For Immediate Release
KAR Auction Services, Inc. Reports Second Quarter 2014 Results
Board Announces Quarterly Dividend of $0.25 per Common Share
Carmel, Ind. – KAR Auction Services, Inc. (NYSE: KAR) today reported its second quarter financial results for the three months ended June 30, 2014. For the second quarter of 2014, the company reported revenue of $585.6 million as compared with revenue of $541.4 million for the second quarter of 2013, an increase of 8%. Adjusted EBITDA for the quarter ended June 30, 2014, increased 10% to $154.1 million, as compared with Adjusted EBITDA of $140.2 million for the quarter ended June 30, 2013. Net income for the second quarter of 2014 increased 52% to $50.8 million, or $0.36 per diluted share, as compared with net income of $33.4 million, or $0.24 per diluted share, in the second quarter of 2013. Adjusted net income per diluted share for the quarter ended June 30, 2014, increased 24% to $0.42 versus adjusted net income per diluted share of $0.34 for the quarter ended June 30, 2013.
For the six months ended June 30, 2014, the company reported revenue of $1,169.4 million as compared with revenue of $1,099.0 million for the six months ended June 30, 2013, an increase of 6%. Adjusted EBITDA for the six months ended June 30, 2014, increased 9% to $301.2 million, as compared with Adjusted EBITDA of $276.4 million for the six months ended June 30, 2013. Net income increased 14% to $71.5 million, or $0.51 per diluted share, as compared with net income of $62.5 million, or $0.45 per diluted share in the first six months of 2013. Adjusted net income per diluted share for the six months ended June 30, 2014, increased 28% to $0.83 versus adjusted net income per diluted share of $0.65 for the six months ended June 30, 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 October 2, 2014, to stockholders of record as of the close of business on September 24, 2014.
The company continues to expect 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, assuming an effective tax rate of 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 Wednesday, August 6, 2014, at 11 a.m. EDT (10 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 1-888-554-1419 and entering participant passcode 563483 while the live web cast will be available at the investor relations section of www.karauctionservices.com. Supplemental financial information for KAR Auction Services’ second 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 2000966. 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 nearly 12,000 employees across the globe.
ADESA operates 65 wholesale used vehicle auctions and IAA has 166 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 107 locations. Together, KAR’s complementary businesses provide support, technology and logistics for the used vehicle industry. For more information, visit karauctionservices.com.
Forward Looking Statements
Certain statements contained in this release include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made that are not historical facts may be forward-looking statements. Words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar expressions identify forward-looking statements. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include those matters disclosed in the Company’s Securities and Exchange Commission filings. The Company does not undertake any obligation to update any forward-looking statements.
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