KAR Auction Services, Inc. (KAR) has reported a 4.02 percent rise in profit for the quarter ended Sep. 30, 2016. The company has earned $54.40 million, or $0.39 a share in the quarter, compared with $52.30 million, or $0.37 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $70 million, or $0.50 a share compared with $66.60 million or $0.47 a share, a year ago. Revenue during the quarter grew 16.06 percent to $773.80 million from $666.70 million in the previous year period. Gross margin for the quarter contracted 63 basis points over the previous year period to 42.66 percent. Total expenses were 84.07 percent of quarterly revenues, down from 84.10 percent for the same period last year. This has led to an improvement of 4 basis points in operating margin to 15.93 percent.
Operating income for the quarter was $123.30 million, compared with $106 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $184.80 million compared with $163.10 million in the prior year period. At the same time, adjusted EBITDA margin contracted 58 basis points in the quarter to 23.88 percent from 24.46 percent in the last year period.
For fiscal year 2016, KAR Auction Services, Inc. Services forecasts net income to be in the range of $216.90 million to $237.50 million and adjusted net income to be in the range of $281.90 million to $302.50 million. The company projects diluted earnings per share to be in the range of $1.56 to $1.71. It company projects diluted earnings per share to be in the range of $2.03 to $2.18 on adjusted basis.
Operating cash flow declines
KAR Auction Services, Inc. has generated cash of $283.80 million from operating activities during the nine month period, down 10.02 percent or $31.60 million, when compared with the last year period. The company has spent $630.90 million cash to meet investing activities during the nine month period as against cash outgo of $382.50 million in the last year period.
Cash flow from financing activities was $512.50 million for the nine month period, up 856.16 percent or $458.90 million, when compared with the last year period.
Cash and cash equivalents stood at $323.10 million as on Sep. 30, 2016, up 157.86 percent or $197.80 million from $125.30 million on Sep. 30, 2015.
Working capital increases sharply
KAR Auction Services, Inc. has recorded an increase in the working capital over the last year. It stood at $650.40 million as at Sep. 30, 2016, up 174.78 percent or $413.70 million from $236.70 million on Sep. 30, 2015. Current ratio was at 1.28 as on Sep. 30, 2016, up from 1.11 on Sep. 30, 2015.
Days sales outstanding went down to 265 days for the quarter compared with 282 days for the same period last year.
Debt increases substantially
KAR Auction Services, Inc. has witnessed an increase in total debt over the last one year. It stood at $2,396.50 million as on Sep. 30, 2016, up 28.29 percent or $528.40 million from $1,868.10 million on Sep. 30, 2015. Total debt was 36.39 percent of total assets as on Sep. 30, 2016, compared with 32.62 percent on Sep. 30, 2015. Debt to equity ratio was at 1.62 as on Sep. 30, 2016, up from 1.36 as on Sep. 30, 2015. Interest coverage ratio deteriorated to 3.40 for the quarter from 4.34 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: editor@irisindia.net
