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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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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

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