For Immediate Release
KAR Auction Services, Inc. Reports First Quarter 2014 Results
Board Announces Quarterly Dividend of $0.25 per Common Share
Carmel, IN, May 5, 2014 — KAR Auction Services, Inc. (NYSE: KAR), today reported its first quarter financial results for the period ended March 31, 2014. For the first quarter of 2014, the company reported revenue of $583.8 million as compared with revenue of $557.6 million for the first quarter of 2013, an increase of 5%. Adjusted EBITDA for the quarter ended March 31, 2014 increased 8% to $147.1 million, as compared with Adjusted EBITDA of $136.2 million for the quarter ended March 31, 2013. As a result of the refinancing activities in the first quarter of 2014, net income decreased 29% to $20.7 million, or $0.15 per diluted share, as compared with net income of $29.1 million, or $0.21 per diluted share, in the first quarter of 2013. Adjusted net income per diluted share for the quarter ended March 31, 2014 increased 32% to $0.41 versus adjusted net income per diluted share of $0.31 for the quarter ended March 31, 2013.
The company also announced a cash dividend today of $0.25 per share on the company’s common stock. The dividend is payable on July 3, 2014, to stockholders of record as of the close of business on June 25, 2014.
KAR Auction Services, Inc. has updated its guidance to reflect the recent refinancing of its credit agreement. The company expects 2014 Adjusted EBITDA of $580 – $600 million. The company also expects net income per share of $0.95 – $1.05 and adjusted net income per share of $1.35 – $1.45. The company expects its 2014 effective tax rate to be approximately 40%. Adjusted net income per share for 2014 represents GAAP net income per diluted share excluding excess depreciation and amortization and stock-based compensation, both resulting from the 2007 merger, and the loss on extinguishment of debt, all net of taxes. Additionally, the company expects 2014 cash taxes of approximately $105 – $115 million, cash interest on corporate debt of approximately $61 million and capital expenditures of approximately $105 million. This would result in free cash flow before dividend payments of approximately $309 to $319 million or $2.17 – $2.24 per share.
Earnings Conference Call Information
KAR Auction Services, Inc. will be hosting an earnings conference call and webcast on Tuesday, May 6, 2014 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, Jim Hallett, and Executive Vice President and Chief Financial Officer, Eric Loughmiller. The conference call may be accessed by calling 1-800-245-1683 and entering participant passcode 700530 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 2014 results is available at the investor relations section of www.karauctionservices.com under the financial postings 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 pass code 6730956. 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) is the holding company for ADESA, Inc. (“ADESA”), Insurance Auto Auctions, Inc. (“IAA”) and Automotive Finance Corporation (“AFC”). ADESA is a leading provider of wholesale used vehicle auctions with 65 North American locations and its subsidiary OPENLANE provides a leading Internet automotive auction platform. Insurance Auto Auctions is a leading salvage vehicle auction company with 165 sites across the United States and Canada. Automotive Finance Corporation is a leading provider of floorplan financing o independent and franchise used vehicle dealers with 105 sites across the United States and Canada. Together, KAR Auction Services provides a unique, comprehensive, end-to-end solution for our customers’ remarketing needs. Visit karauctionservices.com for additional information.
To view the entire release, including the condensed consolidated statements of income and balance sheets, click here.