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January 22, 2003 First Quarter Earnings Conference.

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Presentation on theme: "January 22, 2003 First Quarter Earnings Conference."— Presentation transcript:

1 January 22, 2003 First Quarter Earnings Conference

2 Safe Harbor Statement Certain statements in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 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 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 Smart Roadside Assistance Remote Door Unlock Real-time Performance Monitoring Transmits car performance and location information over existing wireless infrastructure Installs easily under a car’s dashboard Emergency Assistance $$$$$$$ Cost Networkcar LoJack OnStar Alarm Car Owner Benefits Opportunities Real-time E-mail Problem Alerts E-mail Alerts of Service Milestones On-line Service Appointment Scheduling Remote Auto Technician Assistance Personal Website with Service Records and Recalls Early Detection of Emission Problems Possible Theft Prevention Stolen Vehicle Recovery Concierge Assistance Remote Emissions Monitoring and Certification EMERGENCY SERVICE EMISSION THEFT The Networkcar CAReader™

6 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  Automark Web Services  Added 138 dealerships in the quarter. 1945 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  Value proposition and ROI continue to strengthen The Reynolds Generations Series Progress

8 MarketsMarket SizeWins 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 Equipment2,450 $85B Karmak Vehicle Care & Aftermarket Parts Shops 100,000 $150B+ Collision-Repair Shops53,000 $30B Opportunities Adjacent Markets Status

9 Q1 Summary Revenues +3%EPS +14% $ in millions $240 $247 $0.35* $0.40 2002200320022003 * Excludes accounting change last year

10 Q1 Revenue Summary by Segment $ in millions

11 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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