KAR Auction Services, Inc. (KAR) has reported 14 percent rise in profit for the quarter ended Mar. 31, 2017. The company has earned $69.20 million, or $0.50 a share in the quarter, compared with $60.70 million, or $0.44 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $86.10 million, or $0.62 a share compared with $76.90 million or $0.55 a share, a year ago. Revenue during the quarter grew 14.28 percent to $866.60 million from $758.30 million in the previous year period. Gross margin for the quarter contracted 87 basis points over the previous year period to 42.16 percent. Total expenses were 83.44 percent of quarterly revenues, up from 83.01 percent for the same period last year. That has resulted in a contraction of 43 basis points in operating margin to 16.56 percent.
Operating income for the quarter was $143.50 million, compared with $128.80 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $210.60 million compared with $189.50 million in the prior year period. At the same time, adjusted EBITDA margin contracted 69 basis points in the quarter to 24.30 percent from 24.99 percent in the last year period.
"Our first quarter 2017 results reflect a solid start to the year with contributions from across our diversified platform of businesses," said Jim Hallett, chairman and chief executive officer of KAR. “We are well positioned for continued growth, and our development and acquisition of new capabilities like DRIVIN will enhance the products, services and value we deliver to our customers."
For financial year 2017, KAR Auction Services, Inc. projects net income to be in the range of $235.70 million to $249.70 million. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $1.70 to $1.80. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $2.15 to $2.25 on adjusted basis.
Operating cash flow improves significantlyKAR Auction Services, Inc. has generated cash of $142 million from operating activities during the quarter, up 102.57 percent or $71.90 million, when compared with the last year period. The company has spent $21.20 million cash to meet investing activities during the quarter as against cash outgo of $100.30 million in the last year period.
The company has spent $136.40 million cash to carry out financing activities during the quarter as against cash inflow of $546 million in the last year period.
Cash and cash equivalents stood at $188 million as on Mar. 31, 2017, down 72.20 percent or $488.30 million from $676.30 million on Mar. 31, 2016.
Working capital drops significantly
KAR Auction Services, Inc. has witnessed a decline in the working capital over the last year. It stood at $554 million as at Mar. 31, 2017, down 41.68 percent or $396 million from $950 million on Mar. 31, 2016. Current ratio was at 1.24 as on Mar. 31, 2017, down from 1.43 on Mar. 31, 2016.
Days sales outstanding went down to 242 days for the quarter compared with 270 days for the same period last year.
Debt remains almost stable
Total debt of KAR Auction Services, Inc. remained almost stable for the quarter at $2,398.50 million, when compared with the last year period. Total debt was 36.45 percent of total assets as on Mar. 31, 2017, compared with 37.14 percent on Mar. 31, 2016. Debt to equity ratio was at 1.68 as on Mar. 31, 2017, down from 1.69 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 3.56 for the quarter from 4.49 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: [email protected]
