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First Quarter Earnings Conference

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Presentation on theme: "First Quarter Earnings Conference"— Presentation transcript:

1 First Quarter Earnings Conference
January 22, 2003

2 Safe Harbor Statement Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of The forward-looking statements are based on current expectations, estimates, forecasts and projections of future company or industry performance based on management's judgment, beliefs, current trends and market conditions. Forward-looking statements made or to be made by or on behalf of the company may be identified by the use of words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied in the forward-looking statements. See also the discussion of factors that may affect future results contained in the company's Current Report on Form 8-K filed with the SEC on August 11, 2000, which we incorporate herein by reference. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

3 EPS increased 14% with continued strong operating margins
Q1 Highlights EPS increased 14% with continued strong operating margins Revenues increased 3% with mix of business slightly different than expected Acquired Networkcar, industry’s most advanced telematics solution, adding to growing arsenal of CRM solutions Today’s acquisition of MSN Autos Dealerpoint extends REY’s leadership in CRM services Customer reception of the Reynolds Generations Series and new value-added services continued to be positive Created New Markets Group to enter adjacent markets

4 Flat IT spending pattern lasting longer than expected
Market Update Flat IT spending pattern lasting longer than expected Franchised automobile retailers remain a strong market Automotive retailer optimism remains high, driven in large part by diverse mix of profit centers Car company initiatives adding increased value and require a retailing solutions partner to implement Interest in customer retention solutions and services continues to grow

5 The Networkcar CAReader™
Car Owner Benefits Networkcar Transmits car performance and location information over existing wireless infrastructure Installs easily under a car’s dashboard LoJack OnStar Alarm EMERGENCY Smart Roadside Assistance Emergency Assistance Remote Door Unlock SERVICE Real-time Performance Monitoring Real-time Problem Alerts Alerts of Service Milestones On-line Service Appointment Scheduling Remote Auto Technician Assistance Personal Website with Service Records and Recalls Concierge Assistance EMISSION Early Detection of Emission Problems Remote Emissions Monitoring and Certification THEFT Possible Theft Prevention Stolen Vehicle Recovery Cost $$ $$ $$$$ $ Opportunities

6 Adds entry-level lead management solution to CRM portfolio
MSN Autos Dealerpoint Adds entry-level lead management solution to CRM portfolio Currently used by over 4,000 retailers Creates opportunity to migrate to full Contact Management solution Provides meaningful touchpoint with car companies Extends REY’s automotive CRM leadership position

7 The Reynolds Generations Series Progress
Automark Web Services Added 138 dealerships in the quarter dealerships now utilize the service. Significant enhancements to be announced at NADA convention Value proposition and ROI continue to strengthen Customer Management 69 dealerships now utilizing application MSN Autos Dealerpoint expands REY’s customer base

8 Adjacent Markets Status
Market Size Wins Independent Pre-Owned Vehicles 55,000 retail points $109B ADESA Enterprise Rental Car Price 1 Thrifty Car Sales Hertz Car Sales Sports and Recreation Vehicles 22,000 $60B Harley Davidson Brunswick Mastercraft MarineMax Rick Case Commercial Equipment 2,450 $85B Karmak Vehicle Care & Aftermarket Parts Shops 100,000 $150B+ Collision-Repair Shops 53,000 $30B Opportunities

9 * Excludes accounting change last year
Q1 Summary $ in millions Revenues +3% EPS +14% $0.40 $247 $240 $0.35* 2002 2003 2002 2003 * Excludes accounting change last year

10 Q1 Revenue Summary by Segment
$ in millions

11 * Excludes accounting change last year
Q1 Income Summary $ in millions * Excludes accounting change last year

12 Q1 R&D $ in millions

13 Q1 Margin Summary

14 Cash Flow Summary $ in millions

15 Share Repurchase Summary

16 Software Solutions Backlog
$ in millions

17 Financial Outlook EPS to be approximately $1.70 Q2 EPS to be approximately $0.40 Operating margins to be approximately 19% Return on equity to exceed 20% CapEx and capitalized software to total approximately $35M Depreciation and amortization to total approximately $40M R&D expenses are expected to be approximately $70M Share repurchases expected to continue Fully diluted shares used to calculate EPS to be approximately 71M


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