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ADESA Inc. Reports Operating Results (10-Q)

May 08, 2012 | About:
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10qk

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ADESA

Inc. (KAR) filed Quarterly Report for the period ended 2012-03-31.

Kar Auction Svc has a market cap of $2.5 billion; its shares were traded at around $16.81 with a P/E ratio of 19.1 and P/S ratio of 1.3.
This is the annual revenues and earnings per share of KAR over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of KAR.


Highlight of Business Operations:

We had an effective tax rate of 41.4% for the three months ended March 31, 2012, compared with 2.5% for the three months ended March 31, 2011. During the three months ended March 31, 2011, our effective tax rate of 2.5% benefited from the reversal of $14.4 million in reserves for uncertain tax positions due to the expiration of certain statute of limitations. Excluding the effect of the discrete items in the first quarter of 2011, our effective tax rate for the three months ended March 31, 2011 would have been 37.9%. Income before income taxes includes the impact of $5.2 million in profit interest expense for the three months ended March 31, 2012, which is not deductible for income tax purposes.

Revenue from ADESA increased $2.3 million, or 1%, to $270.6 million for the three months ended March 31, 2012, compared with $268.3 million for the three months ended March 31, 2011. The increase in revenue was primarily a result of a 9% increase in the number of vehicles sold, partially offset by a 7% decrease in revenue per vehicle sold to approximately $540 for the three months ended March 31, 2012, compared to over $580 for the three months ended March 31, 2011.

The total number of used vehicles sold at ADESA increased 9% for the three months ended March 31, 2012, compared with the three months ended March 31, 2011, and resulted in an increase in ADESA revenue of approximately $6.7 million. Excluding OPENLANE, the total number of used vehicles sold at ADESA decreased 6% for the three months ended March 31, 2012, compared with the three months ended March 31, 2011. The decrease in same store volume sold was attributable to a decline in supplier inventory levels, partially offset by a 14% (excluding OPENLANE) increase in dealer consignment units sold in the first quarter of 2012 compared with the first quarter of 2011. We expect that the total number of used vehicles sold industry-wide and at ADESA will be softer in the second quarter of 2012 as compared with the first quarter of 2012. Online sales volume for ADESA in the first quarter of 2012 represented approximately 32% of the total vehicles sold by ADESA, which, in part, reflects the OPENLANE acquisition, compared with approximately 24% in the first quarter of 2011.

For the three months ended March 31, 2012, gross profit for ADESA increased $9.3 million, or 8%, to $122.6 million, compared with $113.3 million for the three months ended March 31, 2011. Gross profit for ADESA was 45.3% of revenue for the three months ended March 31, 2012, compared with 42.2% of revenue for the three months ended March 31, 2011. The increase in gross profit as a percentage of revenue for the three months ended March 31, 2012, compared with the three months ended March 31, 2011 was primarily the result of the 9% increase in the number of vehicles sold and a 5% decrease in cost of services. The decrease in cost of services was attributable to decreases in ancillary and related services as well as favorable weather.

For the three months ended March 31, 2012, AFC revenue increased $6.4 million, or 16%, to $46.9 million, compared with $40.5 million for the three months ended March 31, 2011. The increase in revenue was the result of a 17% increase in loan transactions to 318,859 for the three months ended March 31, 2012, compared with the same period in 2011, partially offset by a 1% decrease in revenue per loan transaction for the three months ended March 31, 2012. In addition, managed receivables increased to $867.6 million at March 31, 2012 from $746.8 million at March 31, 2011.

Read the The complete Report

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