DealerTrack Holdings Inc. (TRAK, Financial) filed Quarterly Report for the period ended 2011-09-30.
Dealertrack Holdings Inc. has a market cap of $940.9 million; its shares were traded at around $22.72 with a P/E ratio of 33.4 and P/S ratio of 3.9.
The net provision for income taxes for the three months ended September 30, 2011 of $1.5 million consisted primarily of $0.9 million of federal income tax expense, $0.1 million of state income tax expense and $0.5 million of tax expense for our Canadian subsidiary. The net provision for income taxes for the three months ended September 30, 2010 of $1.5 million consisted primarily of $0.1 million of federal income tax expense, $0.7 million of state income tax expense and $0.7 million of tax expense for our Canadian subsidiary. Included in our tax expense for our U.S. subsidiaries for the three months ended September 30, 2011 was an income tax benefit related to the favorable completion of the review of our amended Texas tax returns, income tax benefit related to the filing of our research and development credit, and an income tax benefit related to the completion of our 2010 U.S. tax return, which together resulted in a benefit to our tax rate of approximately 26.6%. Included in our tax expense for our Canadian subsidiary for the three months ended September 30, 2011, was an income tax benefit related to our Scientific Research and Experimental Development credit which resulted in a benefit to our tax rate of approximately 3.1%. Included in tax expense for our Canadian subsidiary for the three months ended September 30, 2010 is $0.3 million for a permanent item relating to intangible amortization. This amount had a 9.7% impact on the effective tax rate for the three months ended September 30, 2010. For the three months ended September 30, 2011, the permanent item relating to intangible amortization for our Canadian subsidiary did not have a significant impact on tax expense. Our effective tax rate for the three months ended September 30, 2011 is 21.8% compared with 56.2% for the three months ended September 30, 2010. 29 While we have been forecasting sufficient U.S. book taxable income in future periods, we are currently in a three-year cumulative pretax book loss position in the United States. As a result of cumulative U.S. book losses incurred in recent years and uncertainty as to the extent and timing of profitability in future periods, we recorded a full valuation allowance of $28.4 million against our net U.S. deferred tax assets, excluding deferred tax liabilities related to indefinite-lived assets, during the fourth quarter of 2010.
Cost of Revenue. Cost of revenue increased $48.9 million, or 50%, to $145.9 million for the nine months ended September 30, 2011 from $97.0 million for the nine months ended September 30, 2010. The $48.9 million increase was primarily the result of increases of $13.3 million in intangible amortization related to DealerTrack Processing Solutions, Automotive Information Center, and eCarList acquired intangibles, $8.5 million in costs related to DealerTrack Processing Solutions, which primarily includes transaction fees that are paid to third parties and temporary labor associated with processing transactions, $3.3 million in software amortization and depreciation charges, $2.8 million primarily related to temporary labor as a result of the growing volume of eDocs transactions, $2.8 million in technology expense, which includes hosting expenses, technology support and other consulting expenses, $2.3 million in occupancy and telecommunications costs primarily due to the acquisition of DealerTrack Processing Solutions, $1.0 million in increased maintenance and installation costs associated with our DMS solution, $0.7 million in costs related to eCarList, which primarily includes advertising expenses associated with their product offerings, and $0.6 million in increased costs associated with our Canadian operations as a result of expanding our product offerings in Canada. Additionally, there were increases of $2.6 million in bonus compensation and $15.7 million in salary compensation and related benefit costs primarily due to the acquisition of DealerTrack Processing Solutions, headcount additions, and an increase in payroll and other taxes. These increases were partially offset by a decrease in intangible amortization expense of $6.1 million primarily due to intangible assets becoming fully amortized during the nine months ended September 30, 2011.
Cost of Revenue. Cost of revenue increased $48.9 million, or 50%, to $145.9 million for the nine months ended September 30, 2011 from $97.0 million for the nine months ended September 30, 2010. The $48.9 million increase was primarily the result of increases of $13.3 million in intangible amortization related to DealerTrack Processing Solutions, Automotive Information Center, and eCarList acquired intangibles, $8.5 million in costs related to DealerTrack Processing Solutions, which primarily includes transaction fees that are paid to third parties and temporary labor associated with processing transactions, $3.3 million in software amortization and depreciation charges, $2.8 million primarily related to temporary labor as a result of the growing volume of eDocs transactions, $2.8 million in technology expense, which includes hosting expenses, technology support and other consulting expenses, $2.3 million in occupancy and telecommunications costs primarily due to the acquisition of DealerTrack Processing Solutions, $1.0 million in increased maintenance and installation costs associated with our DMS solution, $0.7 million in costs related to eCarList, which primarily includes advertising expenses associated with their product offerings, and $0.6 million in increased costs associated with our Canadian operations as a result of expanding our product offerings in Canada. Additionally, there were increases of $2.6 million in bonus compensation and $15.7 million in salary compensation and related benefit costs primarily due to the acquisition of DealerTrack Processing Solutions, headcount additions, and an increase in payroll and other taxes. These increases were partially offset by a decrease in intangible amortization expense of $6.1 million primarily due to intangible assets becoming fully amortized during the nine months ended September 30, 2011.
The benefit for income taxes for the nine months ended September 30, 2011 of $20.1 million consisted primarily of $22.3 million of federal income tax benefit, offset by $0.8 million of state income tax expense and $1.4 million of tax expense for our Canadian subsidiary. The net provision for income taxes for the nine months ended September 30, 2010 of $0.8 million consisted primarily of $2.4 million of federal income tax benefit, offset by $0.8 million of state income tax expense and $2.4 million of tax expense for our Canadian subsidiary. Included in our tax expense for our U.S. subsidiaries for the three months ended September 30, 2011 was an income tax benefit related to the favorable completion of the review of our amended Texas tax returns, income tax benefit related to the filing of our research and development credit, and an income tax benefit related to the completion of our 2010 U.S. tax return, which together resulted in a benefit to our tax rate of approximately 14.8%. Included in our tax expense for our Canadian subsidiary for the three months ended September 30, 2011, was an income tax benefit related to our Scientific Research and Experimental Development credit which resulted in a benefit to our tax rate of approximately 10.0%. Included in tax expense for our Canadian subsidiary for the nine months ended September 30, 2010 is $0.9 million for a permanent item relating to intangible amortization. This amount had a 155.0% impact on the effective tax rate for the nine months ended September 30, 2010. For the nine months ended September 30, 2011, the permanent item relating to intangible amortization for our Canadian subsidiary did not have a significant impact on tax expense. Our effective tax rate for the nine months ended September 30, 2011 is 163.2% compared with 136.5% for the nine months ended September 30, 2010. While we have been forecasting sufficient U.S. book taxable income in future periods, we are currently in a three-year cumulative pretax book loss position in the United States. As a result of cumulative U.S. book losses incurred in recent years and uncertainty as to the extent and timing of profitability in future periods, we recorded a full valuation allowance of $28.4 million against our net U.S. deferred tax assets, excluding deferred tax liabilities related to indefinite-lived assets, during the fourth quarter of 2010.
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Dealertrack Holdings Inc. has a market cap of $940.9 million; its shares were traded at around $22.72 with a P/E ratio of 33.4 and P/S ratio of 3.9.
Highlight of Business Operations:
Cost of Revenue. Cost of revenue increased $20.0 million, or 61%, to $52.8 million for the three months ended September 30, 2011 from $32.8 million for the three months ended September 30, 2010. The $20.0 million increase was primarily the result of increases of $5.4 million in intangible amortization related to DealerTrack Processing Solutions, Automotive Information Center, and eCarList acquired intangibles, $3.5 million in costs related to DealerTrack Processing Solutions, which primarily includes transaction fees that are paid to third parties and temporary labor associated with processing transactions, $1.2 million in increased technology expenses, which includes hosting expenses, technology support and other consulting expenses, $0.7 million in costs related to eCarList, which primarily includes advertising expenses associated with their product offerings, $0.9 million in software amortization and depreciation charges, $0.6 million primarily related to temporary labor as a result of the growing volume of eDocs transactions, $0.8 million in occupancy and telecommunications costs, $0.6 million in increased hardware costs on equipment sales, maintenance costs, and installation costs associated with our DMS solution, and $0.4 million in increased costs associated with our Canadian operations as a result of expanding our product offerings in Canada. Additionally, there were increases of $1.4 million in bonus compensation and $6.2 million in salary compensation and related benefit costs primarily due to the acquisition of DealerTrack Processing Solutions, headcount additions, and an increase in payroll and other taxes. These increases were partially offset by a decrease in intangible amortization expense of $2.5 million primarily due to intangible assets which became fully amortized during the three months ended September 30, 2011.The net provision for income taxes for the three months ended September 30, 2011 of $1.5 million consisted primarily of $0.9 million of federal income tax expense, $0.1 million of state income tax expense and $0.5 million of tax expense for our Canadian subsidiary. The net provision for income taxes for the three months ended September 30, 2010 of $1.5 million consisted primarily of $0.1 million of federal income tax expense, $0.7 million of state income tax expense and $0.7 million of tax expense for our Canadian subsidiary. Included in our tax expense for our U.S. subsidiaries for the three months ended September 30, 2011 was an income tax benefit related to the favorable completion of the review of our amended Texas tax returns, income tax benefit related to the filing of our research and development credit, and an income tax benefit related to the completion of our 2010 U.S. tax return, which together resulted in a benefit to our tax rate of approximately 26.6%. Included in our tax expense for our Canadian subsidiary for the three months ended September 30, 2011, was an income tax benefit related to our Scientific Research and Experimental Development credit which resulted in a benefit to our tax rate of approximately 3.1%. Included in tax expense for our Canadian subsidiary for the three months ended September 30, 2010 is $0.3 million for a permanent item relating to intangible amortization. This amount had a 9.7% impact on the effective tax rate for the three months ended September 30, 2010. For the three months ended September 30, 2011, the permanent item relating to intangible amortization for our Canadian subsidiary did not have a significant impact on tax expense. Our effective tax rate for the three months ended September 30, 2011 is 21.8% compared with 56.2% for the three months ended September 30, 2010. 29 While we have been forecasting sufficient U.S. book taxable income in future periods, we are currently in a three-year cumulative pretax book loss position in the United States. As a result of cumulative U.S. book losses incurred in recent years and uncertainty as to the extent and timing of profitability in future periods, we recorded a full valuation allowance of $28.4 million against our net U.S. deferred tax assets, excluding deferred tax liabilities related to indefinite-lived assets, during the fourth quarter of 2010.
Cost of Revenue. Cost of revenue increased $48.9 million, or 50%, to $145.9 million for the nine months ended September 30, 2011 from $97.0 million for the nine months ended September 30, 2010. The $48.9 million increase was primarily the result of increases of $13.3 million in intangible amortization related to DealerTrack Processing Solutions, Automotive Information Center, and eCarList acquired intangibles, $8.5 million in costs related to DealerTrack Processing Solutions, which primarily includes transaction fees that are paid to third parties and temporary labor associated with processing transactions, $3.3 million in software amortization and depreciation charges, $2.8 million primarily related to temporary labor as a result of the growing volume of eDocs transactions, $2.8 million in technology expense, which includes hosting expenses, technology support and other consulting expenses, $2.3 million in occupancy and telecommunications costs primarily due to the acquisition of DealerTrack Processing Solutions, $1.0 million in increased maintenance and installation costs associated with our DMS solution, $0.7 million in costs related to eCarList, which primarily includes advertising expenses associated with their product offerings, and $0.6 million in increased costs associated with our Canadian operations as a result of expanding our product offerings in Canada. Additionally, there were increases of $2.6 million in bonus compensation and $15.7 million in salary compensation and related benefit costs primarily due to the acquisition of DealerTrack Processing Solutions, headcount additions, and an increase in payroll and other taxes. These increases were partially offset by a decrease in intangible amortization expense of $6.1 million primarily due to intangible assets becoming fully amortized during the nine months ended September 30, 2011.
Cost of Revenue. Cost of revenue increased $48.9 million, or 50%, to $145.9 million for the nine months ended September 30, 2011 from $97.0 million for the nine months ended September 30, 2010. The $48.9 million increase was primarily the result of increases of $13.3 million in intangible amortization related to DealerTrack Processing Solutions, Automotive Information Center, and eCarList acquired intangibles, $8.5 million in costs related to DealerTrack Processing Solutions, which primarily includes transaction fees that are paid to third parties and temporary labor associated with processing transactions, $3.3 million in software amortization and depreciation charges, $2.8 million primarily related to temporary labor as a result of the growing volume of eDocs transactions, $2.8 million in technology expense, which includes hosting expenses, technology support and other consulting expenses, $2.3 million in occupancy and telecommunications costs primarily due to the acquisition of DealerTrack Processing Solutions, $1.0 million in increased maintenance and installation costs associated with our DMS solution, $0.7 million in costs related to eCarList, which primarily includes advertising expenses associated with their product offerings, and $0.6 million in increased costs associated with our Canadian operations as a result of expanding our product offerings in Canada. Additionally, there were increases of $2.6 million in bonus compensation and $15.7 million in salary compensation and related benefit costs primarily due to the acquisition of DealerTrack Processing Solutions, headcount additions, and an increase in payroll and other taxes. These increases were partially offset by a decrease in intangible amortization expense of $6.1 million primarily due to intangible assets becoming fully amortized during the nine months ended September 30, 2011.
The benefit for income taxes for the nine months ended September 30, 2011 of $20.1 million consisted primarily of $22.3 million of federal income tax benefit, offset by $0.8 million of state income tax expense and $1.4 million of tax expense for our Canadian subsidiary. The net provision for income taxes for the nine months ended September 30, 2010 of $0.8 million consisted primarily of $2.4 million of federal income tax benefit, offset by $0.8 million of state income tax expense and $2.4 million of tax expense for our Canadian subsidiary. Included in our tax expense for our U.S. subsidiaries for the three months ended September 30, 2011 was an income tax benefit related to the favorable completion of the review of our amended Texas tax returns, income tax benefit related to the filing of our research and development credit, and an income tax benefit related to the completion of our 2010 U.S. tax return, which together resulted in a benefit to our tax rate of approximately 14.8%. Included in our tax expense for our Canadian subsidiary for the three months ended September 30, 2011, was an income tax benefit related to our Scientific Research and Experimental Development credit which resulted in a benefit to our tax rate of approximately 10.0%. Included in tax expense for our Canadian subsidiary for the nine months ended September 30, 2010 is $0.9 million for a permanent item relating to intangible amortization. This amount had a 155.0% impact on the effective tax rate for the nine months ended September 30, 2010. For the nine months ended September 30, 2011, the permanent item relating to intangible amortization for our Canadian subsidiary did not have a significant impact on tax expense. Our effective tax rate for the nine months ended September 30, 2011 is 163.2% compared with 136.5% for the nine months ended September 30, 2010. While we have been forecasting sufficient U.S. book taxable income in future periods, we are currently in a three-year cumulative pretax book loss position in the United States. As a result of cumulative U.S. book losses incurred in recent years and uncertainty as to the extent and timing of profitability in future periods, we recorded a full valuation allowance of $28.4 million against our net U.S. deferred tax assets, excluding deferred tax liabilities related to indefinite-lived assets, during the fourth quarter of 2010.
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