.7 million for 2012.
• Diluted adjusted net income per share for the quarter was $0.27, as compared to $0.31 for 2012.

GAAP Results for the Year Ended December 31, 2013

• Revenue for the year was $481.5 million, as compared to $388.9 million for 2012.
• GAAP net income for the year was $5.9 million, as compared to $20.5 million for 2012.
• Diluted GAAP net income per share for the year was $0.13, as compared to $0.46 for 2012.

GAAP net income for the year ended December 31, 2012 included a $15.9 million, or $0.36 per share, gain (net of taxes) for the contribution of the net assets of Chrome to the Chrome Data Solutions joint venture; a $3.4 million, or $0.08 per share, gain (net of taxes) from the sale of certain Chrome branded assets that were not contributed to the Chrome Data Solutions joint venture; and a $3.9 million, or $0.09 per share, non-cash charge (net of taxes) from a fair value adjustment to a warrant.

Non-GAAP Results for the Year Ended December 31, 2013

• Adjusted EBITDA for the year was $117.7 million, as compared to $97.3 million for 2012.
• Adjusted net income for the year was $59.1 million, as compared to $49.1 million for 2012.
• Diluted adjusted net income per share for the year was $1.30, as compared to $1.12 for 2012.

Mark F. O’Neil, chairman and chief executive officer of Dealertrack Technologies, commented, “We are pleased to report a strong fourth quarter and finish to 2013. We experienced solid execution from both our subscription and transaction businesses, with record quarterly revenue of $126.1 million, up 24% in total from a year ago. The combination of momentum in our business and positive industry trends allowed us to consistently deliver strong results throughout the year and end 2013 with revenue of $481.5 million, up 24% from 2012. We achieved a number of successes in 2013, including developing our Dealertrack 2.0 initiative, expanding our DMS installation capacity, shifting our sales organization to an account management structure and broadening our array of subscription and transaction products. We look forward to the closing of our pending acquisition of Dealer.com, which will expand our overall market opportunity and mark a significant milestone toward realizing our vision of transforming auto retailing with an integrated suite of innovative products. Our successes and recent acquisitions provide us with a firm foundation as we head into 2014 and give us confidence in our ability to deliver accelerated growth this year as we execute on our strategy.”

Guidance for 2014

Dealertrack’s guidance for 2014, which includes the impact of the pending acquisition of Dealer.com, assuming a March 1, 2014 closing date, is as follows:

Expected GAAP Results

• Revenue for the year is expected to be between $800.0 million and $816.0 million, an increase of 66% to 69% from 2013.
• GAAP net loss for the year is expected to be between $(7.0) million and $(13.0) million.
• Diluted GAAP net loss per share for the year is expected to be between $(0.24) and $(0.13).

Expected Non-GAAP Results

• Adjusted EBITDA for the year is expected to be between $180.0 million and $188.0 million.
• Adjusted net income for the year is expected to be between $78.0 million and $84.0 million.
• Diluted adjusted net income per share for the year is expected to be between $1.42 and $1.53.

Diluted GAAP net loss and adjusted net income per share guidance for the year is based on an estimated 55.0 million diluted weighted average shares outstanding, reflecting the expected issuance of an additional approximately 8.7 million shares of common stock in connection with the closing of the Dealer.com transaction. The guidance assumes that in 2014 new car sales by franchised dealers will total approximately 16.2 million units and used car sales by franchised dealers will total approximately 15.9 million units.

Conference Call

Dealertrack will host a conference call to discuss its fourth quarter and full year 2013 results, as well as its 2014 guidance, on February 19, 2014 at 5:00 p.m. Eastern Time. The conference call will be webcast live on the Internet at ir.dealertrack.com. In addition, a live audio of the call will be accessible to the public by calling 877-303-6648 begin_of_the_skype_highlighting 877-303-6648 FREE end_of_the_skype_highlighting (domestic) or 970-315-0443 begin_of_the_skype_highlighting 970-315-0443 FREE end_of_the_skype_highlighting (international); no access code is necessary. Callers should dial in approximately 10 minutes before the call begins. A replay will be available on the Dealertrack Technologies, Inc. website until March 5, 2014.

Non-GAAP Financial Measures

The non-GAAP measures of adjusted EBITDA and adjusted net income disclosures are not presented in accordance with generally accepted accounting principles (GAAP) and are not intended to be used in lieu of GAAP presentations of net income (loss). Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income (loss) excluding interest, taxes, depreciation and amortization expenses, stock-based compensation, contra-revenue and certain items, as applicable, such as: impairment charges, restructuring charges, impact of acquisition-related activity (including contingent consideration changes, compensation expense, basis difference amortization, and professional service fees), realized gains on sales of previously impaired securities, gains or losses on sales or disposals of subsidiaries and other assets, rebranding expense and certain other items that we do not believe are indicative of our ongoing operating results.

Adjusted net income is a non-GAAP financial measure that represents GAAP net income (loss) excluding stock-based compensation expense, the amortization of acquired identifiable intangibles, contra-revenue, and certain items, as applicable, such as: impairment charges, restructuring charges, impact of acquisition-related activity (including contingent consideration changes, compensation expense, basis difference amortization, and professional service fees), realized gains on sales of previously impaired securities, gains or losses on sales or disposals of subsidiaries and other assets, adjustments to deferred tax asset valuation allowances, non-cash interest expense, rebranding expense and certain other items that we do not believe are indicative of our ongoing operating results. These adjustments to net income (loss), which are shown before taxes, are adjusted for their tax impact at their applicable statutory rates.

Adjusted EBITDA and adjusted net income are presented because management believes that they provide additional information with respect to the performance of our fundamental business activities and are also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. Adjusted EBITDA and adjusted net income are also presented because the acquisition method of accounting can have a negative impact on our GAAP results because the depreciation and amortization expenses associated with acquired assets, in particular intangibles which tend to have a relatively short useful life, can be substantial in the first several years following an acquisition. As a result, we monitor our adjusted EBITDA and adjusted net income and other business statistics as a measure of operating performance in addition to net income and the other measures included in our consolidated financial statements. Management believes the adjusted EBITDA and adjusted net income information is useful to investors for these reasons. Adjusted EBITDA and adjusted net income are non-GAAP financial measures and should not be viewed as an alternative to GAAP measures of performance. Management believes the most directly comparable GAAP financial measure for adjusted EBITDA and adjusted net income is GAAP net income (loss) and has provided a reconciliation of adjusted EBITDA to GAAP net income (loss) and adjusted net income to GAAP net income (loss) in this press release.

About Dealertrack Technologies (www.dealertrack.com)

Dealertrack Technologies’ intuitive and high-value web-based software solutions and services enhance efficiency and profitability for all major segments of the automotive retail industry, including dealers, lenders, OEMs, third-party retailers, aftermarket providers and other service providers. In addition to the industry’s largest online credit application network, connecting more than 20,000 dealers with more than 1,400 lenders, Dealertrack Technologies delivers the industry’s most comprehensive solution set for automotive retailers, including Dealer Management System (DMS), Inventory, Sales and F&I, Interactive, and Registration and Titling solutions. For more information visit www.dealertrack.com.