Question-and-Answer Session
Operator
Thank you. (Operator instructions). We'll go first to Chris Mammone, Deutsche Bank.
Chris Mammone - Deutsche Bank
On the revenue guidance, is the change from the last time you reported, is it purely just factoring in the impact from the dealership closures or have you also given yourself a little bit more room for the environment getting worse or I just want to know a little bit better the flip and takes on that change.
Mark O'Neil
It’s substantially factoring in the impact of the closures. We don’t expect the industry to get worse, we expect it to run very similar that’s run in Q2. We also said Cash for Clunkers was seeing some good success. At the very end of July, the prognosticators are saying it’s going to pass the senate today or tomorrow. So August may tick up a bit, but what we don’t know is are we pulling a little bit demand out of the fourth quarter. So we’re trying to be realistic here that we don’t expect a major change in the macro economic environment.
So I think the second half similar to the second quarter is appropriate and we have factored in the numbers, the bankruptcy impact.
Eric Jacobs
There’s not just the dealership impact of the bankruptcy. We do have business, in particularly with GM that we expect to see some negative impact on because of the bankruptcy.
Chris Mammone – Deutsche Bank
Your comments on your adjusted EBITDA margin, 20% next year, do you expect at the beginning of 2010 or toward the end? What’s the timing?
Mark O'Neil
More color, we’ll give you after the third quarter earnings call or sometime in the latter part of the year.
Chris Mammone – Deutsche Bank
I guess we should interrupt the comments to think of sort of the year as a whole in approaching that level and not exiting next year at that level.
Mark O'Neil
That is not exactly what I said. Why don’t you interrupt it as we expect to be in the 20%-plus level, as Eric articulated. We’ll give you more detail on how it’ll throw it out for the year when we talk about the year.
Chris Mammone – Deutsche Bank
My final question on the subscription business. Are you noticing any change versus three months ago on willingness. Are dealers warming at all to willingness to spend on some of these services or is it still sort of status quo from earlier in the year?
- To read the full transcript on Seeking Alpha, click here »
