KAR Expects $30 Million 1Q Net-Income Spike
In order to facilitate its previously announced debt refinancing, KAR Auction Services reported preliminary financial results for the first quarter, including a net income jump of more than $30 million.
Executives indicated Wednesday they expect to post $482.7 million in first-quarter revenue, up from the figure in the year-ago quarter of $458.4 million. That rise marks a 5-percent increase.
KAR also stated its first-quarter adjusted EBITDA is expected to be $127.3 million, representing a 6-percent uptick from the first quarter of last year, when it was $120.1 million.
As a result of these expectations, the company thinks its first-quarter net income should settle at $39.8 million, signaling quite a rise from the opening quarter of 2010 when KAR’s net income was $8.1 million.
The company’s consolidated net leverage ratio as of March 31 was expected to be 3.5x based on adjusted EBITDA of $482.4 million for the last 12 months. KAR management estimated the available cash total was $186.2 million at that date.
Amended Securitization
In other company news out Wednesday, KAR also announced an amendment to a U.S. securitization facility connected with Automotive Finance Corp. and AFC Funding Corp.
Executives said AFC and AFC Funding have entered into the fourth amended and restated receivables purchase agreement dated April 26 by and among AFC, AFC Funding, BMO Capital Markets Corp., Deutsche Bank AG and Barclays Bank plc. They indicated the receivables purchase agreement increases AFC Funding’s U.S. committed liquidity to $650 million and extends the facility’s maturity date to June 30, 2014.
“This amended U.S. securitization facility underscores our commitment to our dealer customers and strengthens AFC’s position as a premier floor plan funding source throughout the United States,” explained Don Gottwald, president and chief executive officer of AFC.
“I am grateful to our banking partners for their continued confidence in AFC as demonstrated by this larger securitization facility, secured through June 2014, and for their assistance in expanding the definition of eligible receivables,” Gottwald added.