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Adesa parent turns profit, beats expectations

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Carmel-based KAR Auction Services Inc. on Friday reported a profit of $5.3 million in the quarter ended Dec. 31, opposed to a loss of $49.3 million during the same period in 2008.

The profit translated to 5 cents per share, compared to a loss of 46 cents per share in the same period a year earlier.

Earnings before interest, taxes, depreciation and amortization increased 73 percent to $99.7 million, or 15 cents per share. That beat analysts’ expectations by 1 cent.

Jim Hallett, CEO of the holding company for Adesa Auction Services, the nation’s second-largest used-vehicle auction chain, attributed the turnaround to several factors.

“In addition to our solid operating results, during 2009, we completed KAR’s initial public offering, paid down $250 million of term loan debt, added two new facilities at Insurance Auto Auctions, kicked off our new dealer consignment initiative and significantly strengthened [Automotive Finance Corp.’s] operations,” he said.

KAR expected to raise $340.9 million through its December IPO by selling 23 million shares at $15 to $17 each. The company instead sold 25 million common shares at $12 each for total proceeds of $300 million.

Fourth-quarter revenue grew 5 percent from the same quarter in 2008, to $417.9 million.

For the entire year, profit rose to $23.2 million, or 21 cents per share, compared with a loss of $216 .2 million, or $2.02 per share, for 2008.

Revenue in 2009 dipped 2 percent, to $1.7 billion.

Adesa operates 62 used-vehicle auction sites across North America. KAR also is the holding company for Insurance Auto Auctions, a salvage auto auction company, and Automotive Finance Corp., a provider of financing to independent and franchised used-vehicle dealers.

Insurance Auto Auctions has 153 locations, and Automotive Finance has 88.
 

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