KAR Auction Profit Grows
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowCarmel-based KAR Auction Services Inc. (NYSE: KAR) is reporting first quarter net income of $54.5 million, compared to $20.7 million during the same period the previous year. The company also says revenue increased nearly 10 percent.
May 5, 2015
News Release
Carmel, Ind. — KAR Auction Services, Inc. (NYSE: KAR) today reported its first quarter financial results for the period ended March 31, 2015. For the first quarter of 2015, the company reported revenue of $632.4 million as compared with revenue of $583.8 million for the first quarter of 2014, an increase of 8%. Adjusted EBITDA for the quarter ended March 31, 2015 increased 10% to $162.2 million, as compared with Adjusted EBITDA of $147.1 million for the quarter ended March 31, 2014.
Net income for the first quarter of 2015 increased 163% to $54.5 million, or $0.38 per diluted share, as compared with net income of $20.7 million, or $0.15 per diluted share, in the first quarter of 2014. Net income for the first quarter of 2014 was negatively impacted by $20.6 million ($0.15 per diluted share) resulting from the company's refinancing activities. Adjusted net income per diluted share for the quarter ended March 31, 2015 increased 2% to $0.42 versus adjusted net income per diluted share of $0.41 for the quarter ended March 31, 2014.
The company also announced a cash dividend today of $0.27 per share on the company's common stock. The dividend is payable on July 2, 2015, to stockholders of record as of the close of business on June 24, 2015.
2015 Outlook
The company continues to expect 2015 Adjusted EBITDA of $630 million – $660 million. The company also expects net income per share of $1.40 – $1.55 and adjusted net income per share of $1.60 – $1.75, assuming a 2015 effective tax rate of approximately 38%. Adjusted net income per share for 2015 represents GAAP net income per diluted share excluding excess depreciation and amortization resulting from the 2007 merger, net of taxes. Additionally, the company expects 2015 cash taxes of approximately $130 million – $135 million, cash interest on corporate debt of approximately $60 million and capital expenditures of approximately $115 million.
This would result in free cash flow before dividend payments of approximately $325 million – $350 million or $2.27 – $2.45 per share. Capital expenditures, free cash flow before dividend payments and free cash flow per share exclude capital expenditures for the recently announced greenfield development of the ADESA Chicago auction facility. The Company expects the cost of this greenfield development to be approximately $30 million to $35 million over the next two years.
Earnings Conference Call Information
KAR Auction Services, Inc. will be hosting an earnings conference call and webcast on Wednesday, May 6, 2015 at 11:00 a.m. EDT (10:00 a.m. CDT). The call will be hosted by KAR Auction Services, Inc.'s Chief Executive Officer and Chairman of the Board, Jim Hallett, and Executive Vice President and Chief Financial Officer, Eric Loughmiller.
The conference call may be accessed by calling 1-888-205-6458 and entering participant passcode 3259980 while the live web cast will be available at the investor relations section of www.karauctionservices.com. Supplemental financial information for KAR Auction Services' first quarter 2015 results is available at the investor relations section of www.karauctionservices.com under the quarterly results page.
A replay of the call will be available for two weeks via telephone starting approximately 30 minutes after the completion of the call. The replay may be accessed by calling 1-888-203-1112 and entering passcode 3259980. The archive of the web cast will also be available following the call and will be available at the investor relations section of www.karauctionservices.com for a limited time.
About KAR Auction Services, Inc.
KAR Auction Services, Inc. (NYSE: KAR), a FORTUNE 1000 company, operates used vehicle auction services for North American sellers and buyers worldwide. Based in Carmel, Ind., the KAR group of companies is comprised of ADESA, Inc. (ADESA), Insurance Auto Auctions, Inc. (IAA), Automotive Finance Corporation (AFC), and additional business units, with over 12,000 employees across the globe.
ADESA operates 66 wholesale used vehicle auctions and IAA has 169 salvage vehicle auctions. Both companies offer leading online auction platforms to provide greater access for customers. AFC provides inventory financing and comprehensive business services primarily to independent used vehicle dealers from its 112 locations. Together, KAR's complementary businesses provide support, technology and logistics for the used vehicle industry. For more information, visit karauctionservices.com.
Source: KAR Auction Services Inc.