CARMEL, IN -- (Marketwired) -- 05/01/13 -- KAR Auction Services, Inc. (NYSE: KAR), today reported its first quarter financial results for the period ended March 31, 2013. For the first quarter of 2013, the company reported revenue of $557.6 million as compared with revenue of $506.9 million for the first quarter of 2012, an increase of 10%. Adjusted EBITDA for the quarter ended March 31, 2013 increased 1% to $136.2 million, as compared with Adjusted EBITDA of $134.9 million for the quarter ended March 31, 2012. Net income for the first quarter of 2013 increased 12% to $29.1 million, or $0.21 per diluted share, as compared with net income of $26.0 million, or $0.19 per diluted share, in the first quarter of 2012. Adjusted net income per share for the quarters ended March 31, 2013 and 2012 was $0.31. Adjusted net income for the first quarter 2013 excludes a $6.4 million net loss ($10.8 million pre-tax) due to costs incurred for processing vehicles damaged in Superstorm Sandy.
KAR's Board of Directors also announced a cash dividend today of $0.19 per share on the Company's common stock. The dividend is payable on July 3, 2013, to stockholders of record as of the close of business on June 24, 2013.
Impact of Superstorm Sandy
In the first quarter of 2013, IAA incurred a non-recurring pre-tax net loss of $10.8 million related to the processing of Superstorm Sandy vehicles. This net loss has been excluded from Adjusted EBITDA in accordance with the definitions in our Credit Agreement. These losses are net of auction services revenue realized or to be realized upon the sale of the vehicles. The significantly higher tow costs incurred in order to respond to the requirements of our customers, increased occupancy costs due to the leasing of temporary locations to process Superstorm Sandy vehicles and increased labor costs for the temporary work force brought into the New York and New Jersey area resulted in a net loss on the sale of the Superstorm Sandy vehicles. In addition, as a result of adverse weather conditions experienced in the United States and the volume of Sandy vehicles sold by IAA in the first quarter of 2013, the inventory of IAA's total loss vehicles has increased over 10% at March 31, 2013 compared to the prior year.
KAR Auction Services, Inc. continues to expect 2013 Adjusted EBITDA of $535 - $540 million. The company also expects net income per share of $0.82 - $0.87 and adjusted net income per share of $1.15 - $1.20, both assuming an effective tax rate of approximately 40%. 2013 adjusted net income per share represents GAAP net income per diluted share excluding excess depreciation and amortization and stock-based compensation, both resulting from the 2007 merger, as well as Superstorm Sandy costs, all net of taxes. Additionally, the company expects 2013 cash taxes of approximately $85 million, cash interest expense on corporate debt of approximately $78 million and capital expenditures of approximately $95 million. This would result in free cash flow before dividend payments of approximately $277 to $282 million.
Earnings Conference Call Information
KAR Auction Services, Inc. will be hosting an earnings conference call and webcast on Thursday, May 2, 2013 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 1-888-466-4414 and entering participant passcode 156725 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 2013 results is available at the investor relations section of www.karauctionservices.com under the financial postings page.
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